Parker-Hannifin Corporation (NASDAQ:PH) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
Entry into a Material Definitive Agreement.
On December1, 2016, Parker-Hannifin Corporation (Parker) entered
into an Agreement and Plan of Merger (the Merger Agreement) among
Parker, Parker Eagle Corporation, a wholly owned subsidiary of
Parker (Merger Sub), and CLARCOR Inc. (Clarcor), to which, among
other things and subject to the satisfaction or waiver of
specified conditions, Merger Sub will merge with and into Clarcor
(the Merger). As a result of the Merger, Merger Sub will cease to
exist, and Clarcor will survive as a wholly owned subsidiary of
Parker.
At the effective time of the Merger (the Effective Time), each
share of Clarcor common stock issued and outstanding immediately
prior to the Effective Time (other than dissenting shares and
shares held by Parker, Merger Sub or Clarcor or any of their
respective wholly owned subsidiaries) will be converted into the
right to receive $83.00 in cash, without interest (the Per Share
Merger Consideration).
to the Merger Agreement, subject to certain exceptions, each
option to purchase Clarcor common stock outstanding as of the
Effective Time, whether vested or unvested, will be converted
into the right to receive a cash payment equal to the product of
(1)the total number of shares of Clarcor common stock subject to
such option and (2)the amount by which the Per Share Merger
Consideration exceeds the exercise price per share, less any
applicable taxes. Subject to certain exceptions, as of the
Effective Time, all other Clarcor equity and equity-based awards,
subject to time-based or performance-based vesting conditions,
will vest and be converted into the right to receive the Per
Share Merger Consideration provided for under their terms in
effect immediately prior to the Effective Time.
The purchase price is expected to be financed with a combination
of new debt and cash on Parkers balance sheet.
The completion of the Merger is subject to customary conditions,
including, without limitation, (1)the adoption of the Merger
Agreement by Clarcors stockholders; (2)the absence of any order,
law or other legal restraint or prohibition preventing or
prohibiting completion of the Merger, (3)the expiration or
termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
(4)the receipt of other antitrust approvals, (5)subject to
certain qualifications, the accuracy of representations and
warranties of Parker, Merger Sub and Clarcor, and (6)the
performance of or compliance with the covenants and agreements
made by Parker, Merger Sub and Clarcor, respectively.
The Merger Agreement includes detailed representations,
warranties and covenants of Parker, Merger Sub and Clarcor.
Between the date of execution of the Merger Agreement and the
Effective Time, Clarcor has agreed to use reasonable best efforts
to operate its business and the business of its subsidiaries in
the ordinary course and to preserve intact its business
organizations and current relationships with persons having
material business dealings with Clarcor and its subsidiaries, and
Clarcor has agreed to comply with certain other operating
covenants.
In addition, Clarcor has agreed not to, and to cause its
subsidiaries not to, and to direct their respective
representatives not to, initiate, solicit or knowingly facilitate
or encourage any
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third-party acquisition proposals. Each of Parker, Merger Sub and
Clarcor has agreed to use reasonable best efforts to cause the
Merger to be consummated. The Merger Agreement includes
termination provisions for both Parker and Clarcor and provides
that, in connection with a termination of the Merger Agreement
under specified circumstances, Clarcor will be required to pay
Parker a termination fee of $113 million. Such specified
circumstances include, among others, termination by Parker for a
change of recommendation of the Clarcor Board of Directors,
termination by Clarcor in connection with a Superior Proposal (as
such term is defined in the Merger Agreement) and Clarcors
willful and material breach (as defined in the Merger Agreement)
of certain of its covenants relating to soliciting acquisition
proposals, mailing its proxy statement and calling and holding a
special meeting of its stockholders.
A copy of the Merger Agreement is attached as Exhibit 2.1 to this
report and is incorporated herein by reference. The foregoing
description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the
Merger Agreement.
The representations, warranties and covenants set forth in the
Merger Agreement have been made only for the purposes of that
agreement and solely for the benefit of the parties to the Merger
Agreement, may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk
between the parties to the Merger Agreement instead of
establishing these matters as facts, as well as by information
contained in each of Parkers Annual Report on Form 10-K for the
fiscal year ended June30, 2016 and Quarterly Report on Form 10-Q
for the fiscal quarter ended September30, 2016 and Clarcors
Annual Report on Form 10-K for the fiscal year ended November28,
2015 and Quarterly Reports on Form 10-Q for the fiscal quarters
ended February27, 2016,May28, 2016 and August27, 2016, as well as
other reports Clarcor and Parker file with the Securities and
Exchange Commission (the SEC), and may be subject to standards of
materiality applicable to the contracting parties that differ
from those applicable to investors. In addition, such
representations and warranties (1)will not survive consummation
of the Merger and cannot be the basis for any claims under the
Merger Agreement by the other party after termination of the
Merger Agreement and (2)were made only as of the dates specified
in the Merger Agreement. Accordingly, the Merger Agreement is
included with this filing only to provide investors with
information regarding the terms of the Merger Agreement and not
to provide investors with any other factual information regarding
the parties or their respective businesses.
Item8.01.
Other Events.
On December1, 2016, Parker and Clarcor issued a joint press
release announcing the execution of the Merger Agreement. A copy
of the press release is attached as Exhibit 99.1 and is
incorporated herein by reference.
On December1, 2016, Parker also provided supplemental information
regarding the proposed transaction in connection with a
presentation to investors. A copy of the investor presentation is
attached hereto as Exhibit 99.2 and is incorporated by reference
herein.
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Additional Information and Where to Find it
In connection with the proposed transaction, Clarcor intends to
file a preliminary proxy statement on Schedule 14A with the SEC.
CLARCORS SHAREHOLDERS ARE ENCOURAGED TO READ THE PRELIMINARY
PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER. The final proxy statement will be mailed to
shareholders of Clarcor. Investors and security holders will be
able to obtain the documents free of charge at the SECs website,
www.sec.gov, or from Clarcors website at www.clarcor.com under
the heading Investor Information or by emailing Clarcor at
investor@clarcor.com.
Participants in Solicitation
Parker, Clarcor and their respective directors and executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies in
respect of the proposed merger. Information concerning Parkers
directors and executive officers is set forth in the proxy
statement, filed September26, 2016, for Parkers 2016 annual
meeting of shareholders as filed with the SEC on Schedule 14A and
in its most recent Annual Report on Form 10-K for the fiscal year
ended June30, 2016 as filed with the SEC on August26, 2016.
Information concerning Clarcors directors and executive officers
is set forth in the proxy statement, filed February19, 2016, for
Clarcors 2016 annual meeting of shareholders as filed with the
SEC on Schedule 14A and in its most recent Annual Report on Form
10-K for the fiscal year ended November28, 2015 as filed with the
SEC on January22, 2016. Additional information regarding the
interests of such participants in the solicitation of proxies in
respect of the proposed merger will be included in the proxy
statement and other relevant materials to be filed with the SEC
when they become available.
Cautionary Statement Regarding Forward-Looking
Statements
Forward-looking statements contained in this and other written
and oral reports are made based on known events and circumstances
at the time of release, and as such, are subject in the future to
unforeseen uncertainties and risks. These statements may be
identified from use of forward-looking terminology such as
anticipates, believes, may, should, could, potential, continues,
plans, forecasts, estimates, projects, predicts, would, intends,
anticipates, expects, targets, is likely, will, or the negative
of these terms and similar expressions, and include all
statements regarding future performance, earnings projections,
events or developments. Clarcor and Parker caution readers not to
place undue reliance on these statements. The risks and
uncertainties in connection with such forward-looking statements
related to the proposed transaction include, but are not limited
to, the occurrence of any event, change or other circumstances
that could delay the closing of the proposed transaction; the
possibility of non-consummation of the proposed transaction and
termination of the merger agreement; the failure to obtain
Clarcor stockholder approval of the proposed transaction or to
satisfy any of the other conditions to the merger agreement; the
possibility that a governmental
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entity may prohibit, delay or refuse to grant a necessary
regulatory approval in connection with the proposed transaction;
the risk that stockholder litigation in connection with the
proposed transaction may affect the timing or occurrence of the
proposed transaction or result in significant costs of defense,
indemnification and liability; adverse effects on Clarcors common
stock or Parkers common stock because of the failure to complete
the proposed transaction; Clarcors or Parkers respective
businesses experiencing disruptions due to transaction-related
uncertainty or other factors making it more difficult to maintain
relationships with employees, business partners or governmental
entities; the parties being unable to successfully implement
integration strategies; and significant transaction costs related
to the proposed transaction.
It is possible that the future performance and earnings
projections of Parker and/or Clarcor, including projections of
any individual segments, may differ materially from current
expectations, depending on economic conditions within each
companys key markets, and each companys ability to maintain and
achieve anticipated benefits associated with announced
realignment activities, strategic initiatives to improve
operating margins, actions taken to combat the effects of the
current economic environment, and growth, innovation and global
diversification initiatives. A change in the economic conditions
in individual markets may have a particularly volatile effect on
segment performance. Among other factors which may affect future
performance of Parker and/or Clarcor are, as applicable: changes
in business relationships with and purchases by or from major
customers, suppliers or distributors, including delays or
cancellations in shipments; Clarcors potential inability to
realize the anticipated benefits of the strategic supply
partnership with GE; disputes regarding contract terms or
significant changes in financial condition, changes in contract
cost and revenue estimates for new development programs and
changes in product mix; ability to identify acceptable strategic
acquisition targets; uncertainties surrounding timing, successful
completion or integration of acquisitions and similar
transactions; the ability to successfully divest businesses
planned for divestiture and realize the anticipated benefits of
such divestitures; the determination to undertake business
realignment activities and the expected costs thereof and, if
undertaken, the ability to complete such activities and realize
the anticipated cost savings from such activities; ability to
implement successfully capital allocation initiatives, including
timing, price and execution of share repurchases; availability,
limitations or cost increases of raw materials, component
products and/or commodities that cannot be recovered in product
pricing; ability to manage costs related to insurance and
employee retirement and health care benefits; compliance costs
associated with environmental laws and regulations; potential
labor disruptions; threats associated with and efforts to combat
terrorism and cyber-security risks; uncertainties surrounding the
ultimate resolution of outstanding legal proceedings, including
the outcome of any appeals; competitive market conditions and
resulting effects on sales and pricing; and global economic
factors, including manufacturing activity, air travel trends,
currency exchange rates, difficulties entering new markets and
general economic conditions such as inflation, deflation,
interest rates and credit availability. Additional information
about the risks related to Parker and its business may be found
in Parkers Annual Report on Form 10-K for the fiscal year ended
June30, 2016 filed on August26, 2016. Additional information
about the risks related to Clarcor and its business may be found
in Clarcors Annual Report on Form 10-K for the fiscal year ended
November28, 2015 filed on January22, 2016. Parker and/or Clarcor
make these statements as of the date of this disclosure, and
undertake no obligation to update them unless otherwise required
by law.
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Item9.01.
Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number
Description
2.1*
Agreement and Plan of Merger, among Parker-Hannifin
Corporation, CLARCOR Inc. and Parker Eagle Corporation, dated
as of December 1, 2016.
99.1
Press Release, dated December 1, 2016, issued by
Parker-Hannifin Corporation and CLARCOR Inc.
99.2
Investor Presentation, dated December 1, 2016.
*
Certain schedules have been omitted and Parker agrees to
furnish supplementally to the Securities and Exchange
Commission a copy of any omitted exhibits and schedules upon
request.
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About Parker-Hannifin Corporation (NASDAQ:PH)
Parker-Hannifin Corporation (NASDAQ:PH) Recent Trading Information
Parker-Hannifin Corporation (NASDAQ:PH) closed its last trading session at with 1,191,684 shares trading hands.
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