SYNCHRONOSS TECHNOLOGIES,INC. (NASDAQ:SNCR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive
Agreement.
As further described under Item 2.01 below, on January19, 2017
(the Closing Date), Synchronoss Technologies,Inc., a Delaware
corporation (Parent), completed the previously announced
acquisition of Intralinks Holdings,Inc., a Delaware corporation
(Intralinks or the Company), to the Agreement and Plan of Merger
(Merger Agreement), dated December5, 2016, by and among Parent,
GL Merger Sub,Inc., a Delaware corporation and a wholly owned
subsidiary of Parent (Merger Sub), and Intralinks.
In connection with the completion of the acquisition of
Intralinks, Parent entered into a new senior secured credit
agreement, dated as of January19, 2017 (the Credit Agreement),
among, inter alia, Parent, the lending institutions from time to
time parties thereto, and Goldman Sachs Bank USA, as
administrative agent, collateral agent, swingline lender and a
letter of credit issuer. The Parents obligations under the Credit
Agreement are guaranteed by certain of Parents subsidiaries
(including Intralinks) and secured by substantially all of the
assets of Parent and the guarantors.
The term loan lenders under the Credit Agreement have advanced to
Parent senior secured term loans in an aggregate principal amount
of $900 million with a maturity date of January19, 2024 (the Term
Facility). The revolving lenders under the Credit Agreement have
provided Parent with a revolving credit facility of up to $200
million with a maturity date of January19, 2022 (the Revolving
Facility). The term loans under the Term Facility will amortize
at 1% per annum in equal quarterly installments with the balance
payable on the final maturity date. The proceeds of the Term
Facility are being used to finance a portion of the cash
consideration in the Offer and the Merger (as such terms are
defined below), to refinance certain existing indebtedness of
Parent and Intralinks (or its subsidiaries) and to pay fees and
expenses related thereto. The Revolving Facility includes
borrowing capacity available for letters of credit and for
borrowings on same-day notice under swingline loans, and
borrowing thereunder may be used for working capital and other
general corporate purposes.
Loans under the Term Facility bear interest at a rate equal to,
at Parents option, the adjusted LIBOR rate for an applicable
interest period or an alternate base rate, in each case, plus an
applicable margin of 2.75% or 1.75%, respectively. The revolving
loans under the Revolving Facility initially bear interest at a
rate equal to, at Parents option, the adjusted LIBOR rate or an
alternate base rate, in each case, plus an applicable margin of
2.50% or 1.50%, respectively, subject to step-downs based on
Parents ratio of first lien secured debt to adjusted EBITDA.
Subject to certain customary exceptions, loans under the Term
Facility are subject to mandatory prepayments in amounts equal
to: (1)50% of the net cash proceeds from any non-ordinary course
sale or other disposition of assets (including as a result of
casualty or condemnation) by Parent or its restricted
subsidiaries subject to customary reinvestment provisions and
certain other exceptions; (2)50% of the net cash proceeds from
incurrences of debt (other than permitted debt); and (3)a
customary annual excess cash flow sweep at levels based on
Parents then applicable ratio of first lien secured debt to
adjusted EBITDA.
The Credit Agreement contains a number of customary affirmative
and negative covenants and events of default, which, among other
things, restrict the ability of Parent and its subsidiaries to
incur debt, allow liens on assets, make investments, pay
dividends or prepay certain other debt. The Credit Agreement also
requires Parent to comply with certain financial maintenance
covenants, including a total gross leverage ratio and an interest
charge coverage ratio.
Certain of the lenders under the Credit Agreement, or their
affiliates, have provided, and may in the future from time to
time provide, certain commercial and investment banking,
financial advisory and other services in the ordinary course of
business for the registrant and its affiliates, for which they
have in the past and may in the future receive customary fees and
commissions.
The foregoing description of the Credit Agreement is not complete
and is qualified in its entirety by reference to the Credit
Agreement, which will be filed with the Securities and Exchange
Commission as an exhibit to Parents Quarterly Report on Form10-Q
for the quarterly period ending March31, 2017 and is incorporated
by reference herein.
Item 1.02. Termination of a Material
Definitive Agreement.
In connection with the consummation of the Merger, Parent repaid
all outstanding obligations under its previously existing Amended
and Restated Credit Agreement with Wells Fargo Bank, National
Association, as administrative agent (the Administrative Agent)
and the several lenders party thereto (the Prior Credit
Agreement). In connection therewith, Parent delivered all notices
and took all other actions to facilitate and cause the
termination of the Prior Credit Agreement, the repayment in full
of all obligations then outstanding thereunder and the release of
any security interests in connection therewith, effective as of
January19, 2017. The aggregate payoff amount was $29,027,805.53
and included all accrued
interest and prepayment penalties associated therewith.
Item 2.01. Completion of Acquisition
or Disposition of Assets.
As previously disclosed, on December5, 2016, Parent, Merger Sub
and Intralinks entered into the Merger Agreement. to the terms
of the Merger Agreement, on December19, 2016, Merger Sub
commenced a tender offer (the Offer) to purchase all of the
outstanding shares (the Shares) of Intralinks common stock,
0.001 par value, at a price of $13.00 per share, without
interest and subject to any required withholding taxes.
The Offer expired as scheduled at one minute following 11:59
p.m., New York City time, on January18, 2017 (the Expiration
Date) and was not extended. American Stock Transfer and Trust
Company, LLC, the depositary for the Offer (the Depositary),
advised Parent and Merger Sub that, as of the Expiration Date,
a total of 45,632,659 Shares (excluding Shares with respect to
which Notices of Guaranteed Delivery were delivered but which
shares were not yet delivered) had been validly tendered and
not properly withdrawn from the Offer, which tendered Shares
represented approximately 78.7% of the Shares issued and
outstanding as of the expiration of the Offer. In addition,
Notices of Guaranteed Delivery had been delivered for 1,821,243
Shares, representing approximately 3.1% of the Shares issued
and outstanding as of the expiration of the Offer. The number
of Shares (excluding Shares delivered to Notices of Guaranteed
Delivery) tendered satisfied the Minimum Tender Condition (as
defined in the Merger Agreement). All conditions to the Offer
having been satisfied (or waived), Merger Sub accepted for
payment all such Shares validly tendered and not properly
withdrawn prior to the Expiration Date, and payment for such
Shares is being made to the Depositary, which will act as the
paying agent for tendering Company stockholders for the purpose
of receiving payments for tendered Shares and transmitting such
payments to tendering Company stockholders whose Shares have
been accepted for payment, in accordance with the terms of the
Offer.
Following consummation of the Offer, the remaining conditions
to the merger of Merger Sub with and into the Company (the
Merger) set forth in the Merger Agreement were satisfied, and
on January19, 2017, Parent completed its acquisition of the
Company by consummating the Merger, without a meeting of
stockholders of the Company in accordance with Section251(h)of
the General Corporation Law of the State of Delaware (Delaware
Law), with the Company continuing as the surviving corporation
(the Surviving Corporation). At the effective time of the
Merger (the Effective Time), each Share then outstanding was
converted into the right to receive cash in an amount equal to
the Offer Price, without interest and subject to any required
withholding taxes (the Per Share Merger Consideration) (other
than (i)Shares held in the treasury of Intralinks, (ii)Shares
owned of record by Parent or any of its direct or indirect
wholly owned subsidiaries, including Merger Sub and (iii)Shares
that are issued and outstanding immediately prior to the
Effective Time and in respect of which appraisal rights have
been properly demanded (and not withdrawn or lost) in
accordance with Delaware Law in connection with the Merger). As
a result of the Merger, the Company became a wholly-owned
subsidiary of Parent.
Parent paid a total of approximately $904.1 million in the
Offer and Merger, including payment of existing indebtedness
for both Parent and Intralinks, fees and costs associated with
Term Facility and other transaction related expenses and funded
the payments required to complete the Offer and the Merger with
cash on hand and proceeds from the Credit Agreement.
The foregoing description of the Merger Agreement and related
transactions does not purport to be complete and is qualified
in its entirety by reference to the full text of the Merger
Agreement, a copy of which is filed as Exhibit2.1 to Parents
Current Report on Form8-K, filed with the U.S. Securities and
Exchange Commission (the SEC) on December6, 2016 and is
incorporated herein by reference. All capitalized terms used
herein and not otherwise defined have the meaning given to such
terms in the Merger Agreement.
Item 2.03. Creation of a Direct
Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
The information regarding the Credit Agreement set forth in
Item 1.01 of this Current Report is incorporated herein by
reference.
Item 5.02. Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain
Officers.
On January18, 2017 in connection with the Merger, the Board of
Directors of Parent (the Board) appointed Ronald W. Hovsepian,
age 55, as the Chief Executive Officer of Parent and appointed
Mr.Hovsepian as a ClassIII director of the Board of Parent,
effective as of the closing of the Merger.
Prior to the Merger, Mr.Hovsepian had served as President,
Chief Executive Officer and a director of Intralinks since
December2011. Prior to joining Intralinks, Mr.Hovsepian most
recently served as President and Chief Executive Officer of
Novell,Inc., or Novell, from 2006 until Novells acquisition by
the Attachmate Group in April2011. He joined Novell in 2003 as
President, North America, next served as Executive Vice
President and President, Worldwide Field Operations and served
as President and Chief Operating Officer from 2005 until his
appointment as Chief Executive Officer in 2006. Prior to his
time at Novell, Mr.Hovsepian served in a number of executive
positions with IBM over an approximately 17-year period.
Mr.Hovsepian has served as a member of the board of directors
of ANSYS,Inc., an engineering simulation software company since
2012 and, since November2014, he has also held the position of
non-executive chairman. From 1998 to 2015, Mr.Hovsepian served
as a member of the board of directors of ANN Inc., or ANN, a
womens fashion retailer. He also held the position of
non-executive chairman of ANNs board of directors from 2005 to
2015. Mr.Hovsepian holds a B.S. from Boston College.
to the terms of his appointment as Chief Executive Officer,
Mr.Hovsepian will be entitled to receive the benefits under his
existing agreement with Intralinks until he enters into a new
definitive employment agreement with Parent. The terms of such
existing arrangement are set forth in the section of Intralinks
definitive proxy statement filed with the SEC on April28, 2016
entitled Employment Agreements Employment Agreement with
Mr.Hovsepian and such terms are incorporated herein by
reference. In addition, subject to the approval of the Board or
the Boards compensation committee, Mr.Hovsepian will be granted
a to-be-determined number of restricted stock units or options
to purchase shares of Parent common stock, as will be
determined in connection with the execution of a definitive
employment agreement setting forth such terms and any related
severance or other benefits. Such final terms will be disclosed
at the time of the execution of such definitive employment
agreement. There are no related party transactions reportable
under Item 404(a)of Regulation S-K.
Mr.Hovsepian and Parent will also enter into an indemnification
agreement requiring Parent to indemnify him to the fullest
extent permitted under Delaware law with respect to his service
as an officer and director. The indemnification agreement will
be in the form entered into with Parents other directors and
executive officers. This form is attached hereto as
Exhibit99.2.
In connection with the appointment of Mr.Hovesepian to the
Board, and to the Companys bylaws, the Board has increased the
number of directors to 6.
Immediately prior to Mr.Hovsepians appoint as Chief Executive
Officer of Parent, Stephen G. Waldis resigned as Chief
Executive Officer of Parent. Mr.Waldis will continue to serve
as a director and has been appointed as active Executive
Chairman of the Board.
Item 9.01. Financial Statements and
Exhibits.
(a)Financial Statements of Business Acquired.
The financial statements required by this Item, with respect to
the acquisition described in Item 2.01 herein, will be filed as
soon as practicable, and in any event not later than 71 days
after the date on which this Current Report was required to be
filed to Item 2.01.
(b)Pro Forma Financial Information.
The pro forma financial information required by this Item, with
respect to the acquisition described in Item 2.01 herein, will
be filed as soon as practicable, and in any event not later
than 71 days after the date on which this Current Report was
required to be filed to Item 2.01.
(d) Exhibits
Exhibit Number
Description
2.1
Agreement and Plan of Merger among Synchronoss
Technologies,Inc., GL Merger Sub,Inc. and Intralinks
Holdings,Inc. dated December5, 2016, 2016 (incorporated
by reference to Exhibit2.1 to Intralinks Current Report
on Form8-K filed with the SEC on December6, 2016).
99.1
Press Release of Synchronoss Technologies,Inc. dated
January19, 2017 (incorporated by reference to
Exhibit(a)(5)(O)to the Amendment No.4 to the Schedule TO
of Synchronoss Technologies,Inc. and GL Merger Sub,Inc.,
filed with the SEC on January19, 2017).
99.2
Formof Indemnification Agreement between Synchronoss
Technologies,Inc. and each of its directors and executive
officers (incorporated by reference to Exhibit10.1 to the
Registration Statement on FormS-1 filed with the SEC on
May9, 2006).
About SYNCHRONOSS TECHNOLOGIES, INC. (NASDAQ:SNCR)
Synchronoss Technologies, Inc. (Synchronoss) offers cloud solutions and software-based activation for mobile carriers, enterprises, retailers and original equipment manufacturers (OEMs). The Company operates in providing cloud solutions and software-based activation for connected devices segment. Its software provides consumer and enterprise solutions for transactions on a range of connected devices across the world’s networks. The Company’s solutions include activation and provisioning software for devices and services, cloud-based sync, backup, storage and content engagement capabilities, broadband connectivity solutions, analytics, identity/access management and secure mobility management that enable communications service providers (CSPs), cable operators/multi-services operators (MSOs) and OEMs with embedded connectivity, multi-channel retailers, medium and large enterprises and their consumers, as well as other customers for secure and broadband networks, and connected devices. SYNCHRONOSS TECHNOLOGIES, INC. (NASDAQ:SNCR) Recent Trading Information
SYNCHRONOSS TECHNOLOGIES, INC. (NASDAQ:SNCR) closed its last trading session down -0.04 at 37.91 with 341,577 shares trading hands.
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