Item 1.01. Entry into a Material Definitive Agreement.
On
Subject to the terms and conditions of the Purchase Agreement, Buyer has agreed
to purchase all of the outstanding equity interests of the holding company of
the Business, a subsidiary of the Company (the "Transaction"). The purchase
price for the Transaction is approximately
The Company anticipates non-cash goodwill impairment charges in the fourth quarter of 2019, as a result of the Domestic Environmental Solutions reporting unit's ("ESOL reporting unit") carrying values exceeding its estimated fair value. The ESOL reporting unit includes the Business subject to the Purchase Agreement and the Retained Business. In addition, the Transaction is anticipated to result in a pre-tax loss upon disposition. The anticipated pre-tax loss is subject to certain items, including net cash proceeds attributed to the Transaction and carrying value of the Business at closing, among others.
The Purchase Agreement contains customary representations, warranties and
covenants related to the Business and the Transaction. Between the date of the
Purchase Agreement and the completion of the Transaction, the Company has agreed
to conduct the Business in the ordinary course of business consistent with past
practices in all material respects and has agreed to certain other operating
covenants with respect to the Business as set forth more fully in the Purchase
Agreement. The Purchase Agreement includes customary termination provisions,
including if the closing of the Transaction has not occurred on or before
In connection with the closing of the Transaction, the Company and Buyer will
enter into certain additional ancillary agreements, including a transition
services agreement. Additionally, the Company and Buyer will enter into a
long-term subcontracted healthcare services agreement ("HSA") with respect to
the Company's Retained Business. Pursuant to the HSA, the Company will provide
certain sales and customer services to healthcare customers and Buyer will
handle collection, transportation and disposal of certain waste for such
customers. The Company's Retained Business, including the portion that will be
supported operationally by the Buyer under the HSA, has annual revenue of
approximately
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Purchase Agreement. A copy of the
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Purchase Agreement is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. The representations, warranties and covenants set forth in the Purchase Agreement have been made only for the purposes of the Purchase Agreement and solely for the benefit of the parties thereto and 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 Purchase Agreement instead of establishing these matters as facts. In addition, such representations and warranties were made only as of the dates specified in the Purchase Agreement and information regarding the subject matter thereof may change after the date of the Purchase Agreement. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding its terms and not to provide investors with any other factual information regarding the Company or its business as of the date of the Purchase Agreement or as of any other date. Investors and security holders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were made only as of a specific date and are modified in important part by the underlying disclosure schedules. In addition, certain representations and warranties may be subject to a contractual standard of materiality different from what might be viewed as material to stockholders.
Item 7.01. Regulation FD Disclosure.
On
The information furnished in Item 7.01 and Exhibit 99.1 are not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Forward-Looking Statements
This Current Report may contain forward-looking statements that involve risks and uncertainties, some of which are beyond our control (for example, general economic and market conditions). When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements. Actual results could differ significantly from the results described here. Factors that could cause such differences include changes in governmental regulation of the collection, transportation, treatment and disposal of regulated waste or the proper handling and protection of personal and confidential information, the level of government enforcement of regulations governing regulated waste collection and treatment or the proper handling and protection of personal and confidential information, decreases in the volume of regulated wastes or personal and confidential information collected from customers, the ability to implement our enterprise resource planning or execute on business transformation initiatives and achieve the anticipated benefits and cost savings, charges related to portfolio rationalization or the failure of portfolio rationalization to achieve the desired results, the obligations to service substantial indebtedness and comply with the covenants and restrictions contained in private placement notes and credit agreements, political, economic, inflationary, currency and other risks related to our foreign operations, the outcome of pending or future litigation including
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litigation with respect to the
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits:
Exhibit No. Description 2.1* Stock Purchase Agreement, dated as ofFebruary 6, 2020 , by and among the Company,Buyer and Harsco Corporation. 99.1 Press Release issued by the Company onFebruary 7, 2020 . 104 Cover Page Interactive Data File (embedded within the Inline XBLR document).
* Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
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