Item 1.01 Entry into a Material Definitive Agreement
The Merger Agreement
On July 16, 2021 (the "Agreement Date"), Bill.com Holdings, Inc. ("Bill.com" or
the "Company") entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Igloo Merger Sub I, Inc., a Delaware corporation and direct,
wholly owned subsidiary of Bill.com ("Merger Sub I"), Igloo Merger Sub II, LLC,
a Delaware limited liability company and direct, wholly owned subsidiary of
Bill.com ("Merger Sub II" and together with Merger Sub I, the "Merger Subs"),
Invoice2go, Inc., a Delaware corporation ("Invoice2go"), and Fortis Advisors
LLC, a Delaware limited liability company (in its capacity as the equityholder's
agent).
Upon the consummation of the transactions contemplated by the Merger Agreement
(the "Closing"), Merger Sub I will merge with and into Invoice2go, with
Invoice2go surviving as a wholly owned subsidiary of Bill.com, and immediately
thereafter, as part of the same overall integrated transaction, Invoice2go will
merge with and into Merger Sub II, pursuant to which Merger Sub II will survive
and remain a direct wholly owned subsidiary of Bill.com (such transactions,
collectively or in seriatim, the "Merger").
Pursuant to the terms and subject to the conditions set forth in the Merger
Agreement, including customary purchase price adjustments, the aggregate
consideration Bill.com will pay and issue upon the Closing in exchange for all
of the outstanding equity interests of Invoice2go is approximately $625 million,
with approximately 25% payable in cash (the "Cash Consideration"), subject to
adjustments, and the remainder issuable in shares of Bill.com's common stock
("Shares"), options to acquire Shares and restricted stock units covering Shares
(the "Share Consideration" and, together with the Cash Consideration, the
"Merger Consideration"). The Share Consideration will be calculated based the
average of the daily volume-weighted average sales price per Share for each of
the twenty consecutive trading days ending on the third trading day prior to the
Closing.
In addition, pursuant to the terms and subject to the conditions set forth in
the Merger Agreement, Bill.com will grant $30.0 million of RSUs under the 2019
Equity Incentive Plan (the "Employee RSUs") to certain employees of Invoice2go
who will continue as employees of Bill.com or its subsidiaries, including the
surviving entity in the Merger ("Continuing Employees").
At the effective time of the Merger, all outstanding shares of Invoice2go's
capital stock and warrants will be cancelled and converted into the right to
receive a pro rata portion of the Merger Consideration pursuant to the terms and
subject to the conditions set forth in the Merger Agreement. Shares of
Invoice2go capital stock held by unaccredited stockholders will convert into the
right to receive cash in lieu of the Share Consideration. All options to acquire
Invoice2go's common stock ("Invoice2go Options") outstanding as of immediately
prior to the effective time of the Merger will be treated as follows: (i) all
vested Invoice2go Options that are held by a Continuing Employee (A) with
respect to a portion of such vested options, will be cancelled and automatically
converted into the right to receive cash equal to the value of such options, and
(B) with respect to a portion of such vested options, will be assumed by Parent
and converted into an option to acquire Shares, (ii) all vested Invoice2go
Options that are held by a Non-Continuing Employee will be cancelled and
automatically converted into the right to receive cash equal to the value of
such options, (iii) all unvested options that are held by a Continuing Employee
will be assumed by Bill.com and (iv) all other unvested Invoice2go Options will
be cancelled for no consideration.
The Merger Agreement contains customary representations, warranties and
covenants by Invoice2go and Bill.com.
Bill.com and Invoice2go's obligations to consummate the Merger are subject to
customary closing conditions, including, among other things, (i) the adoption of
the Merger Agreement and approval of the Merger in accordance with Delaware law,
(ii) the expiration or termination of the applicable waiting period under the
Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (iii) the accuracy of certain representations and warranties made by the
other party in the Merger Agreement (subject to certain materiality exceptions),
(iv) the other party's material compliance with its covenants set forth in the
Merger Agreement and (v) the absence of a material adverse effect with respect
to the other party. Bill.com's obligations to consummate the Merger are also
subject to (i) the execution of the Joinder Agreements (as defined below) by
stockholders holding at least 95% of Invoice2go's outstanding shares, (ii) the
continued effectiveness of certain agreements entered into with key employees of
Invoice2go in connection with the execution of the Merger Agreement and
(iii) the retention of 90% of Invoice2go employees who are offered continued
employment with Bill.com after the Closing.
The Merger Agreement may be terminated (i) by mutual written consent of Bill.com
and Invoice2go, (ii) by Bill.com or Invoice2go, if the closing of the Merger has
not occurred on or before November 12, 2021 (which date may be extended to
January 12, 2022 by mutual agreement if all closing conditions have been
satisfied or waived, other than the expiration or termination of the applicable
waiting period under the HSR Act, as of such original date), (iii) by either
Company or Invoice2go, if the other party (a) breaches its representations,
warranties or covenants in the Merger Agreement, (b) has not cured such breach
within 30 days of written notice of such breach and (c) such breach would result
in the failure of any condition of the closing to be satisfied, or (iv) by
Bill.com, if Invoice2go's stockholders do not adopt the Merger Agreement and
approve the Merger within 24 hours after the execution of the Merger Agreement.
Invoice2go's stockholders and warrantholders (the "Indemnifying Parties") have
agreed to indemnify Bill.com for, among other things, (i) breaches of
representations, warranties and covenants, (ii) inaccuracies in the calculation
and distribution of the
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Merger Consideration, (iii) outstanding litigation, (iv) claims by Invoice2go's
equityholders, (v) liabilities for pre-Closing taxes and (vi) actual fraud by or
on behalf of Invoice2go in connection with the transactions contemplated by the
Merger Agreement and certain other specified matters. Pursuant to the terms of
the Merger Agreement, Bill.com will deposit $62.5 million of the Cash
Consideration in a third-party escrow account for a period of 18 months to
partially secure the indemnification obligations of the Indemnifying Parties
under the Merger Agreement.
The Company intends to issue the Shares in reliance upon the exemptions from
registration afforded by Section 4(a)(2) and Rule 506 of Regulation D, or in
reliance upon the exemption from registration afforded by Regulation S, in each
case promulgated under the Securities Act of 1933, as amended. Under the terms
. . .
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 3.02.
Item 8.01 Other Events.
On July 19, 2021, Bill.com and Invoice2go issued a joint press release
announcing that they had entered into the Merger Agreement. A copy of the joint
press release is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
99.1 Press release dated July 19, 2021.
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document.
Use of Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of
federal securities laws. Forward-looking statements may contain words such as
"believes", "anticipates", "estimates", "expects", "intends", "aims",
"potential", "will", "would", "could", "considered", "likely" and words and
terms of similar substance used in connection with any discussion of future
plans, actions or events identify forward-looking statements. All statements,
other than historical facts, including statements regarding the expected timing
of the closing of the proposed transaction and the expected benefits of the
proposed transaction, are forward-looking statements. These statements are based
on management's current expectations, assumptions, estimates and beliefs. While
Bill.com believes these expectations, assumptions, estimates and beliefs are
reasonable, such forward-looking statements are only predictions, and are
subject to a number of risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: (i) failure
of Invoice2go to obtain stockholder approval as required for the proposed
transaction; (ii) failure to obtain governmental and regulatory approvals
required for the closing of the proposed transaction, or delays in governmental
and regulatory approvals that may delay the transaction or result in the
imposition of conditions that could reduce the anticipated benefits from the
proposed transaction or cause the parties to abandon the proposed transaction;
successful completion of the proposed transaction; (iii) failure to satisfy the
conditions to the closing of the proposed transactions; (iv) unexpected costs,
liabilities or delays in connection with or with respect to the proposed
transaction; (v) the effect of the announcement of the proposed transaction on
the ability of Bill.com or Invoice2go to retain and hire key personnel and
maintain relationships with customers, suppliers and others with whom Bill.com
or Invoice2go does business, or on Bill.com's or Invoice2go's operating results
and business generally; (vi) the outcome of any legal proceeding related to the
proposed transaction; (vii) the challenges and costs of integrating,
restructuring and achieving anticipated synergies and benefits of the proposed
transaction and the risk that the anticipated benefits of the proposed
transaction may not be fully realized or take longer to realize than expected,
including the challenges and costs to Bill.com of integrating both Invoice2go
and its recently-acquired DivvyPay, Inc. subsidiary; (vii) competitive pressures
in the markets in which Bill.com and Invoice2go operate; (viii) the occurrence
of any event, change or other circumstances that could give rise to the
termination of the merger agreement; and (ix) other risks to the consummation of
the proposed transaction, including the risk that the proposed transaction will
not be consummated within the expected time period or at all. Additional factors
that may affect the future results of Bill.com are set forth in its filings with
the SEC, including each of Bill.com's most recently filed Annual Report on Form
10-K, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
other filings with the SEC, which are available on the SEC's website at
www.sec.gov. Readers are urged to consider these factors carefully in evaluating
these forward-looking statements, and not to place undue reliance on any
forward-looking statements. Readers should also carefully review the risk
factors described in other documents that Bill.com files from time to time with
the SEC. The forward-looking statements in these materials speak only as of the
date of these materials. Except as required by law, Bill.com assumes no
obligation to update or revise these forward-looking statements for any reason,
even if new information becomes available in the future.
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