HANGER, INC. Item 1.01 Entry into a Material Definitive Agreement.
On
The Merger Agreement provides, among other things and subject to the terms and conditions set forth therein, that Merger Sub will be merged with and into the Company, with the Company surviving as a wholly-owned subsidiary of Parent (the "Merger"). At the Effective Time (as defined in the Merger Agreement), by virtue of the Merger, and without any action on the part of Parent, Merger Sub, the Company or any holder of any securities of the Company:
· each share of common stock, par value
and outstanding immediately prior to the Effective Time (each a "Share" and collectively, the "Shares"), other than Shares to be cancelled or converted pursuant to Section 2.1(b) of the Merger Agreement and the Dissenting Shares (as defined in the Merger Agreement), shall be converted automatically into the right to receive$18.75 per Share in cash, without interest, subject to any withholding of taxes required by applicable law (the "Merger Consideration");
· each option to purchase Shares (each, a "Company Option"), whether vested or
unvested, that is outstanding immediately prior to the Effective Time shall, automatically be cancelled and be converted into the right to receive (without interest) an amount in cash (less applicable tax withholdings) equal to the product of (x) the total number of Shares underlying the Company Option multiplied by (y) the excess, if any, of the Merger Consideration over the exercise price of such Company Option; provided that any such Company Option with respect to which the exercise price subject thereto is equal to or greater than the Merger Consideration shall be cancelled for no consideration;
· each outstanding award of Company restricted stock units, deferred restricted
stock units or performance-based restricted stock units, in each case that at such time is subject solely to service-based vesting conditions (collectively, "Company RSUs") shall become fully vested and shall automatically be cancelled and be converted into the right to receive (without interest) an amount in cash (less applicable tax withholdings) equal to (x) the total number of Shares underlying such award of Company RSUs, multiplied by (y) the Merger Consideration; and
· each outstanding award of Company performance-based restricted stock units that
at such time is subject to performance-based vesting conditions ("Company
PRSUs") and is outstanding immediately prior to the Effective Time will become
vested as to the number of Shares subject to such award that would vest based
on target level achievement of all performance targets (without application of
any modifier), and shall, after giving effect to such vesting, automatically
and without any required action on the part of the holder thereof or the
Company, be cancelled and converted into the right to receive (without
interest) an amount in cash (less applicable tax withholdings) equal to (x) the
number of vested Shares underlying such award, multiplied by (y) the Merger
Consideration and the unvested portion of such Company PRSUs will be cancelled
for no consideration.
The board of directors of the Company (the "Company Board") has, upon the terms and subject to the conditions set forth in the Merger Agreement, unanimously (i) determined that the Merger Agreement and the Transactions (as defined in the Merger Agreement), including the Merger, are advisable, fair to and in the best interests of the Company and its stockholders, (ii) approved the Merger Agreement and the Transactions, including the Merger, (iii) directed that the Merger Agreement, including the Merger, be submitted to the stockholders of the Company for its adoption and approval, and (iv) resolved to recommend that the Company's stockholders vote to adopt and approve the Merger Agreement, including the Merger.
Assuming the satisfaction of the conditions set forth in the Merger Agreement
and briefly discussed below, the Company expects the Merger to close in the
fourth quarter of 2022. The Company will promptly after the execution of the
Merger Agreement and in any event, no later than 20 business days after the
Merger Agreement, prepare and file a proxy statement with the
The closing of the Merger is subject to various closing conditions, including (i) adoption and approval of the Merger Agreement, including the Merger, by holders of a majority of the Shares then outstanding (the "Company Stockholder Approval"), (ii) the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or any other similar approvals, (iii) the consummation of the Merger shall not be restrained, enjoined or prohibited by any law or order that is continuing and remains in effect, and (iv) subject to Company Material Adverse Effect (as defined in the Merger Agreement) and other customary materiality qualifications, the accuracy of the representations and warranties contained in the Merger Agreement and compliance with the covenants and agreements contained in the Merger Agreement. The closing of the Merger is not subject to a financing condition.
Parent has obtained equity and debt financing commitments, the aggregate
proceeds of which will be sufficient for Parent to consummate the Transactions
in accordance with the Merger Agreement.
Funds managed by
The Merger Agreement contains customary representations, warranties and covenants, including, among others, covenants by the Company to conduct its business and operations in all material respects in the ordinary course between the date of the Merger Agreement and the closing of the Merger, not to engage in certain material transactions during such period, to convene and hold a special meeting of its stockholders for the purpose of obtaining the Company Stockholder Approval, to use reasonable best efforts to cooperate with Parent in connection with the debt financing for the Transactions, to use reasonable best efforts to obtain regulatory approvals and, subject to certain customary exceptions, for the Board to recommend that the stockholders adopt the Merger Agreement, including the Merger. The Merger Agreement also contains customary representations, warranties and covenants of Parent and Merger Sub, including a covenant that Parent use its reasonable best efforts to consummate the equity and debt financings and to obtain regulatory approvals.
2
The Merger Agreement provides that, during the period commencing with the execution and delivery of the Merger Agreement, the Company may not solicit, initiate, propose, or induce the making, submission or announcement of, or knowingly encourage, facilitate or assist any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal (as defined in the Merger Agreement), provide non-public information to any third parties or participate or engage in discussions or negotiations with any third party with respect to an Acquisition Proposal. However, if at any time following the date of the Merger Agreement and prior to the receipt of Company Stockholder Approval the Company receives a bona fide written Acquisition Proposal from a third party and the Company has not breached the non-solicitation provision of the Merger Agreement with respect to such Acquisition Proposal and the Company Board determines in good faith that such Acquisition Proposal constitutes or could reasonably be expected to lead to a Superior Proposal (as defined below), then the Company may provide any non-public information relating to the Company or any of its subsidiaries, or afford to such third party access to the business, properties, assets, books, records or other non-public information, or to any personnel, of the Company or any of its subsidiaries (subject to entry into an acceptable confidentiality agreement with such third party and other customary notice and information obligations to Parent).
Prior to obtaining the Company Stockholder Approval, the Company Board may
effect a "Change of Board Recommendation" (as defined below) and/or terminate
the Merger Agreement if the Company has received a bona fide Acquisition
Proposal that the Company Board determines in good faith, after consultation
with and advice from its financial advisor and outside counsel constitutes a
more favorable transaction from a financial point of view for the Company's
stockholders than the Merger (a "Superior Proposal"). The Company shall not be
entitled to effect a Change of Board Recommendation or terminate the Merger
Agreement unless (i) the Company provided at least five days' prior written
notice to Parent of the Company's intention to take such action (ii) the
Company, if requested by Parent, will have negotiated in good faith with Parent
regarding any amendment to the Merger Agreement proposed in writing by Parent
and intended to cause the relevant Acquisition Proposal to no longer be a
Superior Proposal, and (iii) the Company Board shall have considered in good
faith any adjustments and/or amendments to the Merger Agreement that Parent
shall have proposed by
3
The Merger Agreement contains certain termination rights for both the Company
and Parent. The Merger Agreement may be terminated by (i) mutual written consent
of both parties prior to the Effective Time, (ii) by either Company or Parent if
the Company Stockholder Approval is not obtained upon a vote taken at the
Company special meeting of stockholders, (iii) by either Company or Parent at
any time prior to the Effective Time if any court or other governmental entity
issues an order permanently enjoining the consummation of the Transactions or
any law is enacted, entered or enforced that is continuing and remains in effect
that prohibits, makes illegal or enjoins the consummation of the Transactions,
(iv) by either Company or Parent if the Effective Time does not occur on or
before
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