Item 1.01. Entry into a Material Definitive Agreement
Put Option Deed and Purchase Agreement
On
Pursuant to the Put Option Deed, the Company has granted a put option (the "Put Option") to the Seller in respect of Smiths 2020 and the Seller is required to inform and consult the social and economic committee (the "Social Committee") of Smiths Medical France SAS to obtain an opinion from the Social Committee in respect of the Transaction. Upon exercise of the Put Option by the Seller, the Purchase Agreement will become effective. The Seller is not obliged to exercise the Put Option, and accordingly there are no assurances that the Seller will exercise the Put Option.
Under the Purchase Agreement, the consideration payable by the Company comprises
(a) consideration of
Closing under the Purchase Agreement is conditional upon the approval of the
shareholders of Smiths Group, certain antitrust conditions and foreign direct
investment conditions, and the termination in accordance with its terms of the
sale and purchase agreement with
Under the Purchase Agreement, the Seller has given certain customary warranties, indemnities and undertakings to the Company and has given an undertaking not to compete in the medical devices business for a period of three years following closing.
The representations and warranties in the Purchase Agreement reflect negotiations between the parties and are not intended as statements of fact to be relied upon by the Company's shareholders; in certain cases, these representations and warranties merely represent allocation decisions among the parties, have been modified or qualified by certain confidential disclosures that were made between the parties in connection with the negotiation of the Purchase Agreement (which disclosures may not be reflected in the Purchase Agreement itself, may no longer be true as of a given date, and may apply standards of materiality in a way that is different from what may be viewed as material by shareholders). As such, the representations and warranties are solely for the benefit of the parties to the Purchase Agreement and may be limited or modified by a variety of factors, including but not limited to: subsequent events, information included in public filings, disclosures made during negotiations, correspondence between the parties and disclosure schedules to the Purchase Agreement.
Commitment Letter
In connection with entering into the Purchase Agreement and the transactions
contemplated thereby, the Company entered into a debt commitment letter (the
"Debt Commitment Letter") dated
Shareholders Agreement
In connection with entering into the Purchase Agreement and the transactions contemplated thereby, including the Company's issuance of the Stock Consideration to the Seller, the Company and the Seller will at closing enter into a Shareholders Agreement (the "Shareholders Agreement"). The Shareholders Agreement will impose certain restrictions on the Seller, including prohibiting certain transfers of the shares of Company Stock issued to the Seller (i) for 6 months following the closing of the transactions contemplated by the Purchase Agreement and (ii) to certain competitors of the Company and certain other parties, as well as customary standstill limitations.
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Under the Shareholders Agreement, the Seller will have the right to designate one individual for election to the Company's board of directors so long as the Seller beneficially owns at least 5% of the total outstanding shares of Company Stock. Under the Shareholders Agreement, so long as the Seller beneficially owns at least 5% of the total outstanding shares of Company Stock, the Seller will agree to vote its shares of Company Stock, subject to certain exceptions relating to significant corporate transactions, in accordance with the recommendation by the Company's board of directors and in favor of persons nominated and recommended to serve as directors by the Company's board of directors. The Seller will be entitled to demand and piggy-back registration rights.
Item 7.01. Regulation FD Disclosure.
An investor presentation with respect to the pending transaction is attached to this Current Report as Exhibit 99.1 hereto. The investor presentation is also available on the "Investor Relations - Presentations" page of the Company's website (https://www.icumed.com). No information contained on or accessible through the Company's website shall be deemed to be part of or incorporated by reference into this Report other than Exhibit 99.1 attached to this Report.
As provided in General Instructions B.2 to Form 8-K, the information furnished in this Item 7.01 and in Exhibit 99.1 of this Current Report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 8.01. Other Events
On
Cautionary Statements Regarding Forward-Looking Information.
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements contain words such as "will," "may," "could," "should," "would," "project," "believe," "anticipate," "expect," "plan," "estimate," "forecast," "potential," "intend," "continue," "target," "build," "expand" or the negative thereof or comparable terminology, and may include (without limitation) information regarding the Company's expectations, goals or intentions regarding the future. These forward-looking statements are based on management's current expectations, estimates, forecasts and projections about the Company and assumptions management believes are reasonable, all of which are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. These risks and uncertainties include, but are not limited to, the transaction, the expected timetable for completing the transaction, the benefits and synergies of the combined business or the transaction, future opportunities for the Company and products and any other statements regarding the Company and the combined business's future operations, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, competition, and other expectations and targets for future periods.
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These forward-looking statements are based on management's current expectations, estimates, forecasts and projections about the Company and assumptions management believes are reasonable, all of which are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. These risks and uncertainties include, but are not limited to, decreased demand for the Company's products; decreased free cash flow; the inability to recapture conversion delays or part/resource shortages on anticipated timing, or at all; changes in product mix; increased competition from competitors; lack of continued growth or improving efficiencies; unexpected changes in the Company's arrangements with its largest customers; the impact of the ongoing COVID-19 pandemic on the Company and its financial results; the parties' ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction; changes in relevant tax and other laws; the parties' ability to consummate the transaction; the conditions to the completion of the transaction; the regulatory approvals required for the transaction not being obtained on the terms expected or on the anticipated schedule; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements, and the providing of estimates of financial measures, in accordance with GAAP and related standards or on an adjusted basis; the integration of the acquired business by the Company being more difficult, time-consuming or costly than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) being greater than expected following the transaction; the retention of certain key employees of the business being difficult; the Company's and the acquired business's expected or targeted future financial and operating performance and results; the scope, timing and outcome of any ongoing legal proceedings and the impact of any such proceedings on the Company's and the acquired business's consolidated financial condition, results of operations or cash flows; the Company's and the business's ability to protect their intellectual property and preserve their intellectual property rights; the effect of any changes in customer and supplier relationships and customer purchasing patterns; the ability to attract and retain key personnel; changes in third-party relationships; the impacts of competition; changes in economic and financial conditions of the Company's business or the acquired business; uncertainties and matters beyond the control of management; and the possibility that the Company may be unable to achieve expected synergies and operating efficiencies in connection with the transaction within the expected time-frames or at all and to successfully integrate the acquired business.
Future results are subject to risks and uncertainties, including the risk
factors, and other risks and uncertainties, described in the Company's filings
with the
Item 9.01. Financial Statements and Exhibits
(d) Exhibits. Exhibit No. Description 2.1 Share Sale and Purchase Agreement, datedSeptember 8, 2021 , by and betweenSmiths Group International Holdings Limited , a private limited company incorporated inEngland &Wales , andICU Medical, Inc. , aDelaware corporation. 2.2 Put Option Deed fromICU Medical, Inc. , aDelaware corporation toSmiths Group International Holdings Limited , a private limited company incorporated inEngland &Wales . 10.1 Debt Commitment Letter, dated as ofSeptember 7, 2021 , by and amongWells Fargo Bank, National Association ,Wells Fargo Securities, LLC , Barclays Bank PLC andICU Medical, Inc. aDelaware corporation. 99.1 Investor Presentation, dated as ofSeptember 8, 2021 . 99.2 Press release, dated as ofSeptember 8, 2021 . 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
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