ILLUMINA, INC. Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement
On
Subject to the terms and conditions set forth in the Merger Agreement, at the
effective time of the First Merger (the "Effective Time"), each issued and
outstanding share of Class A Common Stock, par value
? The right to receive (i) an amount in cash, without interest, equal to the
amount obtained by dividing
Count (as defined in the Merger Agreement) (the "Cash Consideration"), plus
(ii) a number of validly issued, fully paid and non-assessable shares of common
stock, par value
obtained by dividing the Aggregate Stock Consideration (as defined below) by
the Grail Fully Diluted Share Count (the "Stock Consideration"), plus (iii) one
contingent value right (a "CVR") issued by the Company, subject to and in
accordance with the CVR Agreement described below (the "CVR Consideration"); or
? The right to receive (i) the Cash Consideration, plus (ii) the Stock
Consideration, plus (iii) a number of shares of Company Common Stock and/or an
amount in cash, such number and/or amount to be determined by the Company in
its sole discretion (the "Alternative Consideration").
The number of shares of Company Common Stock to be received for each share of
"Aggregate Stock Consideration" means:
? If the Average Company Stock Price is an amount greater than
Aggregate Stock Consideration shall be 11,278,195 shares of Company Common
Stock;
? If the Average Company Stock Price is an amount greater than or equal to
but less than or equal to
a number of shares of Company Common Stock equal to the quotient obtained by
dividing (x)
? If the Average Company Stock Price is an amount less than
Aggregate Stock Consideration shall be 15,254,237 shares of Company Common
Stock;
Holders of
No fractional shares of Company Common Stock will be issued as Stock
Consideration or Alternative Consideration, but in lieu thereof each holder of
Subject to the terms and conditions set forth in the Merger Agreement, immediately prior to the Effective Time, a portion, determined in accordance with the Merger Agreement, of each outstanding award of Grail restricted stock, restricted stock units and stock options will vest. Vested equity awards will be canceled for the right to receive, at the holder's election, either the CVR Consideration or the Alternative Consideration. Unvested awards will convert into equivalent awards with respect to Company Common Stock in a manner intended to preserve their value, and generally subject to the same terms and conditions as the underlying Grail award, except that the holder may elect to receive a specified number of vested CVRs in respect of such award in exchange for fewer Company awards.
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If the Mergers are not consummated on or prior to
The Board of Directors of Grail, including both Preferred Directors (as defined in Grail's certificate of incorporation), has approved the Merger Agreement and the Mergers and the other transactions contemplated by the Merger Agreement (the "Transactions") and resolved to recommend that the stockholders of Grail adopt the Merger Agreement.
The completion of the Mergers is subject to satisfaction or waiver of specified
closing conditions, including (1) the receipt of required approvals from Grail
stockholders, (2) the receipt of required regulatory approvals, including the
expiration or termination of the waiting period (and any extension thereof)
under the Hart-Scott-Rodino Act, as amended (the "HSR Act"), (3) the absence of
any law, whether temporary, preliminary or permanent, which is then in effect
and has the effect of enjoining, restraining, prohibiting or otherwise
preventing consummation of the Transactions, (4) the effectiveness of the
Registration Statement to be filed by the Company (together with all amendments
thereto, the "Registration Statement"), pursuant to which the shares of Company
Common Stock and CVRs to be issued in connection with the Mergers will be
registered with the
The Merger Agreement contains customary representations and warranties of the Company and Grail relating to their respective businesses and financial statements, in each case generally subject to customary materiality qualifiers. Additionally, the Merger Agreement provides for customary pre-closing covenants of the Company and Grail, including covenants of Grail relating to conducting its business in the ordinary course, and covenants of each party to refrain from taking certain actions without the other party's consent. The Company and Grail also agreed to use their respective reasonable best efforts to cause the Merger to be consummated and to obtain expiration or termination of the waiting period under the HSR Act and other required regulatory approvals, subject to certain exceptions. The Merger Agreement provides that Grail is subject to certain restrictions on its ability to solicit alternative acquisition proposals from and provide non-public information to third parties and to engage in negotiations with third parties regarding alternative acquisition proposals, subject to customary exceptions.
The consummation of the Mergers and the other Transactions is subject to
obtaining the consent of the holders of the majority of the total voting power
of
In connection with the Transactions, the
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The Merger Agreement contains certain termination rights for each of the Company
and Grail, including a termination right for each of the Company and Grail if
the consummation of the Merger does not occur on or before
The foregoing description of the Merger Agreement, the Selling Investor Support Agreement, the Drag-Along Consent and the Transactions does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1, the Selling Investor Support Agreement, a copy of which is attached hereto as Exhibit 10.1, and the form of Drag-Along Consent attached as Exhibit B to the Merger Agreement, each of which are incorporated herein by reference.
The Merger Agreement has been included to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company, Grail or their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Merger Agreement were made solely for purposes of the Merger Agreement and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, 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 Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company's public disclosures.
Bridge Facility Commitment Letter
On
Item 8.01. Other Events.
On
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Additional Information and Where to Find It
In connection with the proposed transaction, the Company intends to file with
the
No Offer or Solicitation
This communication is for informational purposes only and is not intended to and does not constitute an offer to subscribe for, buy or sell, or the solicitation of an offer to subscribe for, buy or sell, or an invitation to subscribe for, buy or sell any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, invitation, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Cautionary Notes on Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of
the federal securities laws, including Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. In this context, forward-looking statements often address expected
future business and financial performance and financial condition, and often
contain words such as "expect," "anticipate," "intend," "plan," "believe,"
"seek," "see," "will," "would," "may," "target," similar expressions and
variations or negatives of these words. Forward-looking statements by their
nature address matters that are, to different degrees, uncertain, such as
statements about the consummation of the proposed transaction and the
anticipated benefits thereof. These and other forward-looking statements are
not guarantees of future results and are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially from those
expressed in any forward-looking statements, including the failure to consummate
the proposed transaction or to make any filing or take other action required to
consummate such transaction in a timely matter or at all. Important risk
factors that may cause such a difference include, but are not limited to: (i)
the proposed transaction may not be completed on anticipated terms and timing,
(ii) a condition to closing of the transaction may not be satisfied, including
obtaining regulatory approvals, (iii) the potential impact of unforeseen
liabilities, future capital expenditures, revenues, costs, expenses, earnings,
synergies, economic performance, indebtedness, financial condition and losses on
the future prospects, business and management strategies for the management,
expansion and growth of the Company's business after the consummation of the
transaction, (iv) potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the transaction,
(v) any negative effects of the announcement, pendency or consummation of the
transaction on the market price of the Company's common stock and on the
Company's operating results, (vi) risks associated with third-party contracts
containing consent and/or other provisions that may be triggered by the proposed
transaction, (vii) the risks and costs associated with the integration of, and
the ability of the Company to integrate, Grail's business successfully and to
achieve anticipated synergies, (viii) the risks and costs associated with the
development and commercialization of, and the Company's ability to develop and
commercialize, Grail's products; (ix) the risk that disruptions from the
proposed transaction will harm the Company's business, including current plans
and operations, (x) legislative, regulatory and economic developments, (xi) the
other risks described in the Company's most recent annual reports on Form 10-K
and quarterly reports on Form 10-Q and in the registration statement on Form S-1
filed with the
These risks, as well as other risks associated with the proposed transaction,
will be more fully discussed in the consent solicitation statement/prospectus
that will be included in the registration statement on Form S-4 that will be
filed with the
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Item 9.01. Exhibits. Exhibit Number Description of Exhibit 2.1 Agreement and Plan of Merger dated as ofSeptember 20, 2020 , amongIllumina, Inc. ,SDG Ops, Inc. ,SDG Ops, LLC andGRAIL, Inc. * 10.1 Selling Investor Support Agreement dated as ofSeptember 20, 2020 , amongIllumina, Inc. and each of the stockholders party thereto* 10.2 Commitment Letter dated as ofSeptember 20, 2020 , betweenIllumina, Inc. andGoldman Sachs Bank USA 99.1 Joint Press Release datedSeptember 21, 2020 , issued byIllumina, Inc. andGRAIL, Inc. 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document *Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to theSEC upon request.
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