Item 1.01. Entry into a Material Definitive Agreement.
On September 21, 2021, Inotiv, Inc. (the "Company" or "Inotiv") entered into a
definitive agreement and plan of merger (the "Merger Agreement") pursuant to
which it agreed, subject to certain closing conditions, to acquire Envigo RMS
Holding Corp. ("Envigo") by merger of Envigo with a newly formed, wholly owned
subsidiary of ours (the "Envigo Acquisition").
Under the terms and conditions of the Merger Agreement, the aggregate
consideration to be paid to the holders of outstanding equity interests in
Envigo in the merger will consist of cash consideration of $200 million, and
9,365,173 Inotiv common shares, which shares had an aggregate market value of
approximately $285.0 million based on the volume weighted average sales price of
such shares as traded on the NASDAQ Capital Market calculated for the 20-trading
day period ending on September 20, 2021. The mix of cash and stock consideration
is subject to adjustment as provided in the Merger Agreement. It is anticipated
that, upon completion of the Envigo Acquisition, our current shareholders will
own approximately 64% of our outstanding common shares and the former
stockholders of Envigo will own, in the aggregate, approximately 36% of our
outstanding common shares.
Consummation of the Envigo Acquisition is subject to certain conditions set
forth in the Merger Agreement, including the approval of the Merger Agreement
and the merger by the Envigo stockholders, certain approvals by our
shareholders, as described below, performance by the parties of their material
covenants under the Merger Agreement, accuracy of representations and warranties
set forth in the Merger Agreement, the absence of a material adverse effect (as
defined in the Merger Agreement) with respect to either party, the expiration of
applicable waiting periods under applicable antitrust laws, and other customary
closing conditions. Because the number of common shares to be issued in the
Envigo Acquisition would exceed 20% of our outstanding common shares, NASDAQ
Listing Standard 5635(a) requires that we obtain shareholder approval prior to
issuing the shares in the merger. In addition, the number of shares to be issued
in the Envigo Acquisition would exceed the number of authorized shares we have
available for issuance under our articles of incorporation. The Merger Agreement
requires us to call a special meeting of our shareholders and to submit to our
shareholders at the special meeting proposals to (i) amend our articles of
incorporation to increase the number of our authorized shares to an amount that
would be sufficient to allow the consummation of the merger and (ii) approve the
issuance of the common shares to be issued pursuant to the Merger Agreement. The
consummation of the merger is conditioned on the approval of both of these
proposals by our shareholders.
The Merger Agreement provides that, at the effective time of the merger, our
board of directors will be expanded from five to seven members and will consist
of our Chief Executive Officer, our Chief Strategy Officer, two of our existing
independent directors, one director designated by each of Jermyn Street
Associates LLC and Savanna Holdings LLC (collectively, the "Nominating Holders")
and one director nominated by us and approved by the Nominating Holders. After
consummation of the merger, if it is consummated, pursuant to the terms of a
shareholders agreement among us, the Nominating Holders and certain other Envigo
shareholders, each Nominating Holder will have the right to designate a one
member of our board and to approve the director who succeeds the mutually
approved director (who may be the same mutually approved director) for as long
as they continue to hold 5% or more of our outstanding common shares. The
parties to the shareholders agreement will also agree to certain voting
provisions and restrictions on transfer of the shares they receive in the merger
and receive certain registration rights with respect thereto.
The Merger Agreement may be terminated prior to the consummation of the Envigo
Acquisition by mutual agreement of the parties, by either party if the other
party breaches its obligations under the Merger Agreement, or by either party if
the transaction has not been consummated on or prior to the end date set forth
in the Merger Agreement (which date is subject to extension as described
therein), or any governmental authority has issued an order making the
transaction illegal or otherwise prohibiting its consummation.
This description of the Merger Agreement is qualified in its entirety by
reference to the terms of the Merger Agreement, the form of which is attached as
Exhibit 2.1 to this current report on Form 8-K.
We have received commitments from a group of lenders and from Jefferies LLC to
provide $275.0 million of secured and unsecured financing to pay the cash
portion of the merger consideration and related transaction expenses and to
provide us with additional liquidity following the completion of the Envigo
Acquisition. The commitments are subject to certain conditions set forth
therein, including the accuracy of certain representations and warranties made
by Envigo in the Merger Agreement and to be made by us in the documents
governing the financing, the execution of definitive agreements, consummation of
the Envigo Acquisition, delivery of customary closing documents and the absence
of any material adverse effect (as defined in the Merger Agreement).
Item 7.01 Regulation FD Disclosure.
On September 21, 2021, the Company issued a press release announcing the
execution of the Envigo Merger Agreement and an investor presentation relating
to its acquisition of Envigo, which is posted on the Company's website at
www.inotivco.com. Copies of the press release and investor presentation are
attached to this Current Report on Form 8-K as Exhibits 99.1 and 99.2,
respectively, and are incorporated herein by reference. The information set
forth in this Item 7.01 and Exhibits 99.1 and 99.2 shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or incorporated by reference in any filing under the
Securities Act or the Exchange Act, except as shall be expressly set forth by
specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being filed as part of this report:
Exhibit No. Description
2.1 Agreement and Plan of Merger dated September 21, 2021 among Inotiv,
Inc., an Indiana corporation, certain merger subsidiaries, Envigo RMS
Holding Corp. and Shareholder Representative Services LLC
99.1 Press release dated September 21, 2021
99.2 Investor Presentation dated September 21, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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