MKS INSTRUMENTS, INC. Item 1.01 Entry into a Material Definitive Agreement.
Implementation Agreement
As previously disclosed in the Current Report on Form 8-K filed on
Pursuant to the Implementation Agreement, upon the effective date of the
Acquisition (the "Effective Date"), the Company will acquire each issued and
outstanding common share of Atotech (the "Atotech Shares") in exchange for per
share consideration of
Under the Implementation Agreement, prior to the Effective Date, all outstanding
options to purchase Atotech Shares will vest in full, be cancelled and
extinguished, and, in the case of "in the money" options, convert into the right
to receive cash consideration in an amount equal to the product obtained by
multiplying (i) the number of Atotech Shares subject to such cancelled option by
(ii) the positive difference between (x) the Per Share Consideration Cash Value
(as defined in the Implementation Agreement) and (y) the exercise price per
Atotech Share subject to such option. On the Effective Date, all outstanding
time-based restricted stock units of Atotech ("Atotech RSUs") and
performance-based restricted stock units of Atotech ("Atotech PSUs") shall be
cancelled and extinguished without payment. Former holders of Atotech RSUs will
receive restricted stock units of the Company ("Company RSUs") of equivalent
value, calculated in accordance with an Award Exchange Ratio (as defined in the
Implementation Agreement) and subject to the same vesting schedule as the
cancelled Atotech RSUs. Former holders of Atotech PSUs will receive Company RSUs
with a value that assumes target achievement (or, if greater, actual achievement
to the earlier of
The Implementation Agreement contains customary representations and warranties
from Atotech and the Company for a transaction of this type. It also contains
customary covenants for a transaction of this type, including covenants
providing for each of the parties to use all reasonable endeavors to cause the
Acquisition to be consummated, and covenants requiring Atotech, subject to
certain exceptions, (i) to act and carry on its business in the ordinary course
of business and in all material respects consistent with past practice during
the period between the execution of the Implementation Agreement and the
Effective Date and (ii) not to directly or indirectly solicit or encourage any
offer or merger proposals relating to alternate transactions or enter into any
discussions or negotiations with, or provide any information to, any person with
respect thereto, except to the extent that the fiduciary duties of Atotech's
directors are considered by them to require them to respond to an unsolicited
approach regarding a competing transaction. Completion of the Acquisition is
expected to be implemented by means of a scheme of arrangement under the laws of
Jersey and is subject to certain closing conditions, including (i) approval of
the Acquisition by Atotech's shareholders in accordance with the laws of Jersey,
(ii) approval of the Acquisition by the
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representations and warranties, except to the extent a breach thereof would not result in an Acquirer Material Adverse Effect or Company Material Adverse Effect, respectively (each as defined in the Implementation Agreement), (vi) compliance in all material respects by the Company and Atotech with their respective covenants, (vii) the absence of a material adverse effect on Atotech or the Company and (viii) subject to certain exceptions, termination of all agreements between Atotech and any of its affiliates. Under certain circumstances described in the Implementation Agreement, the Company may also elect to implement the Acquisition by a Jersey Merger (as defined in the Implementation Agreement) rather than a scheme of arrangement. The Company's obligations under the Implementation Agreement are not subject to any financing condition.
Under the Implementation Agreement, the Company has agreed to enter into an
agreement (the "Investor Rights Agreement") at the closing of the Acquisition
with
Under the Implementation Agreement, the Company is entitled to receive a
termination fee of
The foregoing description of the Implementation Agreement, including the form of the Investor Rights Agreement, a copy of which is attached as Schedule 6 to the Implementation Agreement, does not purport to be complete and is qualified in its entirety by reference to the Implementation Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
The Implementation Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company or Atotech or their respective subsidiaries and affiliates. The Implementation Agreement contains representations and warranties by the Company, on the one hand, and Atotech on the other hand, made solely for the benefit of the other. The assertions embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties in negotiating the terms of the Implementation Agreement, including information in a confidential disclosure schedule delivered by Atotech in connection with the signing of the Implementation Agreement. Moreover, certain representations and warranties in the Implementation Agreement were made as of a specified date, may be subject to a contractual standard of materiality different from what might be viewed as material to investors, or may have been used for the purpose of allocating risk between the Company, on the one hand, and Atotech, on the other hand, rather than establishing matters as facts. Accordingly, the representations and warranties in the Implementation Agreement should not be relied on by any persons as characterizations of the actual state of facts about the Company or Atotech at the time they were made or otherwise. In addition, information concerning the subject matter of the representations and warranties may change after the date of the Implementation Agreement, which subsequent information may or may not be fully reflected in the Company's or Atotech's public disclosures.
Deed of Irrevocable Undertaking
In connection with its entry into the Implementation Agreement, the Company has received a deed of irrevocable undertaking ("Irrevocable Undertaking") to vote or procure votes in favor of the scheme of arrangement at the court-approved shareholder meeting and the resolution to be proposed at the general meeting of Atotech from the Carlyle Shareholders in respect of 153,672,703 Atotech Shares, representing approximately 79% of the Atotech Shares. The Irrevocable Undertaking lapses only when the Implementation Agreement is terminated, provides that if the Company elects to implement the Acquisition by a Jersey Merger, that the Carlyle Shareholders must also vote their shares and accept the Jersey Merger, and, subject to certain exceptions, prohibits the applicable shareholder from transferring their Atotech Shares.
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Lock-Up Agreement
In connection with the Implementation Agreement, the Carlyle Shareholders entered into a lock-up agreement (the "Lock-Up Agreement") with the Company, pursuant to which the Carlyle Shareholders have agreed not to sell, hypothecate, pledge or otherwise dispose of a percentage of the Company Shares for a phased period ending 60 days from the Effective Date (the "Lock-Up Period"). Pursuant to the terms of the Lock-Up Agreement, 80% of the Company Shares will be subject to the Lock-Up Period for 30 days following the Effective Date and 60% of the Company Shares will be subject to the Lock-Up Period for 60 days following the Effective Date.
The foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the Lock-Up Agreement, a copy of which is being filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Commitment Letter
In connection with the Implementation Agreement, the Company entered into a debt
commitment letter (the "Commitment Letter"), dated as of
The foregoing description of the Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Commitment Letter, a copy of which is being filed as Exhibit 10.2 hereto and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
2.1 Implementation Agreement, between the Company and Atotech, dated as of
July 1, 2021
10.1 Lock-Up Agreement, between the Company and the Carlyle Shareholders,
dated as of July 1, 2021
10.2 Commitment Letter, by and among the Company, JPMorgan Chase Bank, N.A .
and Barclays Bank PLC, dated as of July 1, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Statements in this document regarding the proposed Acquisition, the expected timetable for completing the transaction, future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and any other statements about MKS' or Atotech's managements' future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are only predictions based on current assumptions and expectations. Actual events or results may differ materially from those in the forward-looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements are the ability of the parties to complete the transaction; the ability of MKS to complete its acquisition of Photon
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