Item 1.01 Entry into a Material Definitive Agreement.
On May 29, 2022, PotlatchDeltic Corporation, a Delaware corporation
("PotlatchDeltic") and Horizon Merger Sub 2022, LLC, a Delaware limited
liability company ("Merger Sub"), entered into an Agreement and Plan of Merger
(the "Merger Agreement") with, CatchMark Timber Trust, Inc., a Maryland
corporation ("CatchMark") and CatchMark Timber Operating Partnership, L.P. a
Delaware limited partnership (the "Partnership").
Pursuant to the Merger Agreement, CatchMark will be merged with and into Merger
Sub (the "Company Merger"), with Merger Sub surviving the Company Merger.
Immediately following the Company Merger, the Partnership will be merged with
and into Merger Sub (the "Partnership Merger" and together with the Company
Merger, collectively the "Mergers"), with Merger Sub surviving the Partnership
Merger. Capitalized terms used below but not defined herein have the respective
meanings assigned thereto in the Merger Agreement.
The board of directors of PotlatchDeltic (the "Board") has unanimously approved
the Merger Agreement, the Mergers and the other transactions contemplated by the
Merger Agreement.
Merger Consideration
At the effective time of the Company Merger, each issued and outstanding share
of CatchMark's Class A common stock (the "Common Stock"), other than those
shares held by CatchMark, the Partnership, PotlatchDeltic, Merger Sub or any of
their respective wholly owned subsidiaries, will be converted into the right to
receive 0.230 shares of common stock of PotlatchDeltic plus the right, if any,
to receive cash in lieu of fractional shares of common stock of PotlatchDeltic
(the "Merger Consideration").
Immediately prior to the effective time of the Company Merger, any and all
outstanding issuance and forfeiture conditions on any Common Stock subject to an
award of Common Stock granted under CatchMark's equity incentive plans that is
unvested or subject to a substantial risk of forfeiture will be deemed satisfied
in full and on a fully vested basis (at maximum performance to the extent
applicable), and convert into the Merger Consideration.
Immediately prior to the effective time of the Partnership Merger (i) each
issued and outstanding unvested LTIP Unit of the Partnership will automatically
become fully vested at maximum performance, to the extent applicable and
(ii) immediately after such vesting, each vested LTIP Unit of the Partnership
that is eligible for conversion into Partnership OP Units will automatically
convert into common units of the Partnership (the "Partnership OP Units").
At the effective time of the Partnership Merger, each of the issued and
outstanding Partnership OP Units, other than those held by CatchMark, the
Partnership, PotlatchDeltic, Merger Sub or any of their respective wholly owned
subsidiaries, will automatically convert into the Merger Consideration.
Governance; Other Matters
Effective as of immediately after the effective time of the Company Merger, one
member of the board of directors of CatchMark (the "CatchMark Board") selected
by CatchMark will be appointed to the board of directors of PotlatchDeltic (the
"CatchMark Designated Director"). From the Closing until immediately after the
first annual meeting of stockholders of PotlatchDeltic occurring after the
Closing, PotlatchDeltic must take actions reasonably necessary to cause the
CatchMark Designated Director to be appointed to the board of directors of
PotlatchDeltic.
Following the effective time of the Company Merger, PotlatchDeltic will use
commercially reasonable efforts to establish a regional office in Atlanta,
Georgia.
Closing Conditions
The consummation of the Mergers is subject to certain closing conditions,
including (i) the approval of the Company Merger by the holders of a majority of
the outstanding Common Stock of CatchMark, (ii) the absence of any temporary
restraining order, injunction or other legal order, and law being enacted, which
would have the effect of making illegal or otherwise prohibiting the
consummation of the Mergers, (iii) the Form S-4 to be filed by PotlatchDeltic in
connection with common stock of PotlatchDeltic to be issued in the Mergers being
declared effective, (iv) the shares of common stock of PotlatchDeltic to be
issued in the Mergers will have been approved for listing on Nasdaq, (v) the
receipt of certain legal opinions by PotlatchDeltic and CatchMark and (vi) other
customary conditions specified in the Merger Agreement.
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Representations, Warranties and Covenants
Each of CatchMark, the Partnership, PotlatchDeltic and Merger Sub made
representations and warranties in the Merger Agreement. Each of CatchMark and
the Partnership has also agreed to various customary covenants and agreements,
including, subject to certain exceptions, (i) to conduct its business in all
material respects in the ordinary course of business and in a manner consistent
with past practice, subject to certain exceptions, during the period between the
execution of the Merger Agreement and the consummation of the Mergers and
(ii) to call and hold a stockholder meeting and recommend that CatchMark's
stockholders adopt the Merger Agreement. Each of PotlatchDeltic and CatchMark
agreed not to make, declare or set aside any dividend or other distribution to
its respective stockholders or shareholders without the prior written consent of
the other party, except that upon written notice to the other party,
(i) CatchMark may authorize and pay (i) quarterly distributions at a rate not in
excess of $0.075 per share per quarter and (ii) the regular distributions that
are required to be made in respect of the Partnership LTIP Units and the
Partnership OP Units in connection with any dividends paid on the Common Stock
of CatchMark in accordance with the terms of the partnership agreement of the
Partnership and (ii) PotlatchDeltic may authorize and pay quarterly
distributions at a rate not in excess of $0.44 per share per quarter.
CatchMark agreed not to (i) solicit proposals relating to certain alternative
transactions, (ii) enter into discussions or negotiations or provide non-public
information in connection with any proposal for an alternative transaction from
a third party, (iii) approve or enter into any agreements providing for any such
alternative transaction, subject to certain exceptions to permit members of the
CatchMark Board to comply with their duties as directors under applicable law,
or (iv) propose or agree to do any of the foregoing. Notwithstanding these
"no-shop" restrictions, prior to obtaining CatchMark stockholder approval, under
specified circumstances the CatchMark Board may change its recommendation of the
transaction, and CatchMark may also terminate the Merger Agreement to accept a
superior proposal upon payment of the termination fee described below.
Termination of the Merger Agreement
The Merger Agreement may be terminated under certain circumstances, including by
either PotlatchDeltic or CatchMark if the Mergers have not been consummated on
or before 5:00 p.m. (New York time) on November 29, 2022, if a final and
non-appealable order is entered enjoining or otherwise prohibiting the Mergers,
or if CatchMark's shareholders shall have voted at the special meeting held to
consider the approval of the Company Merger and the Company Merger is not
approved.
The Merger Agreement provides that, in connection with the termination of the
Merger Agreement under specified circumstances, CatchMark may be required to pay
to PotlatchDeltic a termination fee of $19,384,231. However, the termination fee
payable by the CatchMark to PotlatchDeltic will be $9,692,116 if the Merger
Agreement is terminated before the end of the "Window Period End Time" by
(i) CatchMark in order for CatchMark to accept a superior proposal from a
"Qualified Bidder" or (ii) PotlatchDeltic because the CatchMark Board changed
its recommendation that CatchMark's stockholders approve the Company Merger as
the result of a superior proposal from a "Qualified Bidder." Under the terms of
the Merger Agreement, a "Qualified Bidder" is a bidder that has delivered an
acquisition proposal on or prior to 11:59 p.m. (New York time) on June 28, 2022
with respect to which, on or prior to such date, the CatchMark Board concluded
in good faith (after consultation with its outside legal counsel and its
financial advisors) either constituted or would reasonably be expected to lead
to a superior proposal (provided that such bidder will cease to be a "Qualified
Bidder" if its acquisition proposal is withdrawn, terminates or expires after
June 28, 2022). In addition, the term "Window Period End Time" in the Merger
Agreement means, with respect to a Qualified Bidder, the later of (i) 11:59 p.m.
(New York time) on July 13, 2022 and (ii) one business day after the end of a
required notice period with respect to a superior proposal by such Qualified
Bidder provided that such notice period (as may be extended) began on or prior
to 11:59 p.m. (New York time) on July 13, 2022.
The foregoing description of the Merger Agreement and the transactions
contemplated thereby does not purport to be complete and is subject to and
qualified in its entirety by reference to the Merger Agreement, a copy of which
is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
The Merger Agreement has been included in this Current Report of Form 8-K to
provide investors and security holders with information regarding its terms. It
is not intended to provide any other factual information about CatchMark. The
representations, warranties and covenants contained in the Merger Agreement were
. . .
Item 8.01 - Other Events
On May 31, 2022, PotlatchDeltic and CatchMark issued a press release announcing
the Merger. A copy of the press release is filed hereto as Exhibit 99.1 and is
incorporated herein by reference.
ADDITIONAL INFORMATION
This communication is being made in respect of the proposed Merger involving
PotlatchDeltic and CatchMark. This communication does not constitute an offer to
sell or the solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
In connection with the proposed transaction, PotlatchDeltic plans to file with
the Securities and Exchange Commission ("SEC") a Registration Statement on Form
S-4 that constitutes a prospectus of PotlatchDeltic and will also include a
proxy statement of CatchMark. After the Registration Statement has been declared
effective, CatchMark will mail the definitive proxy statement/prospectus to its
stockholders. The proxy statement/prospectus to be filed with the SEC related to
the proposed merger will contain important information about PotlatchDeltic,
CatchMark, the proposed transaction and related matters. Investors are urged to
carefully read the proxy statement/prospectus and other documents to be filed
with the SEC (or incorporated by reference into the proxy statement/prospectus)
in connection with the proposed merger, when available. Investors will be able
to obtain free copies of the joint proxy statement/prospectus, when it is filed
with the SEC, and other documents filed by PotlatchDeltic with the SEC through
the website maintained by the SEC at www.sec.gov or by contacting
PotlatchDeltic's Investor Relations by telephone at (509) 835-1521 or by mail at
601 West First Avenue, Suite 1600, Spokane Washington 99201. In addition,
investors will be able to obtain free copies of the documents filed with the SEC
on PotlatchDeltic's website at www.potlatchdeltic.com (which website is not
incorporated herein by reference).
PotlatchDeltic and its directors and officers and certain other members of
management and employees may be deemed to be participants in the solicitation of
proxies from stockholders of CatchMark in connection with the Merger. Certain
information about the directors and executive officers of PotlatchDeltic is set
forth in its Annual Report on Form 10-K for the year ended December 31, 2021,
which was filed with the SEC on February 17, 2022, and its proxy statement for
its 2022 annual meeting of stockholders, which was filed with the SEC on
March 29, 2022, and will be contained in the proxy statement/prospectus
described above when it is filed with the SEC. You can obtain free copies of
these document from PotlatchDeltic using the contact information above.
CAUTION ABOUT FORWARD-LOOKING STATEMENTS
Statements made in this communication and related statements that express
PotlatchDeltic's or its management's intentions, hopes, indications, beliefs,
expectations, or predictions of the future constitute forward-looking
statements, as defined by the Private Securities Litigation Reform Act of 1995,
and relate to matters that are not historical facts. These statements include
those regarding the closing of the merger transaction, the expected timing of
the merger transaction and the potential effects of the merger transaction,
including if it does not close.
These statements are not guarantees of future performance or events and are
subject to risks, uncertainties and assumptions that could cause actual results
or events to vary materially from those indicated in this communication,
including: the inability to obtain regulatory approvals of the Merger on the
proposed terms and schedule; the failure of CatchMark's stockholders to approve
the Company Merger; disruption to our business, including customer, employee and
supplier relationships resulting from the merger transaction; the inability to
implement business plans, forecasts, and other expectations after the completion
of the Mergers, and identify and realize synergies or other expected benefits;
the occurrence of any event, change, or other circumstance that could give rise
to a termination of the Merger Agreement; and other factors described in
PotlatchDeltic's reports filed with the SEC, including its annual report for the
year ended December 31, 2021 and subsequent quarterly reports, which risks and
uncertainties are incorporated herein by reference. You are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date of this communication. Except to the extent required by law,
PotlatchDeltic disclaims any obligation to update any forward-looking statements
after the distribution of this communication, whether as a result of new
information, future events, changes in assumptions, or otherwise.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
2.1 Agreement and Plan of Merger, dated as of May 29, 2022, by and among
PotlatchDeltic Corporation, Horizon Merger Sub 2022, LLC, CatchMark
Timber Trust, Inc. and Catchmark Timber Operating Partnership, L.P.*
99.1 Press Release, dated May 31, 2022, announcing the execution of the
Merger Agreement
104 Cover Page interactive data file (Embedded within the Inline XBRL
document)
* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
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