Item 1.01. Entry into a Material Definitive Agreement.
On January 18, 2022, Sema4 Holdings Corp. ("Sema4" or the "Company") announced
that it executed an Agreement and Plan of Merger and Reorganization (the "Merger
Agreement") with GeneDx, Inc., a New Jersey corporation ("GeneDx"), and the
other parties thereto (the transactions contemplated by the Merger Agreement,
including the Mergers (as defined below), the "Acquisition"). This Current
Report on Form 8-K provides a summary of the Merger Agreement and the other
agreements entered into and contemplated in connection with the Acquisition. The
descriptions of these agreements do not purport to be complete and are qualified
in their entirety by the terms and conditions of such agreements, copies of
which are attached as Exhibits 2.1, 10.1, 10.2, 10.3 and 10.4 hereto.
Merger Agreement
On January 14, 2022, Sema4 and its wholly-owned subsidiaries, Orion Merger Sub
I, Inc. ("Merger Sub I") and Orion Merger Sub II, LLC ("Merger Sub II" and,
together with Merger Sub I, "Merger Subs"), entered into the Merger Agreement
with GeneDx, a wholly-owned subsidiary of OPKO Health, Inc. ("OPKO"), GeneDx
Holding 2, Inc., which will own 100% of GeneDx at the Effective Time (as defined
below) ("Holdco2"), and OPKO. Capitalized terms used but not otherwise defined
herein will have those meanings ascribed to such terms in the Merger Agreement.
Acquisition
Pursuant to the terms of the Merger Agreement, Sema4 will acquire GeneDx through
the merger of Merger Sub I with and into Holdco2 (the "First Merger"), with
Holdco2 as the surviving corporation in the First Merger. Immediately after the
consummation of the First Merger, as part of the same overall transaction,
Holdco2, as the surviving corporation in the First Merger, will merge with and
into Merger Sub II (the "Second Merger" and, together with the First Merger, the
"Mergers"), with Merger Sub II as the surviving company. After giving effect to
the Mergers and the other transactions contemplated by the Merger Agreement,
GeneDx will have converted into a Delaware limited liability company and be a
wholly-owned indirect subsidiary of Sema4. The Mergers are intended to qualify
for federal income tax purposes as a tax-free reorganization under the
provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.
The Acquisition was unanimously approved by the boards of directors of each of
Sema4 and OPKO.
The Acquisition is expected to close in the first half of 2022, subject to the
receipt of the required approval by Sema4's stockholders and the satisfaction of
the closing conditions set forth in the Merger Agreement.
Merger Consideration
Subject to the terms and conditions of the Merger Agreement, Sema4 will pay
consideration to OPKO for the Acquisition of (i) $150 million in cash at the
closing of the Acquisition (the "Closing"), subject to certain adjustments as
provided in the Merger Agreement (the "Cash Consideration"), (ii) 80 million
shares of the Company's Class A common stock, par value $0.0001 per share
("Company Class A common stock") (the "Stock Consideration"), to be issued at
the Closing and (iii) up to $150 million payable following the Closing, if
certain revenue-based milestones are achieved for each of the fiscal years
ending December 31, 2022 and December 31, 2023 (the "Milestone Payments"). Each
Milestone Payment, if and to the extent earned under the terms of the Merger
Agreement, will be satisfied through the payment and/or issuance of a
combination of cash and shares of Company Class A common stock (valued at $4.86
per share based on the average of the daily volume average weighted price of
Company Class A common stock over the period of 30 trading days ended January
12, 2022), with such mix to be determined in Sema4's sole discretion. The
Milestone Payment in respect of the fiscal year ending December 31, 2023 is
subject to acceleration on the terms described in the Merger Agreement.
The number of shares of Company Class A common stock that OPKO is entitled to
receive as a result of the Mergers, as otherwise contemplated by the Merger
Agreement, shall be adjusted to appropriately reflect the effect of any stock
split, split-up, reverse stock split, stock dividend or distribution (including
any dividend or distribution of securities convertible into Company Class A
common stock), extraordinary cash dividend, reorganization,
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recapitalization, reclassification, combination, exchange of shares or other
like change with respect to Company Class A common stock occurring on or after
the date of the Merger Agreement and prior to the Closing.
Governance
In connection with the execution of the Merger Agreement, Katherine Stueland,
the Chief Executive Officer of GeneDx, Kevin Feeley, the Chief Financial Officer
of GeneDx, and Jennifer Brendel, the Chief Commercial Officer of GeneDx, have
entered into employment agreements with Sema4, which will be effective upon the
Closing. Following the Closing, Ms. Stueland will serve as the Co-Chief
Executive Officer of Sema4, reporting to Sema4's Board of Directors (the
"Board"), Mr. Feeley will service as Senior Vice President Operations, Sema4 and
Head of GeneDx and Ms. Brendel will serve as Chief Growth Officer of Sema4.
Sema4 has agreed that OPKO will be entitled to nominate and Sema4 will seek to
have appointed to the Board: (i) one mutually agreed GeneDx designee to the
Board, initially Katherine Stueland, and (ii) one mutually agreed independent
OPKO designee to the Board following the Closing and until at least the
expiration of the milestone period, who will be identified in the proxy
statement Sema4 intends to file with the Securities and Exchange Commission (the
"SEC") and mail to its stockholders (the "Proxy Statement") in connection with
Sema4 seeking certain stockholder approvals related to the Acquisition.
Representations and Warranties; Indemnification
The Merger Agreement contains customary representations and warranties of the
parties and provides for mutual indemnification subject to customary
limitations.
Sema4 Recommendation
Sema4 is required to include in the Proxy Statement the recommendation of the
Board to Sema4's stockholders that they approve the transaction proposals (as
such proposals are more fully set forth in the Merger Agreement).
Conditions to Closing
General Conditions
The obligations of either party to consummate the Acquisition are conditioned
upon, among other things, (a) the approval of the issuance of the Stock
Consideration by Sema4's stockholders, (b) the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and (c) the absence of any order or law making the
consummation of the transactions illegal.
OPKO and the Company Parties' Conditions to Closing
The obligations of OPKO and the Company Parties' to consummate the Acquisition
also are conditioned upon, among other things, (a) customary closing conditions,
(b) the approval of the Stock Consideration for listing on the Nasdaq and (c)
Sema4's having not suffered a material adverse effect.
Sema4 Conditions to Closing
The obligations of Sema4 to consummate the Acquisition are also conditioned
. . .
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K
is incorporated by reference herein. The shares of Company Class A common stock
to be issued pursuant to the Merger Agreement and the Subscription Agreements
and the transactions contemplated thereby will not be registered under the
Securities Act, and will be issued in reliance on the exemption from
registration requirements thereof provided by Section 4(a)(2) of the Securities
Act and/or Regulation D promulgated thereunder as a transaction by an issuer not
involving a public offering. OPKO and the investors in the PIPE Investment have
represented their respective intentions to acquire the shares for investment
only and not with a view to or for sale in connection with any distribution, and
appropriate restrictive legends will be affixed to the certificates representing
all of the shares issued in the Acquisition and the PIPE Investment (or
reflected in restricted book entry with the Company's transfer agent). The
parties also had adequate access, through business or other relationships, to
information about the Company.
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Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
In connection with the Transactions, on January 14, 2022, the Board approved the
appointment of Jason Ryan, a current director of the Company, as the Executive
Chairperson of the Board, with such appointment to become effective as of
January 18, 2022.
In addition, in connection with the Transactions, effective as of January 14,
2022, Keith Meister was appointed to the Board as a director of the Company (the
"Director Appointment"). Following the Director Appointment, the Board consists
of a total of ten directors, with Eli D. Casdin, Joshua Ruch and Michael Pellini
as Class I directors of the Company whose terms expire at the Company's 2022
annual meeting of stockholders; Rachel Sherman, Eric Schadt, Nat Turner and
Dennis Charney as Class II directors of the Company whose terms expire at the
Company's 2023 annual meeting of stockholders; and Emily Leproust, Jason Ryan
and Keith Meister as Class III directors of the Company whose terms expire at
the Company's 2024 annual meeting of stockholders. In connection with Mr.
Meister's appointment to the Board, he entered into an indemnification agreement
with the Company in the form previously filed as Exhibit 10.4 to Sema4's Current
Report on Form 8-K filed with the SEC on July 28, 2021 (the "July 28, 2021
8-K"). In connection with the appointment of Mr. Ryan as the Executive
Chairperson of the Board, Mr. Ryan stepped down from his role as Chairperson of
the audit committee and Mr. Meister was appointed to serve as the Chairperson of
the audit committee.
There is no arrangement or understanding between Mr. Meister and any other
persons pursuant to which Mr. Meister was selected as a director, and, except as
described herein, there are no related party transactions involving Mr. Meister
that are reportable under Item 404(a) of Regulation S-K, other than through his
role as manager of Corvex Management LP ("Corvex"), a stockholder of the
Company, and his former role as a member of the board of managers of CMLS
Holding LLC (the "Former Sponsor"). The Company's prior transactions with Corvex
and the Former Sponsor are described under "Certain Relationships and Related
Party Transactions" beginning on page 304 of the Company's definitive proxy
statement filed with the SEC on July 2, 2021, which description is incorporated
herein by reference. In addition, Corvex has entered into a Subscription
Agreement and a Support Agreement in connection with the Transactions. Further,
Mr. Meister will receive compensation for his service on the Board consistent
with the Company's standard compensation arrangements for non-employee
directors.
The foregoing description of the form of indemnification agreement does not
purport to be complete and is qualified in its entirety by reference to the full
text of the form of indemnification agreement, a copy of which is attached as
Exhibit 10.4 to the July 28, 2021 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On January 18, 2022, Sema4 issued a press release announcing that it entered
into the Merger Agreement described in Item 1.01 of this Current Report. A copy
of the press release is furnished hereto as Exhibit 99.1. Furnished as Exhibit
99.2 hereto is an investor presentation, dated January 18, 2022, used by Sema4
regarding the Transactions. The information in this Item 7.01 and Exhibits 99.1
and 99.2 attached hereto 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 liabilities under that section, and shall not be deemed to
be incorporated by reference into the filings of Sema4 under the Securities Act
or the Exchange Act, regardless of any general incorporation language in such
filings. In the same press release, Sema4 also announced fiscal year 2022
guidance on revenue and resulting test volume.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
2.1 * Agreement and Plan of Merger and Reorganization, dated as of January 14, 2022,
by and among, Orion Merger Sub I, Inc., Orion Merger Sub II, LLC, GeneDx, Inc.,
GeneDx Holding 2, Inc. and OPKO Health, Inc.
10.1 Form of Subscription Agreement.
10.2 Form of Shareholder Agreement.
10.3 Form of Support Agreement.
10.4 Form of Lock-Up Agreement.
99.1 Press Release issued by the Company on January 18, 2022.
99.2 Investor Presentation of the Company dated January 18, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL Document)
* The schedules and exhibits to the Agreement and Plan of Merger and
Reorganization have been omitted from this filing pursuant to Item 601(a)(5) of
Regulation S-K. Sema4 will furnish copies of any such schedules and exhibits to
the Securities and Exchange Commission upon request.
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