Item 1.01. Entry into a Material Definitive Agreement.
On June 21, 2021, SharpSpring, Inc. (the "Company") entered into an Agreement
and Plan of Merger (the "Merger Agreement") with Constant Contact, Inc., a
Delaware corporation ("Parent") and Groove Merger Sub, Inc., a Delaware
corporation and a direct wholly owned Subsidiary of Parent ("MergerSub").
Capitalized terms used herein but not otherwise defined have the meaning set
forth in the Merger Agreement.
The Merger Agreement contemplates that the MergerSub will be merged with and
into the Company (the "Merger"), with the Company continuing as the surviving
corporation of the Merger and as a wholly owned Subsidiary of the Parent, and
each outstanding share of common stock of the Company, par value $0.001 per
share (the "Company Common Stock") (other than shares held in the treasury of
the Company, owned by Parent or the MergerSub, or any Dissenting Shares), will
cease to be outstanding and will be converted into the right to receive an
amount in cash equal to $17.10, without interest, subject to deduction for any
required withholding tax or other amounts required to be withheld therefrom. Any
Option to purchase Company Common Stock and any restricted stock unit ("RSU")
that is outstanding immediately prior to the effective time of the Merger (the
"Effective Time"), whether or not then vested or exercisable, will be deemed
cancelled at and as of the Closing. Each Option vested, outstanding, and
unexercised immediately prior to the Closing will be cancelled, and holders will
be entitled to receive the Per Share Merger Consideration, less (1) the exercise
price per share and (2) any required withholding amounts minus the exercise
price. Each RSU that is vested will be canceled and the holder will be entitled
to the product of the $17.10 and the total number of shares of common stock
underlying the vested RSUs, minus any required withholding amounts. Each Option
and RSU that is unvested will be cancelled, terminated and extinguished by the
Company, and the holder shall receive no consideration, unless different
treatment is required by an agreement between the Company and the holder, or is
otherwise agreed by the holder and the Parent.
The Company has made representations, warranties and covenants in the Merger
Agreement customary for transactions of this type, including, among others,
covenants (i) not to solicit proposals relating to alternative business
combination transactions, or enter into discussions concerning or provide
information in connection with alternative business combination transactions,
and (ii) subject to certain exceptions, not to withhold or withdraw or, in a
manner adverse to Parent or MergerSub, qualify, amend, or modify, the
recommendation of the Company's Board of Directors to the Company's
stockholders, as described below. The Company has also agreed to convene and
hold a meeting of the Company's stockholders for the purpose of approving the
Merger Agreement and the transactions contemplated thereby, including the
Merger, and the Company's Board of Directors has unanimously resolved to
recommend that the stockholders of the Company vote in favor of adoption and
approval of the Merger Agreement.
Consummation of the Merger is subject to various customary conditions, including
the adoption of the Merger Agreement by the requisite vote of the Company's
stockholders, the expiration or termination of the waiting period applicable to
the consummation of the Merger under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the absence of any governmental order
preventing or prohibiting or restricting the consummation of the transactions
contemplated by the Merger Agreement.
The Merger Agreement contains certain termination rights, including the right of
the Company to terminate the Merger Agreement to accept a "Superior Offer," as
defined in the Merger Agreement, based upon certain conditions and requirements,
including payment by the Company of a termination fee of approximately $7.0
million. Upon termination of the Merger Agreement by the Company upon specified
conditions, Parent will be required to pay the Company a termination fee equal
to approximately $11.7 million. In addition, subject to certain exceptions and
limitations, either party may terminate the Merger Agreement if the Merger is
not consummated by October 21, 2021 (the "Outside Date").
Parent will use its reasonable best efforts to obtain the required closing
amount under its existing debt facility, together with cash on hand, or if such
facility becomes unavailability, then Parent shall use its reasonable best
efforts to obtain alternative debt financing on terms not materially less
favorable, in the aggregate, to Parent than those under Parent's existing debt
facility.
2
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of such
agreement, which is attached hereto as Exhibit 2.1, and is incorporated by
reference herein.
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. The representations, warranties and covenants contained in
the Merger Agreement were made only for purposes of that 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
"materiality" under applicable securities laws. Investors are not thirdparty
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 Company,
Parent or MergerSub or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter of the
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.
Item 8.01. Other Events.
On June 21, 2021 concurrently with the execution of the Merger Agreement, the
Parent entered into a Voting and Support Agreement (the "Voting Agreement") with
certain funds affiliated with Greenhaven Road Investment Management, LP, as well
as by the directors and executive officers of the Company, pursuant to which
such stockholders agreed, among other things, to vote their shares of Company
Common Stock in favor of (i) the Merger, (ii) each of the other actions
contemplated by the Merger Agreement, and (iii) certain matters reasonably be
expected to facilitate the Merger, and agreed to certain restrictions on their
ability to take actions with respect to the Company and their shares of Company
Common Stock including, without limitation, the exercise of appraisal rights
with respect to such shares.
The foregoing description of the Voting Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
form of Voting Agreement, a copy of which is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
2.1 Agreement and Plan of Merger, by and among Constant Contact, Inc.,
Groove Merger Sub, Inc., and SharpSpring, Inc., dated as of June 21,
2021.
Form of Voting and Support Agreement, dated as of June 21, 2021, by
99.1 and among Constant Contact, Inc. and certain stockholders of the
Company.
3
Forward-Looking Statements
This current report on Form 8-K contains "forward-looking statements" as defined
in the U.S. Private Securities Litigation Reform Act of 1995. The reader is
cautioned not to rely on these forward-looking statements, such as statements
regarding the proposed transaction between Constant Contact and the Company, 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 Constant
Contact and the Company's managements' future expectations, beliefs, goals,
plans or prospects. These statements are based on current expectations of future
events, and these include statements using the words such as "believes,"
"plans," "anticipates," "expects," "estimates" and similar expressions. If
underlying assumptions prove inaccurate or known or unknown risks or
uncertainties materialize, actual results could vary materially from the
Company's expectations. Risks and uncertainties include, but are not limited to:
the risk that the transaction may not be completed in a timely manner or at all,
which may adversely affect the Company's business and the price of its common
stock; the failure to satisfy the conditions to the consummation of the
transaction, including the adoption of the merger agreement by the stockholders
of the Company, and the receipt of certain governmental and regulatory
approvals; the effect of the announcement or pendency of the transaction on the
Company's business relationships, operating results, and business generally;
risks that the proposed transaction disrupts the Company's current plans and
operations and potential difficulties in the Company's employee retention as a
result of the transaction; risks related to diverting management's attention
from the Company's ongoing business operations; and the outcome of any legal
proceedings that may be instituted against the Company or the purchaser related
to the merger agreement or the transaction. The foregoing list of factors is not
exhaustive. You should carefully consider the foregoing factors and the other
risks and uncertainties that the Company's business as described in the "Risk
Factors" in the Company's Annual Report on Form 10-K for the year ended December
31, 2021 and in the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2021, and other reports the Company files with the SEC. The
Company assumes no obligation to update any forward-looking statements contained
in this document as a result of new information, future events or otherwise.
These filings identify and address other important risks and uncertainties that
could cause actual events and results to differ materially from those
contemplated in the forward-looking statements. Copies of these filings are
available online at www.sec.gov and https://investors.sharpspring.com/. The
Company assumes no obligation and does not intend to update or revise these
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Important Information for Investors
In connection with the proposed transaction, the Company intends to file with
the SEC a proxy statement (the "proxy statement") and mail the proxy statement
to its stockholders. The Proxy Statement will contain important information
about Constant Contact, the Company, the transaction and related matters.
INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ CAREFULLY THE
PROXY STATEMENT WHEN IT BECOMES AVAILABLE, AND OTHER RELEVANT DOCUMENTS, AND ANY
RELATED AMENDMENTS OR SUPPLEMENTS, FILED WITH THE SEC BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE COMPANY, THE PROPOSED TRANSACTION AND RELATED
MATTERS. Investors and security holders may obtain free copies of the proxy
statement and other documents (when available) that the Company files with the
SEC through the website maintained by the SEC at www.sec.gov. Copies of the
documents filed with the SEC by the Company will be available free of charge on
the Company's investor relations website at https://investors.sharpspring.com/
or by contacting the Company's Investor Relations Department at
SHSP@gatewayir.com.
No Offer or Solicitation
This communication is neither an offer to buy, nor a solicitation of an offer to
sell, subscribe for or buy any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to or in connection with the proposed
transaction or otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
Participants in the Solicitation
The directors and executive officers of the Company may be deemed to be
participants in the solicitation of proxies from the stockholders of the
Company in connection with the proposed acquisition. Information regarding the
interests of these directors and executive officers in the transaction described
herein will be included in the proxy statement described above. Additional
information regarding the Company's directors and executive officers is also
included in the Company's definitive proxy statement for its 2021 Annual Meeting
of Stockholders, which was filed with the SEC on April 30, 2021. These documents
are available free of charge as described in the preceding paragraph.
4
© Edgar Online, source Glimpses