Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On December 21, 2020 (the "Signing Date"), Sportsman's Warehouse Holdings, Inc.,
a Delaware corporation (the "Company"), Great Outdoors Group, LLC, a Delaware
limited liability company ("Parent"), and Phoenix Merger Sub I, Inc., a Delaware
corporation and a wholly-owned subsidiary of Parent ("Merger Subsidiary"),
entered into a definitive Agreement and Plan of Merger (the "Merger Agreement").
Pursuant to the terms and conditions set forth in the Merger Agreement, Merger
Subsidiary will be merged with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation in the Merger and a wholly-owned
subsidiary of Parent. Subject to the terms and conditions set forth in the
Merger Agreement, at the effective time of the Merger (the "Effective Time"),
each share of the Company's common stock, par value $0.01 per share (the
"Shares"), outstanding immediately prior to the Effective Time (other than such
Shares held by (i) Parent, Merger Subsidiary, or any other subsidiary of Parent,
(ii) the Company or its subsidiaries, as treasury stock or (iii) stockholders of
the Company who properly exercised their appraisal rights for such Shares under
the Delaware General Corporation Law) will automatically be canceled and
converted into the right to receive $18.00 per Share in cash, without interest
and less any applicable withholding taxes (the "Per Share Merger
Consideration"). In addition, at or immediately prior to the Effective Time,
each award of restricted stock units with respect to Shares (each an "RSU
Award") that is outstanding immediately prior to the Effective Time will be
cancelled and converted into the right to receive an amount in cash equal to
product of (x) the number of Shares subject to such RSU Award immediately prior
to the Effective Time (provided that (1) as to any such RSU Award that is
subject to performance-based vesting conditions, such number of Shares will be
determined in accordance with the change of control provision of the applicable
award agreement for such RSU Award, and (2) as to any such RSU Award that is
granted after the Signing Date and provides for pro-rata vesting should the
Effective Time occur within six months after the grant date of such award, such
number of Shares will be determined based on such pro-rata vesting provision of
the applicable award agreement for such RSU Award), multiplied by (y) the Per
Share Merger Consideration.
The Merger Agreement has been unanimously adopted by the board of directors of
the Company (the "Board"), and the Board has unanimously recommended that
stockholders of the Company adopt the Merger Agreement.
Completion of the Merger is subject to the satisfaction of several conditions,
including: (i) adoption of the Merger Agreement by the affirmative vote of the
holders of a majority of the outstanding Shares; (ii) the expiration or
termination of any applicable waiting period (and any extensions thereof)
relating to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"); (iii) the absence of any order, injunction, or
other judgment by any governmental authority of competent jurisdiction that
enjoins or otherwise prohibits the consummation of the Merger; (iv) the accuracy
of each party's representations and warranties (subject to certain
qualifications); (v) each party's performance in all material respects of its
obligations contained in the Merger Agreement; and (vi) the absence of a
material adverse effect on the Company.
Parent and the Company have made customary representations, warranties and
covenants in the Merger Agreement, including covenants: (i) in the case of the
Company, to cause a meeting of the Company's stockholders to be duly called and
held as soon as reasonably practicable (and in any event within forty-five days)
following the clearance of a proxy statement in connection with the Merger by
the U.S. Securities and Exchange Commission (the "SEC"), for the purpose of
voting on the adoption of the Merger Agreement and certain related proposals;
(ii) to use their reasonable best efforts to effect all necessary filings,
notices, petitions, registrations, and other submissions required pursuant to
governmental approvals and other applicable laws, including making appropriate
filings required in connection with the Merger pursuant to the HSR Act and any
other antitrust laws of other jurisdictions; and (iii) to cooperate with each
other and use their reasonable best efforts to consummate the Merger and the
other transactions contemplated by the Merger Agreement as promptly as
practicable. The Company has also agreed, subject to certain exceptions, to
conduct its business in the ordinary course consistent with past practice,
including not taking certain specified actions, prior to the consummation of the
Merger or the termination of the Merger Agreement pursuant to its terms.
The parties to the Merger Agreement also agreed that during the period beginning
on the Signing Date and continuing until the end of the day on January 31, 2021
(such date, the "No-Shop Period Start Date" and such period, the "Go-Shop
Period"), the Company, its subsidiaries and their respective representatives
will have the right to: (i) solicit, initiate, propose or induce the making,
submission or announcement of, or encourage, facilitate or assist any proposal
or offer that could constitute an alternative proposal for the acquisition of
the Company; (ii) provide information (including non-public information and
data) relating to the Company or any of its subsidiaries, and afford access to
the business, properties, assets, books, records or other non-public
information, or to any personnel, of the Company or any of its subsidiaries to
any person or entity (including their representatives and potential financing
sources), pursuant to a confidentiality agreement between the Company and such
persons; (iii) engage in, enter into, continue or otherwise participate in, any
discussion or negotiations with any person or entity (including their
representatives and potential financing sources) with respect to any alternative
proposal for the acquisition of the Company (or any inquiries, proposals, offers
or other efforts that would reasonably be expected to lead to such an
alternative proposal); and (iv) cooperate with, assist or participate in, or
facilitate any such inquiries, proposals, discussions or negotiations or any
effort or attempt to make an alternative proposal for the acquisition of the
Company. Within one business day after the No-Shop Period Start Date, the
Company has agreed to deliver to Parent a list identifying each person or entity
("Excluded Parties") that made an alternative proposal to acquire the Company
during the Go-Shop Period that the Board has determined prior to the No-Shop
Period Start Date in good faith (and after consultation with its financial
advisor and outside legal counsel) to constitute or would reasonably be expected
to lead to a superior proposal to the proposed Merger.
In addition, the Company has agreed that starting on the No-Shop Period Start
Date and until the earlier of the Effective Time or the valid termination of the
Merger Agreement, it will not: (i) solicit, initiate, knowingly encourage or
knowingly facilitate any proposal or offer which constitutes, or would
reasonably be expected to lead to, any alternative proposal for the acquisition
of the Company; or (ii) engage in, continue or otherwise participate in any
discussions or negotiations with third parties regarding, or furnish any
information to third parties in connection with, or for the purpose of knowingly
encouraging or knowingly facilitating, any inquiry, proposal or offer that
constitutes or would reasonably be expected to lead to an alternative proposal
for the acquisition of the Company. However, these restrictions will not
commence with respect to Excluded Parties until the end of the day on February
20, 2021, and even after such date, the Company will be permitted to continue
discussions with and provide non-public information to such Excluded Parties
(and their representatives and potential financial sources) in connection with
their alternative proposal, to the same extent as permitted during the Go-Shop
Period.
The Company further agreed that from the Signing Date until the earlier of the
Effective Time or the termination of the Merger Agreement, neither the Board nor
any committee thereof will: (i) change, qualify, withdraw, withhold or modify
the Board's recommendation that stockholders of the Company adopt and approve
the Merger Agreement (the "Board Recommendation") in a manner adverse to Parent
or fail to include such the Board Recommendation in the Company's proxy
statement for a special meeting of the Company's stockholders to vote on the
Merger; (ii) adopt, approve, endorse, or recommend that the Company's
stockholders approve, any alternative proposal for the acquisition of the
Company; (iii) fail to make or reaffirm the Board Recommendation after any
alternative proposal for the acquisition of the Company or a material
modification thereto is first published, within ten business days of Parent's
written request that the Board make or reaffirm the Board Recommendation; (iv)
fail to recommend against certain alternative proposals for the acquisition of
the Company that are structured as a tender or exchange offer within ten
business days after the commencement of such offer; or (v) publicly propose or
agree to any of the following.
However prior to adoption of the Merger Agreement by the affirmative vote of the
holders of a majority of the outstanding Shares and subject to the satisfaction
. . .
Item 8.01 Other Events.
On December 21, 2020, the Company and Parent issued a joint press release
announcing the entry into the Merger Agreement. A copy of the press release is
attached as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of December 21, 2020, among
the Company, Parent, and Merger Subsidiary.
99.1 Joint Press Release issued December 21, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in respect of the
proposed merger of the Company with Merger Subsidiary, a wholly-owned subsidiary
of Parent. The Company intends to file relevant materials with the SEC,
including a proxy statement in preliminary and definitive form, in connection
with the solicitation of proxies for the proposed merger. The definitive proxy
statement will contain important information about the proposed merger and
related matters. BEFORE MAKING A VOTING DECISION, STOCKHOLDERS OF THE COMPANY
ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE MERGER. Stockholders
will be able to obtain copies of the proxy statement and other relevant
materials (when they become available) and any other documents filed by the
Company with the SEC for no charge at the SEC's website at www.sec.gov. In
addition, stockholders will be able to obtain free copies of the proxy statement
from the Company by contacting the Company's Investor Relations Department by
telephone at (801) 566-6681, by mail to Sportsman's Warehouse Holdings, Inc.,
Attention: Investor Relations, 1475 West 9000 South, Suite A, West Jordan, Utah
84088, or by going to the Company's Investor Relations page on its corporate
website at http://investors.sportsmans.com.
Participants in Solicitation
The Company and certain of its directors, executive officers and other employees
may be deemed to be participants in the solicitation of proxies from the
Company's stockholders in respect of the Merger. Information about the Company's
directors and executive officers is available in the Company's proxy statement
for its 2020 annual meeting of stockholders filed with the SEC on April 17,
2020. Other information regarding persons who may be deemed participants in the
proxy solicitation, including their respective direct or indirect interests by
security holdings or otherwise, will be set forth in the definitive proxy
statement that the Company intends to file with the SEC in respect of the
Merger. These documents can be obtained free of charge from the sources
indicated above.
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