Item 1.01 Entry Into a Material Definitive Agreement.
On July 17, 2020, Synaptics Incorporated (the "Company") entered into an
Agreement and Plan of Merger (the "Merger Agreement") by and among the Company,
Falcon Merger Sub, Inc., a Washington corporation and a wholly owned subsidiary
of the Company ("Merger Sub"), DisplayLink Corporation, a Washington corporation
("DisplayLink"), certain holders of equity securities of DisplayLink that become
parties to the Merger Agreement by execution of a Joinder Agreement (the
"Sellers") and Shareholder Representative Services LLC, a Colorado limited
liability company, solely in its capacity as the representative, agent and
attorney-in-fact for the Sellers. Pursuant to the Merger Agreement, Merger Sub
will be merged with and into DisplayLink (the "Merger") at the effective time of
the Merger (the "Effective Time") and DisplayLink will continue as the surviving
entity of the Merger following the Effective Time (the "Surviving Corporation").
The aggregate merger consideration will equal $305 million, subject to (i) an
increase for DisplayLink's estimated cash and cash equivalents at the closing of
the Merger (the "Closing"), (ii) a decrease for DisplayLink's estimated
indebtedness outstanding immediately prior to the Closing, (iii) a decrease for
the unpaid portion as of the Closing of certain transaction expenses incurred by
DisplayLink, and (iv) an increase or decrease equal to the amount that the
estimated working capital of DisplayLink exceeds or falls short, respectively,
of a certain specified target working capital set forth in the Merger Agreement.
Such aggregate merger consideration is further subject to a final, post-closing
purchase price adjustment, which adjustment is supported by a purchase price
adjustment escrow fund.
At the Effective Time, each share of (i) capital stock of DisplayLink (other
than shares of Series D-2 Preferred Stock of DisplayLink), other than shares
held by DisplayLink in its treasury, by its subsidiaries or by the Company or
Merger Sub immediately prior to the Effective Time, or shares held by
stockholders of DisplayLink that have validly exercised their appraisal rights
in accordance with applicable law (the "Excluded Shares"), will be canceled,
extinguished and automatically converted into the right to receive the Common
Per Share Amount (as defined in the Merger Agreement), and (ii) Series D-2
Preferred Stock of DisplayLink, other than Excluded Shares, will be canceled,
extinguished and automatically converted into the right to receive the Series
D-2 Per Share Amount (as defined in the Merger Agreement). Each outstanding
DisplayLink Eligible Option (as defined in the Merger Agreement) will be
canceled at the Effective Time for consideration pursuant to the Merger
The transaction is expected to close in the Company's first fiscal quarter of
2021, subject to satisfaction of certain closing conditions. Each party's
obligation to consummate the transaction pursuant to the Merger Agreement is
subject to a number of conditions as set forth therein, including, among others
(i) the accuracy of the representations and warranties of the parties (subject,
in certain cases, materiality qualifiers), (ii) performance in all material
respects by each of the parties of its obligations and covenants,
(iii) procurement of certain specified third-party consents, and (iv) absence of
any material adverse effect. The Merger Agreement also contains certain
termination rights for both the Company and DisplayLink.
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the Merger Agreement,
which is expected to be filed with the Company's next quarterly report in
accordance with the rules and regulations of the Securities and Exchange
Subject to the terms of the Merger Agreement, the representations and warranties
set forth in the Merger Agreement were made solely for the benefit of the
parties to the Merger Agreement and the Merger Agreement (i) should not be
treated as categorical statements of fact, but rather as a way of allocating the
risk to one of the parties if those statements prove to be inaccurate, (ii) may
have been qualified in the Merger Agreement by disclosures that were made to the
other parties in accordance with the Merger Agreement, (iii) may apply
contractual standards of "materiality" that are different from "materiality"
under applicable securities laws, and (iv) were made only as of the dates set
specified in the Merger Agreement.
Item 7.01 Regulation FD Disclosure.
On July 20, 2020, the Company issued a press release regarding the entry into
the Merger Agreement. The press release is furnished herewith as Exhibit 99.1
and is incorporated herein by reference.
The information contained in this Item 7.01 and in the accompanying Exhibit 99.1
shall not be deemed filed for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in
any filing under the Exchange Act or the Securities Act of 1933, as amended,
whether made before or after the date hereof, except as shall be expressly set
forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
99.1 Press Release from Synaptics Incorporate dated July 20, 2020,
titled "Synaptics to Acquire DisplayLink, Extending Video
Interface Market Leadership"
104 Cover Page Interactive Data File (embedded within the Inline XBRL
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements include, without limitation, statements about the
proposed divestment by the Company of the Business and expectations regarding
the completion thereof. Forward-looking statements involve uncertainties, risks,
assumptions and contingencies, many of which are outside the Company's control
that may cause actual results to differ materially from those described in or
implied by any forward-looking statements. All forward-looking statements are
based on currently available information and speak only as of the date on which
they are made. The Company assumes no obligation to update any forward-looking
statement made in this Current Report that becomes untrue because of subsequent
events, new information or otherwise, except to the extent it is required to do
so in connection with its ongoing requirements under Federal securities laws.
For a further discussion of factors that could cause the Company's future
results to differ materially from any forward-looking statements, see the
section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for
the year ended June 29, 2019 and other risks described in documents filed by the
Company from time to time with the Securities and Exchange Commission.
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