Item 1.01 Entry into a Material Definitive Agreement.
On October 12, 2020 (the "Agreement Date"), Twilio Inc. ("Twilio") entered into
an Agreement and Plan of Reorganization (the "Merger Agreement") with Scorpio
Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Twilio
("Merger Sub"), Segment.io, Inc., a Delaware corporation (the "Company"), and
Shareholder Representative Services LLC, a Colorado limited liability company,
solely in its capacity as the representative of certain Company securityholders.
Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and
into the Company (the "Merger"), and upon consummation of the Merger, Merger Sub
will cease to exist and the Company will become a wholly owned subsidiary of
Twilio.
Upon consummation of the transactions contemplated by the Merger Agreement (the
"Closing"), all outstanding shares of Company capital stock, restricted stock
units representing the right to receive Company capital stock, options to
purchase Company capital stock and warrants to purchase Company capital stock
will be cancelled in exchange for aggregate consideration of $3,200,000,000,
subject to certain adjustments, in the form of shares of Class A Common Stock of
Twilio, par value $0.001 per share ("Twilio Class A Common Stock") (the "Stock
Consideration"); provided, that (a) shares of Company capital stock held by
unaccredited stockholders, vested restricted stock units representing the right
to receive Company capital stock, and vested options to purchase Company capital
stock will receive cash in lieu of the Stock Consideration, (b) unvested options
to purchase Company capital stock and unvested restricted stock units
representing the right to receive Company capital stock, in each case, held by
employees of the Company who remain or become employees of Twilio or any of its
subsidiaries following the Closing will be assumed by Twilio or substituted with
a corresponding unvested stock option of Twilio to purchase shares of Twilio
Class A Common Stock or a corresponding unvested restricted stock unit
representing the right to receive Twilio capital stock, as the case may be, and
(c) all unvested restricted stock units representing the right to receive
Company capital stock and all unvested options to purchase Company capital
stock, in each case, held by any former employees, will be cancelled for no
consideration. The number of shares to be issued in connection with the Stock
Consideration will be calculated based on a fixed value of $277.1920 per share,
which is the average of the daily volume-weighted average sales price per share
of Twilio Class A Common Stock on the New York Stock Exchange, as such daily
volume-weighted average sales price per share is reported by Bloomberg L.P.,
calculated to four decimal places and determined without regard to after-hours
trading or any other trading outside the regular trading session trading hours,
for each of the ten consecutive trading days ending on and including the trading
day immediately preceding the Agreement Date. In addition, Twilio will establish
a retention pool in an aggregate amount of $50,000,000 in the form of restricted
stock units covering shares of Twilio Class A Common Stock that will be granted
to certain Company employees in accordance with the terms of the Merger
Agreement.
The Merger Agreement contains customary representations, warranties and
covenants by Twilio and the Company. A portion of the aggregate consideration
will be held in escrow to secure the indemnification obligations of the Company
securityholders. The Closing is subject to customary closing conditions,
including regulatory approvals, and is expected to occur in 2020. Under the
terms of the Merger Agreement, Twilio has agreed to file a Resale Registration
Statement on Form S-3 covering the resale of the shares of Twilio Class A Common
Stock to be issued to eligible Company securityholders (the "Resale Registration
Statement").
Either Twilio or the Company may terminate the Merger Agreement if the Closing
has not occurred on or before January 15, 2021, (which shall be extended for an
additional 90 days if, as of January 15, 2021, all closing conditions have been
completed except for the receipt of certain regulatory approvals).
Twilio intends to issue the shares of Twilio Class A Common Stock described
herein in reliance upon the exemptions from registration afforded by
Section 4(a)(2) and Rule 506 promulgated under the Securities Act of 1933, as
amended.
The foregoing summary of the Merger Agreement and the transactions contemplated
thereby do not purport to be complete and is subject to, and qualified in its
entirety by, the full text of the Merger Agreement, which will be filed as an
exhibit on the earlier to be filed following the Closing of (i) Twilio's
Quarterly Report on Form 10-Q for the quarter ending September 30, 2020 and
(ii) the Resale Registration Statement.
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Forward Looking Statements
This Current Report on Form 8-K may be deemed to contain forward-looking
statements, which are subject to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, including the expected completion of
the transactions contemplated by the Merger Agreement and the time frame in
which this will occur. Statements regarding future events are based on the
parties' current expectations and are necessarily subject to associated risks
related to, among other things, regulatory approval of the acquisition of the
Company or that other conditions to the Closing may not be satisfied, the
potential impact on the business of the Company due to the announcement of the
acquisition, the occurrence of any event, change or other circumstances that
could give rise to the termination of the Merger Agreement, and general economic
conditions. Therefore, actual results may differ materially and adversely from
those expressed in any forward-looking statements. For information regarding
other related risks, see the "Risk Factors" section of Twilio's most recent
annual reports on Form 10-K and quarterly reports on Form 10-Q. The
forward-looking statements included herein are made only as of the date hereof,
and Twilio undertakes no obligation to revise or update any forward-looking
statements for any reason.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 3.02.
Item 8.01 Other Events.
On October 12, 2020, Twilio issued a press release announcing that it had
entered into the Merger Agreement. The press release is furnished herewith as
Exhibit 99.1.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Exhibit Description
99.1 Press Release, dated October 12, 2020
104 Cover Page Interactive Data File (formatted as inline XBRL and
contained in Exhibit 1.01)
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