Item 8.01 Other Events.
A complaint has been filed in the
The Company denies that it has violated any laws and believes that the claims asserted in these lawsuits are without merit. The Company believes that the Definitive Proxy Statement contains all material information required to be disclosed and that no supplemental disclosure is required to the Definitive Proxy Statement under any applicable law, rule or regulation. Nevertheless, solely to avoid the possibility of delays to the closing of the merger, and to eliminate the burden and expense of possible litigation, the Company has decided to make the following supplemental disclosures. Nothing in this Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein.
SUPPLEMENT TO DEFINITIVE PROXY STATEMENT
This supplemental information should be read in conjunction with the Definitive Proxy Statement, which should be read in its entirety. Page references in the below disclosures are to pages in the Definitive Proxy Statement, and defined terms used but not defined herein have the meanings set forth in the Definitive Proxy Statement. To the extent the following information differs from or conflicts with the information contained in the Definitive Proxy Statement, the information set forth below shall be deemed to supersede the respective information in the Definitive Proxy Statement. The Company denies any alleged violations of law or any legal or equitable duty. Without admitting in any way and expressly denying that the disclosures below are material or otherwise required by law, the Company makes the following supplemental disclosure solely for the purpose of mooting any alleged disclosure issues asserted in the Complaint.
The following underlined language supplements the sixth paragraph of text on page 77 of the Definitive Proxy Statement under the heading "Background of the Merger":
Throughout August and
The following underlined language supplements the final two paragraphs of text on page 141 of the Definitive Proxy Statement under the heading "Discounted Cash Flow Analysis":
Regal
Evercore performed a discounted cash flow analysis of Regal to calculate the
estimated present value of the standalone unlevered, after-tax free cash flows
that Regal was forecasted to generate during Regal's fiscal years 2021 through
2025 based on the Regal Forecasts. Evercore calculated Regal's standalone
unlevered, after-tax free cash flow by applying Regal's cash tax rate to its
earnings before interest and taxes, adding depreciation and amortization and
deducting capital expenditures, cash restructuring costs and changes in net
working capital. Evercore calculated terminal values for Regal by applying
perpetuity growth rates of 2.00% to 3.50%, which range was selected based on
Evercore's professional judgment and experience, to a terminal year estimate of
the unlevered, after-tax free cash flows that Regal was forecasted to generate
based on the Regal Forecasts. Evercore calculated Regal's standalone unlevered,
after-tax free cash flow in the terminal year to be
Land
Evercore performed a discounted cash flow analysis of Land to calculate the
estimated present value of the standalone unlevered, after-tax free cash flows
that Land was forecasted to generate during Land's fiscal years 2021 through
2025 based on the Rexnord Forecasts. Evercore calculated terminal values for
Land by applying perpetuity growth rates of 2.50% to 4.00%, which range was
selected based on Evercore's professional judgment and experience, to a terminal
year estimate of the unlevered, after-tax free cash flows that Land was
forecasted to generate based on the Rexnord Forecasts. Evercore calculated
Land's standalone unlevered, after-tax free cash flow in the terminal year to be
The following underlined language supplements the final full paragraph of text on page 142 of the Definitive Proxy Statement under the heading "Pro Forma "Has-Gets" Analysis":
Has-Gets
Evercore reviewed the implied aggregate equity value of Regal (pro forma for the
transactions) attributable to Rexnord stockholders on a pro forma basis giving
effect to the merger based on a discounted cash flow analysis. The pro forma
implied equity value attributable to Rexnord stockholders was equal to the
product obtained by multiplying 38.6% (Rexnord stockholders' pro forma ownership
of the combined company immediately following the completion of the merger based
on the exchange ratio, without giving effect to the adjustments to the exchange
ratio contemplated by the Merger Agreement) by an amount equal to the sum of (1)
Land's stand-alone implied aggregate equity value calculated using the
discounted cash flow analysis summarized above (calculated using a discount rate
of 9.5% and a perpetuity growth rate of 3.25%), (2) Regal's stand-alone implied
aggregate equity value calculated using the discounted cash flow analysis
summarized above (calculated using a discount rate of 9.25% and a perpetuity
growth rate of 2.75%), and (3) the net present value as of
Forward-Looking Statements
This communication contains forward-looking statements, within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, which reflect
current estimates, expectations and projections about Regal, Rexnord and the PMC
Business's respective future results, performance, prospects and opportunities.
Such forward-looking statements may include, among other things, statements
about the proposed acquisition of the PMC Business, the benefits and synergies
of the Transactions, future opportunities for Regal, the PMC Business and the
combined company, and any other statements regarding Regal's, Rexnord's, the PMC
Business's or the combined company's respective future operations, anticipated
business levels, future earnings, planned activities, anticipated growth, market
opportunities, strategies, competition and other expectations and estimates for
future periods. Forward-looking statements include statements that are not
historical facts and can be identified by forward-looking words such as
"anticipate," "believe," "could," "estimate," "expect," "intend," "plan," "may,"
"should," "will," "would," "project," "forecast," and similar expressions. These
forward-looking statements are based upon information currently available to
Rexnord and are subject to a number of risks, uncertainties, and other factors
that could cause Regal's, Rexnord's, the PMC Business's or the combined
company's actual results, performance, prospects, or opportunities to differ
materially from those expressed in, or implied by, these forward-looking
statements. Important factors that could cause Regal's, Rexnord's the PMC
Business's or the combined company's actual results to differ materially from
the results referred to in the forward-looking statements Regal or Rexnord makes
in this communication include: the possibility that the conditions to the
consummation of the Transactions will not be satisfied; failure to obtain
shareholder or stockholder approvals being sought in connection with the
Transactions; changes in the extent and characteristics of the common
stockholders of Rexnord and the common shareholders of Regal and its effect
pursuant to the Merger Agreement on the number of shares of Regal common stock
issuable pursuant to the Transactions, magnitude of the dividend payable to
Regal shareholders pursuant to the Transactions and the extent of indebtedness
to be incurred by Regal in connection with the Transactions; the determination
by Regal and Rexnord of the number of "Qualifying Overlap Shareholders" at the
closing of the Transactions; the ability to obtain the anticipated tax treatment
of the Transactions and related transactions; risks relating to any unforeseen
changes to or the effects on liabilities, future capital expenditures, revenue,
expenses, synergies, indebtedness, financial condition, losses and future
prospects; the possibility that Regal may be unable to achieve expected
synergies and operating efficiencies in connection with the Transactions within
the expected time-frames or at all and to successfully integrate the PMC
Business; expected or targeted future financial and operating performance and
results; operating costs, customer loss and business disruption (including,
without limitation, difficulties in maintaining relationships with employees,
customers, clients or suppliers) being greater than expected following the
Transactions; failure to consummate or delay in consummating the Transactions
for other reasons; Regal's ability to retain key executives and employees; risks
associated with litigation related to the Transaction; the continued financial
and operational impacts of and uncertainties relating to the COVID-19 pandemic
on customers and suppliers and the geographies in which they operate;
uncertainties regarding the ability to execute restructuring plans within
expected costs and timing; actions taken by competitors and their ability to
effectively compete in the increasingly competitive global electric motor,
drives and controls, power generation and power transmission industries; the
ability to develop new products based on technological innovation, such as the
Internet of Things, and marketplace acceptance of new and existing products,
including products related to technology not yet adopted or utilized in
geographic locations in which Regal does business; fluctuations in commodity
prices and raw material costs; dependence on significant customers; seasonal
impact on sales of products into HVAC systems and other residential
applications; risks associated with global manufacturing, including risks
associated with public health crises; issues and costs arising from the
integration of acquired companies and businesses and the timing and impact of
purchase accounting adjustments; Regal's overall debt levels and its ability to
repay principal and interest on its outstanding debt, including debt assumed or
incurred in connection with the proposed Transactions; prolonged declines in one
or more markets, such as heating, ventilation, air conditioning, refrigeration,
power generation, oil and gas, unit material handling or water heating; economic
changes in global markets, such as reduced demand for products, currency
exchange rates, inflation rates, interest rates, recession, government policies,
including policy changes affecting taxation, trade, tariffs, immigration,
customs, border actions and the like, and other external factors that Regal
cannot control; product liability and other litigation, or claims by end users,
government agencies or others that products or customers' applications failed to
perform as anticipated, particularly in high volume applications or where such
failures are alleged to be the cause of property or casualty claims;
unanticipated liabilities of acquired businesses; unanticipated adverse effects
or liabilities from business exits or divestitures; unanticipated costs or
expenses that may be incurred related to product warranty issues; dependence on
key suppliers and the potential effects of supply disruptions; infringement of
intellectual property by third parties, challenges to intellectual property, and
claims of infringement on third party technologies; effects on earnings of any
significant impairment of goodwill or intangible assets; losses from failures,
breaches, attacks or disclosures involving information technology infrastructure
and data; cyclical downturns affecting the global market for capital goods;
changes in the method of determining London Interbank Offered Rate ("LIBOR"), or
the replacement of LIBOR with an alternative reference rate; and other risks and
uncertainties including, but not limited, to those described in the section
entitled "Risk Factors" in Regal's or Rexnord's respective Annual Reports on
Form 10-K on file with the
Additional Information about the Proposed Transaction and Where to Find It
In connection with the Transaction, Regal Beloit has filed with the
Participants in the Solicitation
This communication is not a solicitation of a proxy from any security holder.
Rexnord, Regal Beloit and their respective directors, executive officers, other
members of management and employees may be deemed to be participants in the
solicitation of proxies from Rexnord's stockholders in connection with the
Transaction. Information regarding the names and interests in the proposed
transaction of Rexnord's directors and officers is contained Rexnord's filings
with the
No Offer or Solicitation
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
© Edgar Online, source