Item 1.01 – Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
“Company”), entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with
company (“Purchaser”), and
company and a wholly owned subsidiary of Purchaser (“Merger Sub”), providing for
the merger of the Company with and into Merger Sub (the “Merger”), with Merger
Sub surviving the Merger.
A special committee consisting solely of independent and disinterested members
of the Company’s Board of Directors (the “Special Committee”) unanimously
determined that the transactions contemplated by the Merger Agreement, including
the Merger, were fair to and in the best interests of the Company and the
holders of its Class A common stock, par value
Share”), and unanimously recommended that the Board of Directors of the Company
(the “Board”) approve the Merger Agreement and that the Company’s stockholders
vote for the adoption of the Merger Agreement. Based on the Special Committee’s
recommendation, the Board determined that the transactions contemplated by the
Merger Agreement, including the Merger, were fair to and in the best interests
of the Company and the holders of its Class A Shares, and approved the Merger
Agreement and resolved to recommend that the Company’s stockholders vote for the
adoption of the Merger Agreement.
At the effective time of the Merger (“Effective Time”), (1) each Class A Share
issued and outstanding immediately prior to the Effective Time, other than
certain excluded shares, will be converted into the right to receive
cash, without interest (the “Merger Consideration”) and (2) each share of the
Company’s Class B common stock, par value
Share
automatically cancelled and the holders thereof will not be entitled to receive
the Merger Consideration.
Pursuant to the Merger Agreement, as of the Effective Time, (1) each stock
option to purchase a Class A Share outstanding immediately prior to the
Effective Time will fully vest and be converted into the right to receive the
excess, if any, of the Merger Consideration over the per share exercise price,
(2) each restricted Class A Share held by a non-employee director outstanding
immediately prior to the Effective Time will fully vest and be entitled to
receive the Merger Consideration, (3) each other restricted Class A Share that
is outstanding immediately prior to the Effective Time will be converted into an
economically equivalent award in the surviving corporation on substantially the
same terms and conditions as such restricted share, (4) each phantom share
corresponding to a Class A Share outstanding immediately prior to the Effective
Time will be converted into a phantom share of the surviving corporation
corresponding to its Class B units, with the same economic value and
substantially the same terms and conditions as such phantom shares and (5) each
deferred stock unit corresponding to a Class A Share held by a non-employee
director will vest (to the extent unvested) and will be converted into the right
to receive the Merger Consideration, with settlement to occur in accordance with
the original election of such director.
Stockholders of the Company will be asked to vote on the adoption of the Merger
Agreement at a special stockholders’ meeting that will be held on a date to be
announced. The closing of the Merger is subject to the adoption of the Merger
Agreement by the affirmative vote of the holders of (1) a majority of the total
number of votes of Company common stock outstanding and (2) a majority of the
outstanding Class A Shares not owned, directly or indirectly, by Purchaser,
Merger Sub or any holder of Class
Stockholder Approvals”). Consummation of the Merger is also subject to certain
other customary conditions, including the absence of any law, injunction or
similar
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order that prohibits or makes illegal the consummation of the Merger; the
expiration or early termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; and receipt of
the
term as defined in the Merger Agreement). Each party’s obligation to consummate
the Merger is also subject to the accuracy of the other party’s representations
and warranties contained in the Merger Agreement (subject to certain materiality
standards) and the other party’s compliance with its covenants and agreements
contained in the Merger Agreement in all material respects. Purchaser’s
obligation to consummate the Merger is further subject to the absence of any
effect that, individually or in the aggregate, has had a Company Material
Adverse Effect (as defined in the Merger Agreement) that is continuing in effect
or is reasonably likely to result in a Company Material Adverse Effect.
The Merger Agreement contains representations warranties of both parties and
covenants of the parties relating to certain matters, including with respect to
obtaining the Financing (as defined below) and seeking required governmental
consents and approvals. In addition, during the period from the signing of the
Merger Agreement to the Effective Time, the Company is subject to customary
restrictions on its and its representatives’ ability to initiate, solicit or
knowingly encourage alternative acquisition proposals from third parties,
subject to customary exceptions. Under the Merger Agreement, the Company Board
agreed, subject to customary exceptions, to recommend that its stockholders vote
for the adoption of the Merger Agreement.
The Merger Agreement contains certain termination rights for the Company and
Purchaser, including if the Merger is not consummated by
Purchaser will be required to pay the Company a termination fee of
the Merger Agreement is terminated under certain circumstances relating to
Purchaser’s failure to complete the Merger. The Merger Agreement provides that
the termination fee would be used to fund a dividend to the holders of the
Class A Shares.
In connection with entering into the Merger Agreement, Purchaser obtained debt
financing via a debt commitment letter (the “Commitment Letter”), dated as of
to which, among other things, the
Purchaser with a term loan facility in an aggregate principal amount of
forth in the Commitment Letter. The proceeds of the Financing will be used,
among other things, to finance payment of the consideration payable in
connection with the Merger, pay fees and expenses in connection with the
transactions related thereto and for working capital and other general corporate
purposes. The consummation of the Merger is not conditioned upon the Financing.
The Company does not intend to declare any future quarterly dividends on its
common stock during the pendency of the Merger Agreement.
The foregoing description of the Merger Agreement and the transactions
contemplated thereby does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the Merger Agreement, which is
filed as Exhibit 2.1 hereto and incorporated herein by this reference. The
Merger Agreement has been attached to provide investors with information
regarding its terms. It is not intended to provide any other factual information
about the Company, Purchaser, or Merger Sub. In particular, the assertions
embodied in the representations and warranties contained in the Merger Agreement
are qualified by information in confidential disclosure letters provided by each
of the Company and Purchaser to each other in connection with the signing of the
Merger Agreement or in filings by the Company with the
and Exchange Commission
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contain information that modifies, qualifies and creates exceptions to the
representations and warranties and certain covenants set forth in the Merger
Agreement. Moreover, the representations and warranties in the Merger Agreement
were used for the purposes of allocating risk between the Company and Purchaser
rather than establishing matters of fact. Accordingly, the representations and
warranties in the Merger Agreement should not be relied on as characterization
of the actual state of facts about the Company, Purchaser or Merger Sub.
Voting Agreement
Concurrently with the execution and delivery of the Merger Agreement, certain
members of the Company’s management team (the “Management Stockholders”) entered
into a Voting Agreement with the Company (the “Voting Agreement”). Pursuant to
the Voting Agreement, the Management Stockholders have agreed to vote all shares
of Company Common Stock owned by them in favor of the adoption of the Merger
Agreement and the approval of the transactions contemplated thereby and against
certain actions that would prevent, interfere with or delay the consummation of
the Merger. As a result of the Voting Agreement, all outstanding Class
total number of votes of Company common stock outstanding will be voted to
approve the adoption of the Merger Agreement. The Voting Agreement terminates
upon the earlier of the Effective Time and the termination of the Merger
Agreement in accordance with its terms.
The foregoing description of the Voting Agreement does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of
the Voting Agreement, which is filed as Exhibit 10.1 hereto and is incorporated
herein by this reference. The Voting Agreement has been attached to provide
investors with information regarding its terms. It is not intended to provide
any other factual information about the Company or the Management Stockholders.
Moreover, the representations and warranties in the Voting Agreement were used
for the purposes of allocating risk between the Company and the Management
Stockholders rather than establishing matters of fact. Accordingly, the
representations and warranties in the Voting Agreement should not be relied on
as characterization of the actual state of facts about the Company or any of the
Management Stockholders.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Document 2.1* Agreement and Plan of Merger, dated as ofJuly 26, 2022 , by and amongPzena Investment Management, Inc. ,Pzena Investment Management, LLC andPanda Merger Sub, LLC . 10.1 Voting Agreement, dated as ofJuly 26, 2022 , by and amongPzena Investment Management, Inc. and each of the persons set forth on the signature pages thereto. 10.2 Senior Credit Facility Commitment Letter, dated as ofJuly 26, 2022 , by and between,JPMorgan Chase Bank, N.A . andPzena Investment Management, LLC . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Schedules omitted pursuant to Item 601(a)(5) of Regulation S-K.
agrees to furnish supplementally a copy of any omitted schedule to the
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Forward-Looking Statements
Certain statements and information contained in this communication may be
considered “forward-looking statements,” such as statements relating to
management’s views with respect to future events and financial performance.
Words or phrases such as “anticipate,” “believe,” “continue,” “ongoing,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project”
or similar words or phrases, or the negatives of those words or phrases, may
identify forward-looking statements, but the absence of these words does not
necessarily mean that a statement is not forward-looking. Such forward-looking
statements are subject to risks, uncertainties and other factors that could
cause actual results to differ materially from historical experience or from
future results expressed or implied by such forward-looking statements.
Potential risks and uncertainties include, but are not limited to, economic
conditions in the markets in which Pzena operates; new federal or state
governmental regulations; Pzena’s ability to effectively operate, integrate and
leverage any past or future strategic initiatives; statements regarding the
merger and related matters; the ability to meet expectations regarding the
timing and completion of the merger; the occurrence of any event, change or
other circumstance that could give rise to the termination of the merger
agreement; the failure to obtain Pzena stockholder approval of the transaction
or the failure to satisfy any of the other conditions to the completion of the
transaction; risks relating to the financing required to complete the
transaction; the effect of the announcement of the transaction on the ability of
Pzena to retain and hire key personnel and maintain relationships with its
customers, vendors and others with whom it does business, or on its operating
results and businesses generally; risks associated with the disruption of
management’s attention from ongoing business operations due to the transaction;
significant transaction costs, fees, expenses and charges; the risk of
litigation and/or regulatory actions related to the transaction; and other
factors detailed in Pzena’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission
http://www.sec.gov and on Pzena’s website at investors.pzena.com.
Additional Information and Where to Find It
In connection with the proposed merger transaction, Pzena will file with the
and furnish to Pzena’s stockholders a proxy statement and other relevant
documents. This communication does not constitute a solicitation of any vote or
approval. Pzena stockholders are urged to read the proxy statement when it
becomes available and any other documents to be filed with the
with the proposed merger or incorporated by reference in the proxy statement
because they will contain important information about the proposed merger.
Investors will be able to obtain a free copy of documents filed with the
the
free copy of the Company’s filings with the
Pzena’s website at https://www.pzena.com or by directing a request to:
Investment Management, Inc.
(212) 355-1600, [email protected].
Participants in the Solicitation
Pzena, its directors and certain of its officers and employees, may be deemed to
be participants in the solicitation of proxies from Pzena stockholders in
connection with the proposed transaction. Information about the Company’s
directors and executive officers is set forth in the Company’s definitive proxy
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statement for its 2022 annual meeting of stockholders filed with the
directors and executive officers have changed since the amounts set forth in the
proxy statement for its 2021 annual meeting of stockholders, such changes have
been or will be reflected on Statements of Change in Ownership on Form 4 filed
with the
site at www.sec.gov and on the Investor Relations page of Pzena’s website
located at https://investors.pzena.com. Additional information regarding the
interests of participants in the solicitation of proxies in connection with the
proposed merger will be included in the proxy statement and other relevant
materials Pzena may file with the
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