Item 1.01.
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Entry into a Material Definitive Agreement.
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On September 16, 2016, Infoblox Inc., a
Delaware corporation (the
Company
or
Infoblox
), entered into an Agreement and Plan of Merger (the
Merger Agreement
) with Delta Holdco, LLC, a Delaware limited liability company
(
Parent
), and India Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (
Merger Sub
). The Merger Agreement provides for the acquisition of the Company by Parent in a two-step all
cash transaction, consisting of a tender offer, followed immediately by a merger (the
Merger
).
The Merger Agreement
was approved by all members of the Companys Board of Directors (the
Board
).
Pursuant to the Merger Agreement,
and upon the terms and subject to the conditions described therein, Parent will cause Merger Sub to commence a tender offer (the
Offer
) for all of the Companys outstanding shares of common stock, par value $0.0001 per share
(the
Shares
), at a purchase price of $26.50 per Share, net to the seller in cash, without interest, subject to any required withholding of taxes (the
Offer Price
).
The Offer will initially remain open for 20 business days from the date of commencement of the Offer. If at the scheduled expiration time of
the Offer any of the conditions to the Offer have not been satisfied or waived, Merger Sub may, and if requested by the Company, will, extend and re-extend the expiration time of the Offer (the
Expiration Time
) to permit the
satisfaction of all Offer conditions, subject to certain specified circumstances in the Merger Agreement.
The obligation of Merger Sub to
purchase Shares tendered in the Offer is subject to customary closing conditions, including among others: (1) Shares having been validly tendered and received and not validly withdrawn prior to the Expiration Time that, when added to the Shares, if
any, owned by Merger Sub or its affiliates, represent in the aggregate at least one share more than 50% of the Shares outstanding (the
Minimum Condition
), (2) any waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, applicable to the transactions having expired and, all clearances and authorizations required by the antitrust laws of Germany having been obtained, (3) the absence of any restraint, injunction or prohibited by any order of
competent jurisdiction or any other governmental authority of competent jurisdiction and the absence of any legal proceeding or law promulgated or deemed applicable to the transactions by any governmental authority of competent jurisdiction which
prevents the consummation of the Offer or the Merger, (4) the accuracy of the Companys representations and warranties contained in the Merger Agreement (subject to customary Company Material Adverse Effects (as defined in the Merger Agreement)
and materiality qualifiers), (5) the Companys performance of its obligations under the Merger Agreement in all material respects prior to the Expiration Time, (6) the absence, since the date of the Merger Agreement, of any Company Material
Adverse Effect that is continuing, (7) the completion of a specified marketing period for the debt financing (the
Marketing Period
) Parent and Merger Sub are using to fund a portion of the aggregate Offer Price to be paid to
tendering holders upon closing the Offer and to certain other holders upon closing the Merger (the
Merger Consideration
) and (8) the receipt of the proceeds of the debt financing by Parent or irrevocable confirmation by lenders to
Parent in writing that the debt financing will be funded and available if the equity financing is funded. Subject to certain rights of Merger Sub to extend the Expiration Time, the Merger Agreement provides that if the condition set forth in clause
(8) is not satisfied and all other conditions are satisfied at the Expiration Time, the Company will be entitled to terminate the Merger Agreement and Parent will be required to pay the Company a reverse termination fee of $101.31 million. In
addition, the Merger Agreement provides the Company with rights to cause Parent to enforce its rights under the debt financing commitments described below.
Following the consummation of the Offer, subject to the satisfaction or waiver of certain customary conditions set forth in the Merger
Agreement, Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the
Merger
), pursuant to the procedure provided for under by Section 251(h) of the General Corporation
Law of the State of Delaware (
DGCL
), without a meeting or vote of the Companys stockholders. The Merger will be effected as soon as practicable following the acceptance of the Shares validly tendered and not validly
withdrawn in the Offer (the
Offer Acceptance Time
).
At the effective time of the Merger (the Effective Time), each issued and outstanding
Share (other than Shares irrevocably accepted for purchase pursuant to the Offer, Shares owned by the Company as treasury stock immediately prior to the Effective Time and Shares owned by a holder who has properly demanded appraisal) will
automatically be converted into the right to receive the Merger Consideration. In addition, at the Effective Time, (i) all options to purchase the Companys common stock that are outstanding, whether vested or unvested, will be cancelled and
automatically converted into the right to receive, in exchange for the cancellation of such options, an amount in cash equal to the product of (x) the aggregate number of shares of the Companys common stock subject to such option multiplied by
(y) the excess, if any of the Offer Price, less the per share exercise price of such option, (ii) all of the Companys outstanding restricted stock units and vested market stock units that, in each case, are vested but unsettled at the
Effective Time, will be cancelled and automatically converted into the right to receive the Offer Price, and (iii) all of the Companys outstanding unvested restricted stock units and all of the Companys outstanding and unvested
market stock units that, in the case of the market stock units, will be deemed earned pursuant to the performance conditions upon the Effective Time based on the terms of the applicable award agreements, will be cancelled and replaced with a right
to receive the Offer Price in cash, with payment with respect to 50% of such unvested restricted stock units and unvested market stock units that are deemed earned pursuant to the performance conditions to be accelerated and made promptly following
the Effective Time and the remaining right to receive the Offer Price to be subsequently paid on the dates the Companys unvested restricted stock units and unvested market stock units would have otherwise been scheduled to vest, subject to the
continued service or qualified termination of the holder of such award. Any outstanding and unvested market stock units that are not deemed earned pursuant to the performance conditions upon the Effective Time shall be forfeited for no
consideration. The determination of which restricted stock units and market stock units will be converted into vested awards to be paid out at closing will be based on the relative vesting dates of the applicable awards held by each holder, with
awards with the shortest remaining vesting periods to be first accelerated.
The Merger Agreement contains representations and warranties
and covenants of the parties customary for a transaction of this nature, including an agreement that, subject to certain exceptions, the parties will use reasonable best efforts to cause the Offer and the Merger to be consummated. Until the earlier
of the termination of the Merger Agreement and the Effective Time, the Company has agreed to operate its business in the ordinary course of business in all material respects and has agreed to certain other customary restrictions on its operations,
as set forth more fully in the Merger Agreement.
During the period beginning on the date of the Merger Agreement and ending at 11:59 pm
on September 30, 2016 (the
Go-Shop Period
), the Company may engage in discussions or negotiations with third parties who have made a written acquisition proposal to the Company between August 1, 2016 and date of the
Merger Agreement (such third parties, an
Excluded Party
). After the Go-Shop Period, the Company will become subject to customary no-shop restrictions on its ability to solicit alternative acquisition proposals from
third parties and to provide non-public information to and engage in discussions or negotiations with third parties regarding alternative acquisition proposals.
Notwithstanding the no-shop restrictions, prior to the Offer Acceptance Time, the Company may under certain circumstances provide
information to and participate in discussions or negotiations with third parties with respect to any unsolicited alternative acquisition proposal that the Board has determined constitutes or would reasonably be expected to result in a Superior
Proposal. A
Superior Proposal
is a bona fide written acquisition proposal, not solicited in violation of the no-shop restrictions, that the Board (or any committee or subcommittee thereof) determines in its good faith
judgment (1) would be more favorable to the Companys stockholders (other than Parent and its subsidiaries) from a financial point of view than the Offer and the Merger and (2) is reasonably capable of being completed in accordance with its
terms, taking into account all financial, regulatory, legal and other aspects of the proposal, including certainty of closing and the identity in case of the person making the acquisition proposal.
Prior to the Offer Acceptance Time, the Board may, among other things, (1) withdraw or change its recommendation that the Companys
stockholders tender their Shares in the Offer or (2) terminate the Merger Agreement to enter into a definitive acquisition agreement providing for a Superior Proposal, subject to complying with notice and other specified conditions, including giving
Parent the opportunity to propose revisions to the terms of the Merger Agreement during a period following notice.
The Merger Agreement
contains certain termination rights for the Company and Parent, including, among others, the right of (1) the Company to terminate the Merger Agreement in order to enter into a definitive acquisition agreement providing for a Superior Proposal, (2)
Parent to terminate the Merger Agreement as a result of the Board changing its recommendation to the Companys stockholders with respect to the Offer and (3) the Company to terminate the Merger Agreement if the conditions have been satisfied
(other than Parents receipt of financing proceeds from its lenders) and Parent does not consummate the closing within three business days of the time the closing would otherwise occur, subject to certain rights of Merger Sub to extend the
Expiration Time.
Upon termination of the Merger Agreement under specified circumstances, the Company will be
required to pay Parent a termination fee. Generally, if the termination fee becomes payable as a result of the Company terminating the Merger Agreement in order to enter into a definitive acquisition agreement providing for a Superior Proposal
received during the Go-Shop Period with an Excluded Party, the amount of the termination fee will be $19.483 million. If the termination fee becomes payable in certain other circumstances, the amount of the termination fee will be $42.862 million.
If the Merger Agreement is terminated as a result of an intentional breach by the Company, the Company will be required to reimburse Parent for up to $5 million of its actual and reasonable expenses.
The Merger Agreement also provides that Parent will be required to pay the Company a reverse termination fee of $101.31 million in the event
that the Company terminates the Merger Agreement because of Parents intentional breach of the Merger Agreement or because Parent, after satisfaction of the Offer conditions (other than the receipt of funding proceeds from its lenders) and the
completion of the Marketing Period, has not accepted for payment the Shares tendered in the Offer within three business days following the expiration of the Offer, subject to certain rights of Merger Sub to extend the Expiration Time. Payment of the
reverse termination fee constitutes the Companys sole and exclusive monetary remedy and is guaranteed by Vista Equity Partners Fund VI, L.P. (the
Sponsor
) pursuant to the terms of a limited guarantee.
Parent has obtained debt financing commitments from Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bank of America, N.A. and
equity financing commitments from the Sponsor, in each case to fund the transactions contemplated by the Merger Agreement. The Merger Agreement requires Parent to use its reasonable best efforts to obtain the financing on the terms and
conditions described in the financing commitments. The Company is entitled to specific performance to force Parent to cause the equity financing to be funded if the Marketing Period (as defined in the Merger Agreement) has been completed, the
conditions (to the Offer and the Merger are satisfied or waived and the debt financing proceeds have been funded or will be funded if the equity financing is funded (or the lenders have irrevocably confirmed to Parent in writing that the debt
financing will be funded and available at the closing of the Offer if the equity financing is funded).
The representations and warranties
of the Company contained in the Merger Agreement have been made solely for the benefit of Parent and Merger Sub. In addition, such representations and warranties (a) have been made only for purposes of the Merger Agreement, (b) have been qualified
by documents filed with, or furnished to, the Securities and Exchange Commission (the
SEC
) by the Company prior to the date of the Merger Agreement, (c) have been qualified by confidential disclosures made to Parent and Merger Sub
in connection with the Merger Agreement, (d) are subject to materiality qualifications contained in the Merger Agreement which may differ from what may be viewed as material by investors, (e) were made only as of the date of the Merger Agreement or
such other date as is specified in the Merger Agreement and (f) have been included in the Merger Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as facts. Accordingly, the Merger
Agreement is included with this filing only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding the Company or its subsidiaries or business.
Investors should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or business. Moreover, information concerning the
subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Companys public disclosures. The Merger Agreement should not be read
alone, but should instead be read in conjunction with the other information regarding the Company that has been, is or will be contained in, or incorporated by reference into, the Forms 10-K, Forms 10-Q, Forms 8-K, proxy statements
and other documents that the Company files with the SEC.
The foregoing description of the Merger Agreement is not complete and is
qualified in its entirety by reference to the Merger Agreement, which is filed as
Exhibit 2.1
hereto and is incorporated herein by reference.