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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Perspecta Inc | NYSE:PRSP | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 29.34 | 0 | 00:00:00 |
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Perspecta Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Sincerely,
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John M. Curtis
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President and Chief Executive Officer, and Chairman of the Board of Directors
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To consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of January 27, 2021, as amended from time to time, which we refer to as the Merger Agreement, by and among (i) the Company, (ii) Jaguar ParentCo Inc., which we refer to as Parent, and (iii) Jaguar Merger Sub Inc., a wholly owned subsidiary of Parent, which we refer to as Merger Sub, pursuant to which Merger Sub will merge with and into the Company, which we refer to as the Merger, with the Company surviving the Merger, which we refer to as the Merger Agreement Proposal. Parent and Merger Sub are beneficially owned by affiliates of The Veritas Capital Fund V, L.P. and The Veritas Capital Fund VII, L.P., which we refer to as Veritas. A copy of the Merger Agreement is attached as Annex A to the accompanying proxy statement.
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To approve, by non-binding, advisory vote, certain compensation arrangements for the Company’s named executive officers in connection with the Merger, which we refer to as the Golden Parachute Proposal.
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To consider and vote on one or more proposals to adjourn the Special Meeting, if necessary or appropriate, including adjournments to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the Merger Agreement Proposal, which we refer to as the Adjournment Proposal.
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To transact any other business that may properly come before the Special Meeting, or any adjournment or postponement of the Special Meeting, by or at the direction of the Company’s board of directors, which we refer to as the Board.
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By Order of the Board of Directors,
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James L. Gallagher
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Senior Vice President, General Counsel and Secretary
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Background of the Merger. A description of the background of the Merger, including our discussions with Veritas, is included in “Special Factors — Background of the Merger.”
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Recommendation of the Board; Fairness of the Merger. The Board, pursuant to resolutions adopted (with Mr. Musallam, who is affiliated with Veritas, recused) at a meeting of the Board held on January 26, 2021, has unanimously (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were fair to, and in the best interests of, the Company’s stockholders, (ii) approved the Merger Agreement and the other transactions contemplated by the Merger Agreement and (iii) directed that the Merger Agreement be submitted to the holders of Shares for their approval and resolved to recommend that the holders of Shares approve the Merger Agreement and the other transactions contemplated by the Merger Agreement. In evaluating the Merger, the Board consulted with the Company’s management and legal and financial advisors and considered various material factors. For a description of the material factors considered by the Board in deciding to recommend approval of the proposal to adopt the Merger Agreement, see “Special Factors — Recommendation of the Board; Fairness of the Merger.”
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Position of the Sponsor Entities as to the Fairness of the Merger. Under the SEC rules governing “going private” transactions, the Sponsor Entities are affiliates of the Company and engaged in a “going private” transaction and, therefore, are required to express its beliefs as to the fairness of the Merger to the Company’s unaffiliated security holders. For a description of the Sponsor Entities’ beliefs as to the fairness of the Merger to the Company’s unaffiliated security holders, see “Special Factors—Position of the Sponsor Entities as to the Fairness of the Merger.”
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Opinion of Goldman Sachs. Goldman Sachs & Co. LLC (“Goldman Sachs”) delivered its opinion to the Board that, as of January 27, 2021 and based upon and subject to the factors and assumptions set forth therein, the $29.35 in cash per share of the Company’s common stock to be paid to the holders (other than Parent, Veritas Capital Fund Management L.L.C., an affiliate of a significant shareholder of the Company and an affiliate of Parent (“Veritas Capital”) and their respective affiliates) of shares of the Company’s common stock pursuant to the Merger Agreement was fair from a financial point of view to such holders. The full text of the written opinion of Goldman Sachs, dated January 27,
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Opinion of Stone Key. In connection with the Merger and pursuant to an engagement letter dated January 25, 2021, Perspecta retained Stone Key Partners LLC (“Stone Key”) to act as its financial advisor with respect to any transaction or series of related transactions whereby, directly or indirectly, all or a majority of the equity interests or assets of Perspecta are transferred. In selecting Stone Key, the Board considered, among other things, the fact that Stone Key is an internationally recognized investment banking firm with substantial experience advising companies in the government technology services industry as well as substantial experience providing strategic advisory services. Stone Key, as part of its investment banking business, is continuously engaged in the evaluation of businesses and their debt and equity securities in connection with mergers and acquisitions, valuations and general corporate advisory services. At the January 26, 2021 meeting of the Board, Stone Key delivered its oral opinion, which was subsequently confirmed in writing, that, as of January 26, 2021, and based upon and subject to the assumptions, qualifications and limitations set forth in the written opinion, the Merger Consideration was fair, from a financial point of view, to the holders of the outstanding shares of Perspecta common stock, excluding Parent, Merger Sub and their respective affiliates. The full text of Stone Key’s written opinion is attached as Annex C to this proxy statement and you should read the opinion carefully and in its entirety. The opinion sets forth the assumptions made, some of the matters considered and qualifications to and limitations of the review undertaken by Stone Key. The Stone Key opinion, which was authorized for issuance by the Fairness Opinion and Valuation Committee of Stone Key, is subject to the assumptions and conditions contained in the opinion and is necessarily based on economic, market and other conditions and the information made available to Stone Key as of the date of the Stone Key opinion. Stone Key has no responsibility for updating or revising its opinion based on circumstances or events occurring after the date of the rendering of the opinion. For a further discussion of Stone Key’s opinion, see “Special Factors — Opinions of Perspecta’s Financial Advisors — Opinion of Stone Key”.
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Purpose and Reasons of the Company for the Merger. The Company’s purpose for engaging in the Merger is to enable its stockholders to receive the Merger Consideration, which represents a premium of (i) 49.7% over the closing price of the Shares on November 6, 2020, the last trading day before the first public reports of a potential strategic process for the Company, and (ii) 11.8% over the closing price of the Shares on January 26, 2021, the last trading day before the announcement of the Merger.
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Purpose and Reasons of the Sponsor Entities for the Merger. Under the SEC rules governing “going private” transactions, the Sponsor Entities are affiliates of the Company and engaged in a “going private” transaction and, therefore, are required to express its purposes and reasons for the Transactions to the Company’s unaffiliated security holders. For a description of the Sponsor Entities’ purposes and reasons for the Transactions to the Company’s unaffiliated security holders, see “Special Factors—Purpose and Reasons of the Sponsor Entities for the Merger.”
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Certain Effects of the Merger. At the effective time of the Merger, each Share outstanding immediately prior to the effective time of the Merger (other than (i) the Shares owned by the Company or any of the Company subsidiaries and (ii) the Shares owned by Parent, Merger Sub or any of their respective wholly owned subsidiaries) will be converted into the right to receive the Merger Consideration, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Merger Agreement, whereupon all such Shares will cease to be outstanding and will be
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Treatment of Stock Options and Other Equity-Based Awards. Upon completion of the Merger:
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Interests of Executive Officers and Directors of the Company in the Merger. In considering the recommendations of the Board (with Mr. Musallam recused) with respect to the Merger, the Company’s stockholders should be aware that the executive officers and directors have certain interests in the Merger that may be different from, or in addition to, the interests of the Company’s stockholders generally. The Board was aware of these interests and considered them, among other matters, in making its recommendations. These interests include the following:
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the accelerated vesting and payment of awards of Company RSUs, Company PSUs and the Company’s Director RSUs;
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certain severance and other separation benefits that may be payable following termination of employment after the effective time of the Merger under the Company’s severance plan; and
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the provision of indemnification and insurance arrangements pursuant to the Merger Agreement.
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Intent to Vote in Favor of the Merger. Our directors and executive officers have informed us that, as of the date of this proxy statement, they intend to vote all of the Shares owned directly by them in favor of the adoption of the Merger Agreement and each of the other proposals. As of March 18, 2021, the Record Date for the Special Meeting, our directors and executive officers directly owned, in the aggregate, 23,568,558 Shares entitled to vote at the Special Meeting, or collectively approximately 14.62% of the outstanding Shares entitled to vote at the Special Meeting.
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Material U.S. Federal Income Tax Consequences of the Merger. The exchange of the Shares for cash in the Merger will be a taxable transaction to U.S. Holders (as defined below in “Special Factors — Material U.S. Federal Income Tax Consequences of the Merger”) for U.S. federal income tax purposes. A U.S. Holder will generally recognize gain or loss in an amount equal to the difference, if any, between the cash received by such holder in the Merger and the adjusted tax basis in the Shares
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Financing of the Merger. The Merger is not subject to any financing condition. Parent estimates that the total amount of funds necessary to complete the Merger and the related transactions will be approximately $7,267 million. Parent expects this amount to be funded through a combination of the following:
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up to approximately $4,825 million from the new secured credit facilities described under “Special Factors — Financing of the Merger,” and
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up to approximately $2,470 million from equity investments by Veritas Fund VII described under “Special Factors — Financing of the Merger.”
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Limited Guarantee. Concurrently with the execution of the Merger Agreement, Parent has delivered to the Company a limited guarantee, dated as of the date of January 27, 2021 (the “Limited Guarantee”), entered into by Veritas Fund VII (for purposes of the Limited Guarantee, the “Guarantor”) in favor of the Company. Pursuant to the terms of the Limited Guarantee and subject to the terms and conditions set forth therein, the Guarantor has agreed to guarantee Parent’s and Merger Sub’s obligations under the Merger Agreement, capped at $252,534,936, with respect to payment of the Parent Termination Fee (as defined in the Merger Agreement) and certain reimbursement obligations of Parent.
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Regulatory Approvals. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder, which we refer to collectively as the HSR Act, certain transactions, including the Merger, may not be completed until notifications have been given and information furnished to the Antitrust Division of the Department of Justice, which we refer to as the DOJ, and the Federal Trade Commission, which we refer to as the FTC, and all statutory waiting period requirements have been satisfied. Expiration or termination of the applicable waiting period (and any extension thereof) under the HSR Act is a condition to completion of the Merger.
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Litigation Relating to the Merger. Two complaints have been filed against Perspecta seeking to enjoin and recover damages from the Merger. The first, Wilson v. Perspecta Inc. et al., Case No. A-21-830758-B, was filed against Perspecta, the members of the Board and Veritas Capital Fund Management in the Nevada Eighth Judicial District Court in Clark County on March 9, 2021. The purported shareholder class action complaint alleges that Veritas Capital, which the complaint alleges is a controlling shareholder, and the Board breached their fiduciary duties in connection with the proposed Merger by agreeing to inadequate consideration for the proposed Merger, by engaging in a conflicted Merger process, and by disseminating a materially incomplete and misleading proxy statement in connection with the proposed Merger. The second, Waterman v. Perspecta Inc. et al., Case No. 651721/2021, was filed against Perspecta and members of the Board, in the New York Supreme Court in New York County on March 15, 2021. The complaint alleges that the Board breached its fiduciary duties to shareholders by disseminating a materially incomplete and misleading proxy statement in connection with the proposed Merger, and that Perspecta aided and abetted such breach. Both complaints seek, among other things, an order enjoining Perspecta from holding the stockholder meeting to vote on the proposed Merger and taking any steps to consummate the proposed Merger or, in the event the proposed Merger is consummated, an order rescinding, to the extent already implemented, the Merger or any terms thereof, or granting rescissory damages, and to recover an unspecified amount of damages resulting from the alleged violations of fiduciary duties. It is possible additional lawsuits may be filed between the date of this proxy statement and consummation of the Merger.
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A summary of the material provisions of the Merger Agreement, which is attached as Annex A to this proxy statement and which is incorporated by reference in this proxy statement, is included in “The Merger Agreement.”
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Effective Time of the Merger; Closing. We are working to complete the Merger as promptly as practicable. Assuming timely satisfaction of necessary closing conditions set forth in the Merger Agreement, we anticipate that the Merger will be completed in the first half of 2021. If our
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Conditions to the Completion of the Merger. The closing of the Merger depends on a number of conditions being satisfied or waived. These conditions, which are described more fully in “The Merger Agreement — Conditions to the Completion of the Merger,” include:
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the adoption of the Merger Agreement by the Company’s stockholders;
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the receipt of specified regulatory approvals, or expiration or termination of the applicable waiting period, under the HSR Act;
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the absence of any order or action restraining, enjoining or prohibiting the consummation of the transactions or otherwise making such consummation illegal or prohibited;
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the accuracy of each party’s representations and warranties in the Merger Agreement (subject to materiality qualifiers);
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the performance in all material respects by each party of all obligations required to be performed by it under the Merger Agreement;
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the delivery of an officers’ certificate by each party with respect to representation and warranties and performance of obligations under the Merger Agreement; and
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no Company Material Adverse Effect (as defined under the Merger Agreement) having occurred.
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Solicitation of Company Acquisition Proposals. Pursuant to the Merger Agreement, the Company was required to cease all existing discussions or negotiations with any person with respect to a Company Acquisition Proposal (as defined below in “The Merger Agreement – No Solicitation by the Company”) as of January 27, 2021. The Company has agreed that, during the term of the Merger Agreement and subject to certain exceptions, it will not, and will cause its subsidiaries and its and their respective directors, officers and employees holding the position of vice president or more senior position not to, and will use reasonable best efforts to cause its and their respective other employees and their other representatives not to, solicit any Company Acquisition Proposal.
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Termination. The Merger Agreement contains certain termination rights, including the right of (i) the Company to terminate the Merger Agreement to accept a Company Superior Proposal (as defined under the Merger Agreement) and, subject to specified limitations, or (ii) the Company or Parent to terminate the Merger Agreement upon a Company Change in Recommendation (as defined under the Merger
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Perspecta Inc. (the “Company”) is a Nevada corporation, whose business was formed as a result of the consummation on May 31, 2018 of the spin-off of DXC Technology Company’s (“DXC”) U.S. public sector business (the “Spin-Off”) and mergers with Vencore Holding Corp. and KGS Holding Corp. The Company is a leading provider of end-to-end enterprise information technology, mission, and operations-related services across U.S. federal government as well as to certain state and local government agencies. Our principal executive office is located at 14295 Park Meadow Drive, Chantilly, Virginia 20151, and the telephone number of our principal executive office is (571) 313-6000.
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Jaguar ParentCo Inc. (“Parent”) is a Delaware corporation. Parent was formed on January 22, 2021, solely for the purpose of completing the proposed Merger and has conducted no business activities other than those related to the structuring and negotiation of the Merger and arranging financing therefor. Parent is a direct, wholly-owned subsidiary of Peraton Intermediate Holding Corp. and has not engaged in any business except as contemplated by the Merger Agreement. The principal office address of Parent is 12975 Worldgate Drive, Herndon, Virginia 20170-6008. The telephone number at the principal office is (703) 668-6000.
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Jaguar Merger Sub Inc. (“Merger Sub”) is a Nevada corporation. Merger Sub was formed on January 22, 2021, solely for the purpose of completing the proposed Merger and has conducted no business activities other than those related to the structuring and negotiation of the Merger and arranging financing therefor. Merger Sub is a direct, wholly-owned subsidiary of Parent and has not engaged in any business except as contemplated by the Merger Agreement. The principal office address of Merger Sub is 12975 Worldgate Drive, Herndon, Virginia 20170-6008. The telephone number at the principal office is (703) 668-6000.
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Market Price of Common Stock and Dividends. The Shares are listed for trading on the New York Stock Exchange, which we refer to as the NYSE, under the symbol “PRSP.” We have historically declared and paid quarterly cash dividends on the Shares and the Merger Agreement permits us to continue to pay our regular quarterly dividend on the Shares consistent with past practice without the prior written consent of Parent. The closing price of the Shares on January 26, 2021, the last trading day before the first public reports of a potential sale of the Company, was $26.25 per Share.
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Why am I receiving this document?
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On January 27, 2021, the Company entered into the Merger Agreement. Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company with the Company surviving the Merger. Parent and Merger Sub are beneficially owned by affiliates of Veritas. A copy of the Merger Agreement is attached to this proxy statement as Annex A. Pursuant to resolutions adopted at a meeting of the Board held on January 26, 2021, the Board (with Mr. Ramzi Musallam recused) has unanimously (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were fair to, and in the best interests of, the Company’s stockholders, (ii) approved the Merger Agreement and the other transactions contemplated by the Merger Agreement and (iii) directed that the Merger Agreement be submitted to the holders of Shares for their approval and resolved to recommend that the holders of Shares approve the Merger Agreement and the other transactions contemplated by the Merger Agreement. In evaluating the Merger, the Board (with Mr. Ramzi Musallam recused) consulted with the Company’s management and legal and financial advisors and considered a number of factors.
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What is the proposed transaction and what effects will it have on the Company?
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The proposed transaction is the merger of Merger Sub with and into the Company pursuant to the Merger Agreement. If the Merger Agreement is adopted by our stockholders and the other closing conditions under the Merger Agreement have been satisfied or waived, Merger Sub, a wholly owned subsidiary of Parent, will merge with and into the Company and the Company will continue as the surviving corporation. As a result of the Merger, the Company will no longer be a publicly held corporation. In addition, following the consummation of the Merger, the registration of the Shares and the Company’s reporting obligation under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, with respect to the Shares will be terminated upon application to the Securities and Exchange Commission, which we refer to as the SEC, and the Shares will no longer be listed on any exchange or quotation system, including the NYSE, and price quotations will no longer be available. Following the consummation of the Merger, your Shares will represent only the right to receive the Merger Consideration, and you will no longer have any interest in our future earnings, growth, or value.
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What happens if the Merger is not completed?
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If the proposal to adopt the Merger Agreement is not approved by our stockholders or if the Merger is not completed for any other reason, our stockholders will not receive any payment for their Shares in connection with the Merger. Instead, the Company will remain a public company and our Shares will continue to be listed and traded on the NYSE, so long as the Company continues to meet the applicable listing requirements.
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When and where is the Special Meeting?
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The Special Meeting of stockholders of the Company will be held on May 5, 2021, at 10:00 a.m. Eastern Time. Due to the public health impact of COVID-19 and to support the well-being of our employees and stockholders, Perspecta will hold the Special Meeting virtually via the Internet at www.virtualshareholdermeeting.com/PRSP2021SM (the “virtual meeting website”). You will not be able to attend the Special Meeting physically in person.
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Who can vote at the Special Meeting?
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Stockholders of record as of the close of business on March 18, 2021, the Record Date for the Special Meeting, are entitled to receive notice of and to attend and vote at, the Special Meeting, or any adjournment or postponement thereof, via the Internet at the virtual meeting website. Each record holder of the Shares as of the Record Date is entitled to cast one vote on each matter properly brought before the Special Meeting for each Share that such holder owns of record as of the Record Date. If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the enclosed voting instruction form. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt the Merger Agreement, without your instructions. If you hold your shares in “street name,” you may not vote your shares in person virtually at the Special Meeting unless you obtain a “legal proxy” from your bank, broker or other nominee.
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What is the difference between being a “stockholder of record” and a “beneficial owner” of shares held in “street name”?
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If your Shares are registered directly in your name with our transfer agent, EQ Shareowner Services, you are considered, with respect to those Shares, the “stockholder of record.” In that case, this proxy statement and your proxy card have been sent directly to you by the Company.
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What am I being asked to vote on at the Special Meeting?
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You are being asked to consider and vote on the following:
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A proposal to adopt the Merger Agreement, a copy of which is attached to this proxy statement as Annex A, which we refer to as the Merger Agreement Proposal;
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A non-binding proposal regarding certain Merger-related executive compensation arrangements, as disclosed in the “Potential Change-in-Control Payments to Named Executive Officers” table contained in the section captioned “Special Factors — Interests of Executive Officers and Directors of the Company in the Merger — Golden Parachute Compensation,” which we refer to as the Golden Parachute Proposal; and
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One or more proposals to adjourn the Special Meeting, if necessary or appropriate, including adjournments to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement, which we refer to as the Adjournment Proposal.
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What is a quorum?
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The representation of the holders of a majority of the Shares outstanding and entitled to vote, present in person or by proxy, at the Special Meeting will constitute a quorum for the purposes of the Special Meeting.
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What vote is required for the Company’s stockholders to approve the Merger Agreement Proposal?
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The approval of the proposal to adopt the Merger Agreement and the transactions contemplated thereby, including the Merger, requires the affirmative vote of the holders of a majority of outstanding Shares
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What vote is required for the Company’s stockholders to approve the Golden Parachute Proposal?
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Approval of the non-binding proposal regarding certain Merger-related executive compensation arrangements requires the affirmative vote of the holders of a majority of the Shares present in person or represented by proxy and entitled to vote thereon at the Special Meeting.
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What vote is required for the Company’s stockholders to approve the Adjournment Proposal?
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Approval of one or more proposals to adjourn the Special Meeting, if necessary or appropriate, including adjournments to solicit additional proxies requires the affirmative vote of the holders of a majority of the Shares present in person or by proxy and entitled to vote thereon at the Special Meeting, whether or not a quorum is present.
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How are the votes counted?
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For each of the Merger Agreement Proposal, the Golden Parachute Proposal and the Adjournment Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” An abstention will have the same effect as an “AGAINST” vote for these proposals and will count for purposes of determining if a quorum is present at the Special Meeting.
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How does the Board recommend that I vote?
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The Board (with Mr. Musallam recused) recommends that you vote
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“FOR” the Merger Agreement Proposal,
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“FOR” the Golden Parachute Proposal, and
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“FOR” the Adjournment Proposal.
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How do I vote?
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If you are a stockholder of record as of the Record Date, you may vote your Shares on matters presented at the Special Meeting in any of the following ways:
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in person virtually — you may attend the Special Meeting and cast your vote via the Internet by using the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials;
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over the Internet by following the instructions provided in the notice of the Special Meeting, or if you requested printed proxy materials, by following the instructions provided with your proxy materials and on your proxy card;
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by using the toll-free telephone number by following the instructions provided on the Internet voting site, or if you requested printed proxy materials, by following the instructions provided with your proxy materials and on your proxy card or voting instruction card; or
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if you elected to receive printed proxy materials by mail, by mail by marking your proxy card, dating and signing it, and returning it in the postage-paid envelope provided; please allow sufficient time for mailing if you decide to vote by mail.
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What is a proxy?
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A proxy is your legal designation of another person to vote your Shares. This written document describing the matters to be considered and voted on at the Special Meeting is called a proxy statement. The document used to designate a proxy to vote your Shares is called a proxy card.
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If I am a stockholder of record, what happens if I do not vote or submit a proxy card?
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If you fail to vote, either in person or by proxy, your Shares will not be voted at the Special Meeting and will not be counted for purposes of determining whether a quorum exists.
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If my Shares are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee vote my Shares for me?
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Your bank, broker or other nominee will only be permitted to vote your Shares if you instruct your bank, broker or other nominee as to how to vote. You should follow the procedures provided by your bank, broker or other nominee regarding the voting of your Shares. Under NYSE rules, absent your instructions, a bank, broker or other nominee does not have discretionary authority to vote on “non-routine” matters and all of the matters to be considered at the Special Meeting are, under the NYSE rules, “non-routine.”
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If a stockholder gives a proxy, how are the Shares voted?
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Regardless of the method you choose to submit a proxy, the individuals named on the enclosed proxy card will vote your Shares in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your Shares should be voted “FOR” or “AGAINST,” or to “ABSTAIN” from voting on, all, some or none of the specific items of business to come before the Special Meeting.
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Can I change or revoke my vote?
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Yes. You have the right to revoke a proxy, including any proxy you may have given whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by (1) submitting another proxy at a later date through any of the methods available to you, (2) giving written notice of revocation to our Corporate Secretary, which must be filed with our Corporate Secretary by the time the Special Meeting begins, or (3) attending the Special Meeting via the Internet at the virtual meeting website and completing a virtual ballot. If your Shares are held in street name by your bank, broker or other nominee, please refer to the information forwarded by your bank, broker or other nominee for procedures on changing or revoking your proxy.
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What do I do if I receive more than one proxy or set of voting instructions?
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If you hold the Shares in “street name,” or through more than one bank, broker or other nominee, and also directly as a record holder or otherwise, you may receive more than one proxy or set of voting instructions relating to the Special Meeting. These should each be executed and returned separately in accordance with the instructions provided in this proxy statement in order to ensure that all of your Shares are voted.
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What happens if I sell my Shares before the Special Meeting?
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The Record Date for stockholders entitled to vote at the Special Meeting is prior to both the date of the Special Meeting and the consummation of the Merger. If you transfer your Shares before the Record Date, you will not be entitled to vote at the Special Meeting and will not be entitled to receive the Merger Consideration. If you transfer your Shares after the Record Date but before the Special Meeting you will, unless special arrangements are made, retain your right to vote at the Special Meeting but will transfer the right to receive the Merger Consideration to the person to whom you transfer your Shares. Unless special arrangements are made, the person to whom you transfer your Shares after the Record Date will not have a right to vote those Shares at the Special Meeting.
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Who will solicit and pay the cost of soliciting proxies?
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The Company has engaged Innisfree M&A Incorporated (“Innisfree”) to assist in the solicitation of proxies for the Special Meeting. The Company has agreed to pay Innisfree a fee of $25,000, and to reimburse Innisfree for reasonable out-of-pocket expenses. The Company will indemnify Innisfree and its affiliates against certain claims, liabilities, losses, damages and expenses. The Company also will reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of the Shares for their expenses in forwarding soliciting materials to beneficial owners of our Shares and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, by email, over the Internet or in person. They will not be paid any additional amounts for soliciting proxies.
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What do I need to do now?
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Even if you plan to attend the Special Meeting in person virtually, after carefully reading and considering the information contained in this proxy statement, please submit your proxy promptly to ensure that your Shares are represented at the Special Meeting. If you hold your Shares in your own name as the stockholder of record, please submit your proxy for your Shares by using the telephone number printed on your proxy card or by following the Internet proxy instructions printed on your proxy card or by completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope. TO FACILITATE THE TIMELY RECEIPT OF YOUR PROXY DESPITE ANY POTENTIAL SYSTEMS DISRUPTION DUE TO COVID-19, WE ENCOURAGE YOU TO VOTE BY TELEPHONE OR INTERNET TODAY. If you decide to attend the Special Meeting and vote in person by virtual ballot, your vote by ballot at the Special Meeting will revoke any proxy previously submitted. If you are a beneficial owner of the Shares, please refer to the instructions provided by your bank, broker or other nominee to see which of the above choices are available to you.
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What is householding and how does it affect me?
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The SEC rules permit companies and intermediaries such as banks and brokers to satisfy delivery requirements with respect to two or more stockholders sharing the same address by delivering a single proxy statement. This process is commonly referred to as “householding” and can result in significant cost savings for the Company. To take advantage of this opportunity, Perspecta, and banks and brokers that hold your shares, have delivered only one proxy statement to multiple stockholders who share an address unless one or more of the stockholders has provided contrary instructions. The Company will deliver promptly, upon written or oral request, a separate copy of the proxy statement to a stockholder at a shared address to which a single copy of the documents was delivered. See “Where You Can Find More Information.”
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Am I entitled to exercise dissenter’s rights under the NRS instead of receiving the Merger Consideration for my Shares?
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Pursuant to Section 92A.390 of the Nevada Revised Statutes (the “NRS”), no holder of any Shares will have or be entitled to assert dissenter’s rights or any rights of appraisal as a result of or in connection with the Merger Agreement and the transactions contemplated thereby, including the Merger.
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Who can help answer my other questions?
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If you have additional questions about the Merger, need assistance in submitting your proxy or voting your Shares, or need additional copies of the proxy statement or the enclosed proxy card, please contact:
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The Merger Consideration of $29.35 per Share represented a premium of (i) 49.7% over the closing price of the Shares on November 6, 2020, the last trading day before the first public reports of a potential strategic process for the Company and (ii) 11.8% over the closing price of the Shares on January 26, 2021, the last trading day before the announcement of the Merger.
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The current and historical market prices of the Company’s common stock, including those set forth in the table under “Other Important Information Regarding the Company — Market Price of Common Stock and Dividends,” taking into account the market performance of the Company’s common stock relative to the common stock of other participants in the industry in which the Company operates and general market indices, and the fact that as of November 6, 2020, the last trading day before the first public reports of a potential strategic process for the Company, the trading price of the Company’s
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Information with respect to the Company’s business, operations, financial condition, earnings and prospects, the Company’s long-range plans, and the risk in achieving those prospects and plans, as well as industry, economic and market conditions and trends, including the Disinterested Directors’ evaluation of the current state of the economy and the stage of the U.S. public sector market industry cycle, financing markets, uncertainty in public sector contract pricing and uncertainty surrounding forecasted economic conditions both in the near term and the long term, generally and within the Company’s industry in particular.
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The Disinterested Directors’ belief that the $29.35 per Share Merger Consideration exceeded the implied purchase price in an all-stock transaction at a fixed exchange ratio proposed by Company A, the only other proposal received by the Company in the final round of bidding.
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That the Merger Consideration of $29.35 is higher than the highest price paid by the Company or any of the other filing persons for any Shares purchased by them during the past two years, as described in more detail under “Other Important Information Regarding the Company — Certain Transactions in the Shares.”
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That the per Share Merger Consideration consists solely of cash, providing the Company’s stockholders with certainty of value and liquidity.
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That, although the Company was a potential target for a strategic transaction or a leveraged buyout and the Disinterested Directors had received interest from multiple potential bidders, no potential acquiror other than Parent, Company A and Company B made a proposal to acquire the Company before the Merger Agreement was executed on January 27, 2021 (and Company B did not submit a proposal in the final round of bidding), and the Disinterested Directors’ belief that potential acquirors would have approached the Company after the first public reports of a potential strategic process for the Company.
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The terms of the Merger Agreement permitting the Company to receive unsolicited proposals, and the other terms and conditions of the Merger Agreement, including:
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that the Company may, subject to certain conditions, furnish any information and reasonable access to third parties making such a proposal and participate or engage in negotiations or discussions with such third parties regarding unsolicited proposals that are made prior to obtaining stockholder approval of the Merger Agreement Proposal;
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the provisions of the Merger Agreement allowing the Board in certain circumstances to terminate the Merger Agreement in order to enter into a definitive agreement with respect to an unsolicited Company Superior Proposal, subject to payment of a termination fee of approximately $97 million, which amount the Disinterested Directors believed to be reasonable under the circumstances and taking into account the range of such termination fees in similar transactions, and the unlikelihood that a fee of such size would be a meaningful deterrent to other acquisition proposals; and
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its ability under the Merger Agreement to withdraw or modify its recommendation that the holders of the Shares approve the Merger Agreement and the other transactions contemplated by the Merger Agreement, including in connection with a Company Superior Proposal or a state of facts, circumstance, condition or event occurring or arising after the date of the Merger Agreement that was not known to the Board as of the date of the Merger Agreement, and subsequently terminate the Merger Agreement, subject to payment of a termination fee of approximately $97 million.
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The financial and other terms and conditions of the Merger Agreement and the transactions contemplated thereby, including the Merger, resulting from extensive negotiations conducted at the direction of the Disinterested Directors, with the assistance of experienced legal and financial advisors, during a process that resulted in, among other things, an increase in the Merger Consideration from Parent’s initial proposal.
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The strategic review and discussion undertaken by the Disinterested Directors with the assistance of the Company’s management and advisors, which involved the evaluation of multiple options, including the Company’s stand-alone business plan, potential value creating options, the consideration by the Disinterested Directors of multiple potential acquirors, negotiation with certain of such acquirors, the fact that, other than Company A, no other party made any definitive proposal, together supporting the Disinterested Directors’ belief that the Merger Agreement and the transactions contemplated thereby, including the Merger, were more favorable to the Company and is stockholders, when compared with other strategic initiatives reasonably available to the Company taking into account the Company’s stand-alone business plan and certain potential value enhancement opportunities, including possible acquisitions and dispositions, and their associated benefits and risks (as more fully described under “Special Factors — Background of the Merger”).
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The financial presentation and opinion of Goldman Sachs, dated January 27, 2021, to the Board as to the fairness, from a financial point of view and as of the date of the opinion, of the Merger Consideration to be received by the holders of Shares (other than Parent, Veritas Capital and their respective affiliates) pursuant to the Merger Agreement, which opinion was based on and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken (as more fully described under “Special Factors — Opinions of Perspecta’s Financial Advisors — Opinion of Goldman Sachs & Co. LLC”).
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The financial presentation and opinion of Stone Key, dated January 26, 2021, to the Board as to the fairness, from a financial point of view and as of the date of the opinion, of the Merger Consideration to be received by the holders of Shares (other than Parent, Merger Sub and their respective affiliates) pursuant to the Merger Agreement, which opinion was based on and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken (as more fully described under “Special Factors — Opinions of Perspecta’s Financial Advisors — Opinion of Stone Key”).
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The likelihood of the Merger being completed, based on, among other matters:
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Parent having obtained committed debt financing in connection with the transaction, the reputation of the financing sources and the obligation of Parent to use reasonable best efforts to obtain the debt financing;
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the absence of a financing condition in the Merger Agreement;
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the Company’s ability, under circumstances specified in the Merger Agreement, to seek specific performance of Parent’s obligation to cause the Merger to occur;
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the requirement that, in the event of a failure of the Merger to be consummated under certain circumstances, Parent pay the Company a termination fee of approximately $243 million, and the commitment with respect to such payment obligation by Veritas Fund VII (as more fully described under “The Merger Agreement — Termination Fees”);
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the requirement that Parent use reasonable best efforts to obtain the regulatory approvals required to consummate the Merger, including (i) selling, divesting or holding separate any assets, properties, products, rights, services, businesses, or voting securities and (ii) terminating, modifying or extending any existing relationships or contractual rights or obligations; and
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the likelihood and anticipated timing of completing the proposed Merger in light of the scope of the conditions to completion, including that there were no anticipated substantive issues expected in connection with the required regulatory approvals.
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The terms and conditions of the Merger Agreement, including:
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the belief of the Disinterested Directors that the Company’s termination fees were reasonable in light of, among other matters, the benefit of the Merger to the Company’s stockholders, the size of such termination fees in similar transactions and the enterprise value of the Company;
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the terms of the Merger Agreement providing the Company sufficient operating flexibility to conduct its business in the ordinary course until the earlier of the consummation of the Merger or the termination of the Merger Agreement; and
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the ability of the Company to seek specific performance to prevent certain breaches of the Merger Agreement by Parent and Merger Sub.
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The Limited Guarantee, provided by Veritas Fund VII, guaranteeing Parent’s obligations under the Merger Agreement with respect to payment of the Parent Termination Fee and certain reimbursement obligations.
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The Disinterested Directors’ belief that they were fully informed about the extent to which the interests of Veritas Capital in the Merger differ from those of the Company’s other stockholders.
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That management did not negotiate or enter into any contracts (including as to post-closing employment) with Veritas Capital or its affiliates in connection with the execution of the Merger Agreement or during the course of the Company’s negotiations with Veritas Capital.
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that each of the Disinterested Directors (representing a majority of the Board) were disinterested in Veritas Capital’s proposal to acquire the Company;
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that from August 5, 2020 (the date of the first Disinterested Directors meeting following Mr. Musallam’s request to release Veritas Capital from certain standstill restrictions), the only member of the Board who was a partner or employee of Veritas Capital was excluded from all deliberations with respect to the negotiation, evaluation or approval of the Merger Agreement and the Merger and the consideration of other strategic alternatives, deferring all decisions relating to the Merger and the Company’s potential strategic alternatives to the Disinterested Directors;
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that the Disinterested Directors, as a majority of the Board, had the power to negotiate, and terminate at any time negotiations relating to, a potential transaction;
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that the Disinterested Directors, other than Mr. Curtis, are not officers or employees of the Company, are not representatives of Veritas Capital, and are not expected to have an economic interest in the Company or the surviving corporation following the completion of the Merger;
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that the Disinterested Directors received the advice and assistance of experienced legal and financial advisors;
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that, at the direction of the Disinterested Directors, with the assistance of legal and financial advisors, extensive negotiations occurred with Veritas Capital and Parent regarding the Merger Consideration that resulted in an increase in the Merger Consideration during the course of negotiations, and the improvement, from the perspective of the Company, of other terms of the Merger and the Merger Agreement, including the operating covenants and the amount of the termination fees, relative to Veritas Capital’s initial proposed terms;
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that the Disinterested Directors met at least twelve times during the course of approximately five months to review potential transactions and other options, including the proposal from and negotiations with Veritas Capital, the proposal from Company A, interest from numerous other parties and other options (including the stand-alone business plan) potentially available to the Company, and that at all but one of each such meetings, the independent members of the Board also met in executive session;
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the various terms of the Merger Agreement, including that the Merger Agreement contains the ability of the Company to terminate the Merger Agreement under certain circumstances to accept a Company Superior Proposal (as more fully described under “The Merger Agreement”), that are intended to help ensure that the Company’s stockholders receive the highest price per Share reasonably available;
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that the Disinterested Directors made their evaluation of the Merger Agreement and the Merger based upon the factors discussed in this proxy statement and with the full knowledge of the interests of Veritas Capital in the Merger; and
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the ability of the Board, under certain circumstances, to withdraw or modify its recommendation that the holders of the Shares approve the Merger Agreement and the other transactions contemplated by the Merger Agreement, and to subsequently terminate the Merger Agreement, subject to payment of a termination fee of approximately $97 million.
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that, following the completion of the Merger, the Company will no longer exist as an independent public company and that the consummation of the Merger and receipt of the Merger Consideration, while providing relative certainty of value, will not allow the Company’s stockholders to participate in potential further growth in the Company’s assets, future earnings growth, future appreciation in value of the Shares or any future dividends after the Merger;
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the risk that the transactions contemplated by the Merger Agreement, including the Merger, and the financing for the transaction, may not be consummated in a timely manner or at all, and the consequences thereof, including (i) the potential loss of value to the Company’s stockholders, (ii) the potential negative impact on the operations and prospects of the Company, including the risk of loss of key personnel, and (iii) the market’s perception of the Company’s prospects could be adversely affected if such transactions were delayed or were not consummated;
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the possible effects of the pendency or consummation of the transactions contemplated by the Merger Agreement, including the potential for suits, actions or proceedings in respect of the Merger Agreement or the transactions contemplated by the Merger Agreement, the risk of any loss or change in the relationship of the Company and its subsidiaries with their respective employees, agents, customers and other business relationships, and any possible effect on the Company’s ability to attract and retain key employees, including that certain key members of senior management might choose not to remain employed with the Company prior to the completion of the Merger;
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the risks and potentially negative factors described in “Special Factors — Certain Effects of the Merger” and “Special Factors — Certain Effects on the Company if the Merger is not Completed,” respectively;
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that the Company’s directors, officers and employees have expended and will expend extensive efforts attempting to complete the transactions contemplated by the Merger Agreement and such persons have experienced and will experience significant distractions from their work during the pendency of such transactions and that the Company has incurred and will incur substantial costs in connection with such transactions, even if such transactions are not consummated;
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that the receipt of the Merger Consideration in exchange for Shares pursuant to the Merger Agreement will be a taxable transaction for U.S. federal income tax purposes;
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the restrictions imposed by the Merger Agreement on the Company’s solicitation of acquisition proposals from third parties, and that prospective bidders may perceive Parent’s right under the Merger Agreement to negotiate with the Company to match the terms of any Company Superior Proposal prior to the Company being able to terminate the Merger Agreement and accept a Company Superior Proposal to be a deterrent to making alternative proposals;
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that the Sponsor Entities’ ownership interest in the Company would likely be taken into account by third parties considering whether to make alternative proposals;
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the possibility that the Company may be required to pay Parent (or its designee) a termination fee of approximately $97 million (as more fully described under “The Merger Agreement — Termination Fees”), under certain circumstances, including to accept a Company Superior Proposal;
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that the Company’s remedy in the event of the failure of the Merger to close as a result of a financing failure is limited to receipt of an approximately $243 million termination fee payable by Parent;
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that Parent and Merger Sub are newly formed entities with essentially no assets and the Limited Guarantee, provided by Veritas Fund VII, guarantees Parent’s obligations under the Merger Agreement only with respect to payment of the Parent termination fee and certain reimbursement obligations, and is subject to a cap of approximately $253 million;
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that, if the Merger Agreement is terminated in connection with the Company’s entry into a definitive agreement with respect to a Company Superior Proposal, the Sponsor Entities have not agreed to vote their Shares in favor of such Company Superior Proposal;
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the understanding that some of the Company’s directors and executive officers have other interests in the Merger in addition to their interests as stockholders of the Company, including the manner in which they would be affected by the Merger (as discussed under “Special Factors — Interests of Executive Officers and Directors of the Company in the Merger”); and
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the restrictions placed on the conduct of the Company’s business prior to the completion of the Merger pursuant to the terms of the Merger Agreement, which could delay or prevent the Company from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of the Company absent the pending completion of the Merger.
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the current and historical market prices of the Shares, including the market performance of the Shares relative to those of other participants in the Company’s industry and general market indices, and the fact that the Merger Consideration of $29.35 per share represented a premium of approximately 49.7% over the closing price of the Shares on November 6, 2020, the last trading day before the first public reports of a potential strategic process for the Company and approximately 11.8% over the closing price of the Shares on January 26, 2021, the last trading day before the announcement of the Merger;
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the historical market prices of the Company’s common stock, including those set forth in the table under “Other Important Information Regarding the Company — Market Price of Common Stock and Dividends”, through the date of the announcement of the Merger Agreement on January 27, 2021, which, despite being affected by the public reports of a potential strategic process for the Company,
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the fact that the Disinterested Directors unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, the Company stockholders;
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the fact that the Merger Consideration is all cash, thus allowing stockholders to immediately realize a certain and fair value for their Shares;
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the fact that the Merger will provide liquidity for the Company’s unaffiliated stockholders without the delays that would otherwise be necessary in order to liquidate the positions of larger holders, and without incurring brokerage and other costs typically associated with market sales; and
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the fact that there are no unusual requirements or conditions to the Merger and that the Merger is not conditioned on any financing being obtained by Parent, increasing the likelihood that the Merger will be consummated and that the consideration to be paid to the Company’s unaffiliated stockholders in the Merger will be received.
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that the Board was fully informed about the extent to which the interests of the Sponsor Entities in the Merger differed from those of the Company’s other stockholders;
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the fact that, from August 5, 2020 (the date of the first Disinterested Directors meeting following Mr. Musallam’s request to release Veritas from certain standstill restrictions), the Sponsor Entities’ designee on the Board were excluded from certain Board discussions;
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deliberations with respect to the negotiation, evaluation or approval of the Merger Agreement and the Merger, deferring all decisions relating to the Merger and the Company’s strategic alternatives to the Disinterested Directors;
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the fact that a majority of the Disinterested Directors are not employees of the Company or any of its subsidiaries and have no interest in the Merger that is different from that of the unaffiliated stockholders (other than the acceleration of certain equity-based awards held by such directors);
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the fact that the Board retained, and the Disinterested Directors had the benefit of advice from, nationally recognized legal and financial advisors;
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the fact that the Disinterested Directors met independently on several occasions to consider the Company’s alternatives and were advised by Goldman Sachs, Stone Key and Paul, Weiss;
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notwithstanding the fact that the Goldman Sachs opinion was not delivered to the Sponsor Entities and the Sponsor Entities are not entitled to rely on such opinion, the fact that the Board received an opinion from Goldman Sachs, dated January 27, 2021, that based upon and subject to the factors and assumptions set forth therein, the $29.35 in cash per share of the Company’s common stock to be paid to the holders (other than Parent, Veritas Capital, and their respective affiliates) of shares of the Company’s common stock pursuant to the Merger Agreement was fair from a financial point of view to such holders;
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notwithstanding the fact that the Stone Key opinion was not delivered to the Sponsor Entities and the Sponsor Entities are not entitled to rely on such opinion, the fact that the Board received an oral from Stone Key on January 26, 2021, which oral opinion was subsequently confirmed in writing, that based upon and subject to the assumptions, qualifications and limitations set forth in the written opinion, the Merger Consideration was, from a financial point of view, to the holders of the outstanding shares of Perspecta common stock, excluding Parent, Merger Sub and their respective affiliates;
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the fact that the Board was deliberate in its process, taking approximately five months to run a thorough, open and competitive process and to evaluate various alternatives;
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the fact that representatives of the Company contacted a large number of potential financial and strategic acquirors in the sale process, and that the process was also the subject of multiple public reports and disclosures;
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the fact that the Merger Consideration was the result of the Board’s and the Disinterested Directors’ extensive arm’s-length negotiations with Parent;
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the Company’s ability, under certain circumstances as set out in the Merger Agreement, to provide information to, or participate in discussions or negotiations with, third parties regarding other proposals; and
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the Company’s ability, under certain circumstances as set out in the Merger Agreement, to terminate the Merger Agreement to enter into a definitive agreement related to a superior proposal, subject to paying a termination fee of approximate $97 million.
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that the stockholders of the Company will not participate in any future earnings or growth of the Company’s business and will not benefit from any potential sale to a third party in the future, or from any appreciation in the Company’s value;
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the risk that the Merger might not be completed in a timely manner or at all, including the risk that the Merger will not occur if sufficient debt financing is not obtained;
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that Parent and Merger Sub are newly formed corporations with essentially no assets other than the equity and funding commitments of certain of the Sponsor Entities;
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the restrictions on the conduct of the Company’s business prior to the completion of the Merger, which may delay or prevent the Company from undertaking business opportunities that may arise and certain other actions it might otherwise take with respect to the operations of the Company pending completion of the Merger;
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the potential negative effect that the pendency of the Merger, or a failure to complete the Merger, could have on the Company’s business and relationships with its employees, vendors and customers;
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that the Company and its subsidiaries are restricted from soliciting, initiating, or encouraging the submission of alternative acquisition proposals from third parties or the making of any inquiry, proposal or offer that would reasonably be expected to lead to an alternative acquisition proposal;
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the possibility that the amounts that may be payable by the Company upon the termination of the Merger Agreement, including a termination fee of approximate $97 million, and the processes required to terminate the Merger Agreement, including the opportunity for Parent to make revisions to its merger proposal, could discourage other potential acquirors from making a competing bid to acquire the Company; and
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the fact that an all cash transaction would be taxable to the Company’s stockholders that are U.S. holders for U.S. federal income tax purposes.
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the Merger Agreement;
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annual reports to stockholders and Annual Reports on Form 10-K of the Company for the three fiscal years ended March 31, 2020;
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the Company’s Registration Statement on Form 10 dated April 30, 2018;
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certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company;
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certain other communications from the Company to its stockholders;
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certain publicly available research analyst reports for the Company;
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certain internal financial analyses and forecasts for the Company prepared by management of the Company, as approved for Goldman Sachs’ use by the Company, referred to in this section as the “Forecasts;” and
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certain analyses prepared by the management of the Company related to the expected utilization by the Company of certain net operating loss carryforwards and other tax attributes of the Company, as approved for Goldman Sachs’ use by the Company, referred to in this section as the “Tax Attributes” and which, along with the Forecasts, are summarized in the section entitled “Special Factors—Certain Unaudited Prospective Financial Information”.
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$19.60, the closing price of the Shares on November 6, 2020, the last trading day prior to media reports being published regarding a potential strategic process for the Company (which we refer to as the “Unaffected Share Price”);
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$24.71, the volume weighted average price (which we refer to as the “VWAP”) of the Shares over the 30-trading-day period ended January 25, 2021 (which we refer to as the “30-Day VWAP”);
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•
|
$23.10, the VWAP of the Shares over the 60-trading-day period ended January 25, 2021 (which we refer to as the “60-Day VWAP”); and
|
|
•
|
$21.68, the VWAP of the Shares over the 90-trading-day period ended January 25, 2021 (which we refer to as the “90-Day VWAP”).
|
|
|
| |
Implied Premium
Represented by $29.35 in per
share merger consideration
|
|
Reference Price Per Share:
|
| |
|
|
Unaffected Share Price of $19.60
|
| |
49.7%
|
|
30-Day VWAP of $24.71
|
| |
18.8%
|
|
60-Day VWAP of $23.10
|
| |
27.1%
|
|
90-Day VWAP of $21.68
|
| |
35.4%
|
|
|
| |
Multiples
|
|
Implied Enterprise Value as a Multiple of:
|
| |
|
|
2021E Adjusted EBITDA
|
| |
9.7x
|
|
2022E Adjusted EBITDA
|
| |
11.3x
|
|
Announced
|
| |
Acquiror
|
| |
Target
|
| |
EV / LTM EBITDA
|
|
February 11, 2018
|
| |
General Dynamics Corporation
|
| |
CSRA Inc.
|
| |
12.1x
|
|
September 10, 2018
|
| |
Science Applications International Corporation Corp.
|
| |
Engility Holdings Inc.
|
| |
12.6x
|
|
October 14, 2019
|
| |
American Securities LLC / Lindsay Goldberg LLC
|
| |
AECOM Management Services
|
| |
11.6x
|
|
February 6, 2020
|
| |
Science Applications International Corporation Corp.
|
| |
Unisys Corporation
|
| |
11.1x
|
|
•
|
was provided to Perspecta’s senior management and Board in connection with their consideration of the Merger and, except as required by applicable law, rule or regulation, may not be reproduced, disseminated, quoted from or referred to by Perspecta at any time, in whole or in part, without Stone Key’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed);
|
|
•
|
did not constitute a recommendation to the Board;
|
|
•
|
did not constitute a recommendation to any stockholder of Perspecta as to how to vote in connection with the Merger or any other matter;
|
|
•
|
did not address Perspecta’s underlying business decision to pursue the Merger, the relative merits of the Merger as compared to any alternative business or financial strategies that might exist for Perspecta, the financing of the Merger or the effects of any other transaction in which Perspecta might engage;
|
|
•
|
addressed only the fairness, from a financial point of view, of the Merger Consideration to the holders of the outstanding shares of Perspecta Common Stock, excluding Parent, Merger Sub and their respective affiliates;
|
|
•
|
did not express any view or opinion with respect to the fairness of the compensation to be received in connection with the Merger by holders of any other class of securities, creditors or other constituencies of Perspecta;
|
|
•
|
did not express any view or opinion with respect to the allocation of the aggregate consideration to be paid in connection with the Merger among holders of various classes of securities or other constituencies of Perspecta;
|
|
•
|
did not express any view or opinion with respect to the merits of the Merger to any holder of Perspecta equity relative to any other holder of Perspecta equity or as to the fairness of the Merger, from a financial point of view, to Parent, Merger Sub and their respective affiliates;
|
|
•
|
did not address any other term or aspect of the transaction documentation, including the Merger Agreement, or any term or aspect of any other agreement or instrument contemplated by the transaction documentation or entered into or amended in connection with the Merger, or the impact thereof on Perspecta;
|
|
•
|
did not express any opinion as to the impact of the Merger or any transaction entered into in connection therewith on the solvency or viability of Perspecta or Parent (or its affiliates) or the ability of Perspecta or Parent (or its affiliates) to pay their respective obligations, when they become due; and
|
|
•
|
did not express any view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation payable to or to be received by any of Perspecta’s officers, directors or employees, or any class of these persons, in connection with the Merger relative to the Merger Consideration to be received by the stockholders of Perspecta pursuant to the Merger.
|
|
•
|
reviewed drafts of the transaction documentation in substantially final form;
|
|
•
|
reviewed Perspecta’s Annual Reports to Shareholders and Annual Reports on Form 10-K for the fiscal years ended March 31, 2018, 2019 and 2020, its Quarterly Reports on Form 10-Q for the periods ended July 3, 2020 and October 2, 2020, its preliminary results for the quarter ended January 1, 2021 and its Current Reports on Form 8-K filed since March 31, 2020;
|
|
•
|
reviewed certain operating and financial information relating to Perspecta’s business and prospects, including projections for the six years ending April 3, 2026, all as prepared and provided to Stone Key by Perspecta’s management;
|
|
•
|
met with certain members of Perspecta’s management to discuss Perspecta’s business, operations, historical and projected financial results and future prospects;
|
|
•
|
reviewed the historical prices, trading multiples and trading volume of the Shares;
|
|
•
|
reviewed certain publicly available financial data, stock market performance data and trading multiples of companies which Stone Key deemed generally comparable to Perspecta;
|
|
•
|
reviewed the terms of certain relevant mergers and acquisitions involving companies which Stone Key deemed generally comparable to Perspecta;
|
|
•
|
performed discounted cash flow analyses based on the projections for Perspecta furnished to Stone Key by Perspecta; Perspecta’s cash flows for the period between the January 25, 2021 valuation date and March 31, 2021 were calculated in proportion to Perspecta’s projections for the entire fiscal year; and
|
|
•
|
conducted such other studies, analyses, inquiries and investigations as Stone Key deemed appropriate.
|
|
•
|
Stone Key relied upon and assumed the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by it, including, without limitation, the projections referred to above.
|
|
•
|
With respect to the projections, Stone Key assumed, with the consent of Perspecta’s Board, that they were, at the time of their preparation, reasonably prepared and reflect appropriate estimates and judgments of the management of Perspecta based on then available facts and circumstances as to the expected future performance of Perspecta. In performing its discounted cash flow analyses, Perspecta’s management directed Stone Key to use the projections described above.
|
|
•
|
Stone Key did not assume any responsibility for the independent verification of any information referred to above, including, without limitation, the projections; Stone Key expressed no view or opinion as to the projections and the assumptions upon which they were based; and Stone Key further relied upon the assurances of the management of Perspecta that they were unaware of any facts that would have made the information and projections incomplete or misleading.
|
|
•
|
Stone Key has assumed that the near-term and long-term impact of the pending COVID-19 pandemic has been accurately forecasted in such (i) information, including projections (and the assumptions upon which they are based); and (ii) estimates, judgments and assurances of management of Perspecta. Stone Key expresses no opinion as to the impact on its opinion if the actual near-term and/or long-term impact of the pandemic varies from the forecasted amounts.
|
|
•
|
In arriving at its opinion, Stone Key did not perform or obtain any independent appraisal of the assets or liabilities (contingent or otherwise) of Perspecta, nor was Stone Key furnished with any such appraisals.
|
|
•
|
During the course of Stone Key’s engagement, Stone Key was asked by Perspecta’s Board to solicit indications of interest from various third parties regarding a transaction with Perspecta, and Stone Key considered the results of such solicitation in rendering its opinion.
|
|
•
|
Stone Key assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Merger will be obtained without any adverse effect on the expected benefits of the Merger in any way meaningful to Stone Key’s analysis.
|
|
•
|
Stone Key assumed that the Merger will be consummated in a timely manner and in accordance with the terms of the Merger Agreement without any amendments or modifications, the effect of which would be in any way meaningful to Stone Key’s analysis.
|
|
•
|
Stone Key is not a legal, regulatory, tax or accounting expert and has relied on the assessments made by Perspecta and its advisors with respect to these issues.
|
|
•
|
Stone Key did not express any opinion as to the price or range of prices at which the shares of Perspecta common stock may trade subsequent to the announcement of the Merger.
|
|
Transaction Price per Share
|
| |
$29.35
|
|
Acquisition Premium/(Discount) Relative to:
|
| |
Perspecta
Stock Price
|
| |
Premium
|
|
Closing Stock Price as of 1/25/2021
|
| |
$26.54
|
| |
10.6%
|
|
Unaffected Stock Price as of 11/06/2020
|
| |
19.60
|
| |
49.7
|
|
30-Day Average Price as of 1/25/2021
|
| |
24.84
|
| |
18.2
|
|
90-Day Average Price as of 1/25/2021
|
| |
22.14
|
| |
32.6
|
|
52-Week High Price as of 1/25/2021
|
| |
29.41
|
| |
(0.2)
|
|
52-Week Low Price as of 1/25/2021
|
| |
15.39
|
| |
90.7
|
|
Transaction Enterprise Value/Calendar Year (CY) 2021 Estimated EBITDA:
|
| |
|
| |
|
|
Management Estimates
|
| |
|
| |
11.4x
|
|
Transaction Enterprise Value/CY2022E EBITDA:
|
| |
|
| |
|
|
Management Estimates
|
| |
|
| |
12.0x
|
|
•
|
Stone Key based its discounted cash flow analyses on the management projections that Stone Key was directed to use, as described above, by Perspecta’s management.
|
|
•
|
Stone Key estimated Perspecta’s weighted average cost of capital to be within a range of 6.5% to 7.5% based on, among other factors, (i) a review of Perspecta’s adjusted three-year FactSet historical adjusted beta and five-year FactSet historical adjusted beta as well as similar beta information for the comparable companies, (ii) Stone Key’s estimate of the U.S. equity risk premium, (iii) Perspecta’s capital structure and (iv) Stone Key’s investment banking and capital markets judgment and experience in valuing companies similar to Perspecta.
|
|
•
|
For purposes of the perpetual method, Stone Key used perpetual growth rates of 0.50%-1.50%.
|
|
•
|
For purposes of the terminal multiples method, Stone Key used a reference range of terminal enterprise value/forward EBITDA multiples of 9.0x to 13.0x.
|
|
•
|
Stone Key’s discounted cash flow analyses resulted in an overall reference range of $24.06 to $37.33 per share using the perpetual growth method and $21.02 to $33.79 per share using the terminal multiples method for purposes of valuing Perspecta common stock.
|
|
•
|
Stone Key noted that the transaction price of $29.35 was in line with the aforementioned valuation reference ranges.
|
|
•
|
General Dynamics Corporation’s acquisition of CSRA Inc.
|
|
•
|
Science Applications International Corporation’s acquisition of Engility Holdings, Inc.
|
|
•
|
Science Applications International Corporation’s acquisition of the U.S. Federal business of Unisys Corporation
|
|
•
|
Stone Key selected a reference range of transaction multiples based on transaction enterprise value / forward EBITDA multiple range of 10.5x to 13.3x.
|
|
•
|
Stone Key’s analysis of the select relevant precedent merger and acquisition transactions resulted in an overall reference range of $25.91 to $36.34 per share for purposes of valuing Perspecta common stock.
|
|
•
|
Stone Key noted that the transaction price of $29.35 was in line with the aforementioned valuation reference range based on the precedent merger and acquisition transactions analysis.
|
|
•
|
Booz Allen Hamilton Holding Corporation
|
|
•
|
CACI International Inc
|
|
•
|
Leidos Holdings, Inc.
|
|
•
|
ManTech International Corporation
|
|
•
|
Science Applications International Corporation
|
|
•
|
Stone Key selected a reference range of trading multiples based on an enterprise value to CY2021E EBITDA multiple range of 9.0x to 13.0x.
|
|
•
|
For the purposes of valuing Perspecta common stock, Stone Key’s analysis of the comparable companies resulted in an overall reference range of $20.33 to $35.22 per share (without having assumed any acquisition premium).
|
|
•
|
the 52-week trading closing price range for Perspecta for the period ending January 25, 2021, which yielded a range of $15.39 to $29.41 per share;
|
|
•
|
Wall Street analyst price targets analysis, which indicated a low and high price target of $25.00 to $30.00 per share;
|
|
•
|
a present value of future stock prices analysis, which discounts, at the midpoint of Perspecta’s cost of equity, the implied future price per share derived by applying a range of forward EBITDA multiples to the management projected EBITDA, deducting management projected net debt and dividing by management projected fully diluted shares outstanding. Stone Key observed that for periods of fiscal year 2021 to fiscal year 2025 at a forward EBITDA range of 9.0x – 13.0x, the present value analysis indicated a price range of $18.92 to $34.53 per share; and
|
|
•
|
a precedent premiums paid analysis of certain precedent transactions announced from 2016 through 2020 involving U.S. public companies where the target consideration was paid in cash. Stone Key observed a range of premiums to the one-day unaffected stock prices of 11.8% to 41.1%. Applying the range of premium to the Unaffected Stock Price of $19.60 per share, which indicated a range of implied equity value of $21.91 to $27.66 per share.
|
|
•
|
based its analyses on assumptions that it deemed reasonable, including those described (i) in the bulleted sections set forth in the last paragraph starting on page 37 and (ii) in the section entitled “— Stone Key's Valuation Analyses” above;
|
|
•
|
did not form a view or opinion as to whether any individual analysis or factor, whether positive or negative, considered in isolation, supported or failed to support the Stone Key opinion; and
|
|
•
|
arrived at its ultimate opinion on the basis of its experience and professional judgment after considering the results of all analyses undertaken by it and assessed as a whole and believes that the totality of the factors considered and analyses performed by Stone Key in connection with its opinion operated collectively to support its determination as to the fairness, from a financial point of view, of the Merger Consideration to be received by holders of Shares (excluding Parent, Merger Sub and their respective affiliates) pursuant to the Merger.
|
|
•
|
The analyses performed by Stone Key, particularly those based on estimates and projections, are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by these analyses.
|
|
•
|
None of the public companies used in the comparable company analysis described above are identical to Perspecta, and none of the precedent merger and acquisition transactions used in the precedent transactions analysis described above are identical to the Merger.
|
|
•
|
Accordingly, the analyses of publicly traded comparable companies and precedent merger and acquisition transactions are not mathematical; rather, such analyses involve complex considerations and judgments concerning the differences in financial, operating and capital markets-related characteristics and other factors regarding the companies and precedent merger and acquisition transactions to which Perspecta and the Merger were compared.
|
|
•
|
The analyses performed by Stone Key do not purport to be appraisals or to reflect the prices at which any securities may trade at any time.
|
|
•
|
government information technology spending increases of 2% or less per year so revenue growth comes primarily from market share gains;
|
|
•
|
receiving the estimated remaining revenue of approximately $14 billion from existing signed contracts, assuming the exercise of all options relating to such contracts and including executed task orders issued under ID/IQ contracts, and estimated revenue from follow-on work for the existing signed contracts;
|
|
•
|
successfully winning at least 90% of existing signed contracts that are up for renewal or re-compete;
|
|
•
|
successfully winning 29% of new business opportunities; and
|
|
•
|
with respect to the Management Projections, an anticipated annual tax rate of 25.2%.
|
|
|
| |
For Fiscal Year
|
|||||||||||||||
|
(dollars in millions)
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |
2025E
|
| |
2026E
|
|
Total Revenue
|
| |
$4,535
|
| |
$3,945
|
| |
$3,994
|
| |
$4,153
|
| |
$4,320
|
| |
$4,492
|
|
Adjusted EBITDA(1)
|
| |
$689
|
| |
$591
|
| |
$582
|
| |
$595
|
| |
$609
|
| |
$624
|
|
Capital Expenditures(2)
|
| |
$162
|
| |
$112
|
| |
$88
|
| |
$79
|
| |
$77
|
| |
$76
|
|
(1)
|
Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) is a non-GAAP measure. Our calculation of Adjusted EBITDA may differ from other companies and excludes the following items: interest, income taxes, depreciation and amortization, restructuring, separation, transaction and integration-related cost and other non-recurring items. Adjusted EBITDA differs from Adjusted EBITDA disclosed in the Company’s reports filed with the SEC (“Reported Adjusted EBITDA”) because Reported Adjusted EBITDA does not include expenses associated with stock-based compensation.
|
|
(2)
|
Capital expenditures include purchases of property, equipment and software, finance lease payments and outsourcing contract payments.
|
|
|
| |
For Fiscal Year
|
||||||||||||||||||
|
(dollars in millions)
|
| |
2021E
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |
2025E
|
| |
2026E
|
| |
2027E and
beyond
|
|
Deferred tax assets(1)
|
| |
$46
|
| |
$46
|
| |
$44
|
| |
$28
|
| |
$20
|
| |
$15
|
| |
$46
|
|
(1)
|
Represents deferred tax assets relating to net operating losses subject to applicable statutory limitations, tax amortization of intangibles and goodwill and tax depreciation of fixed assets, but excluding deferred tax liabilities. Assumes a tax rate of 28%. The Company’s management directed Goldman Sachs and Stone Key to assume a tax rate of 25.2% in connection with rendering their respective fairness opinions.
|
|
Name of Section 16(b) Reporting Person
|
| |
Number of
Shares
Owned
|
| |
Number of
Company
Stock
Options
Outstanding
|
| |
Number of
Company
RSUs
Outstanding
|
| |
Number of
Director
RSUs
Outstanding
|
| |
Number of
Company
PSUs
Outstanding
|
|
John M. Curtis
|
| |
57,066
|
| |
—
|
| |
181,912
|
| |
—
|
| |
358,838
|
|
John P. Kavanaugh
|
| |
65,827
|
| |
—
|
| |
77,371
|
| |
—
|
| |
92,824
|
|
James L. Gallagher
|
| |
8,298
|
| |
12,742
|
| |
32,390
|
| |
—
|
| |
36,322
|
|
Tammy M. Heller
|
| |
3,232
|
| |
—
|
| |
32,704
|
| |
—
|
| |
35,715
|
|
William G. Luebke
|
| |
6,785
|
| |
—
|
| |
27,286
|
| |
—
|
| |
28,335
|
|
Sondra L. Barbour
|
| |
13,400
|
| |
—
|
| |
—
|
| |
6,800
|
| |
—
|
|
Sanju K. Bansal
|
| |
13,400
|
| |
—
|
| |
—
|
| |
6,800
|
| |
—
|
|
Lisa S. Disbrow
|
| |
13,400
|
| |
—
|
| |
—
|
| |
6,800
|
| |
—
|
|
Glenn A. Eisenberg
|
| |
7,600
|
| |
—
|
| |
—
|
| |
6,800
|
| |
—
|
|
Pamela O. Kimmet
|
| |
13,400
|
| |
—
|
| |
—
|
| |
6,800
|
| |
—
|
|
Ramzi M. Musallam
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
Philip O. Nolan
|
| |
59,067
|
| |
—
|
| |
—
|
| |
6,800
|
| |
—
|
|
Betty J. Sapp
|
| |
1,600
|
| |
—
|
| |
—
|
| |
6,800
|
| |
—
|
|
Michael E. Ventling
|
| |
19,400
|
| |
—
|
| |
—
|
| |
6,800
|
| |
—
|
|
•
|
A lump-sum cash payment equal to two times (three times for Mr. Curtis) the sum of (i) the named executive officer’s annual base salary and (ii) the greater of (A) the average annual bonus for the named executive officer, pursuant to a then existing plan of the Company, (x) over the three most recent fiscal years preceding the year in which the date of termination occurs for which a bonus was paid or deferred or for which the amount of bonus, if any, was finally determined; or (y) for a named executive officer employed by the Company for less than the three fiscal years to which reference is made in (x), over the most recent complete fiscal year or years prior to the date of termination during which such named executive officer was employed and for which a bonus was paid or for which the amount of bonus, if any, was finally determined; or (B) the named executive officer’s target annual bonus for the fiscal year during which the date of termination occurs.
|
|
•
|
Continuation of disability, health, life and accidental death and dismemberment benefits substantially similar to those benefits the named executive officer was receiving prior to the Merger, or, if greater, immediately prior to the notice of termination for a period of 24 months’ (36 months’ for Mr. Curtis).
|
|
Name
|
| |
Cash ($)(1)
|
| |
Equity ($)(2)
|
| |
Welfare
Benefits ($)(3)
|
| |
Total ($)(4)
|
|
John M. Curtis
|
| |
6,937,500
|
| |
15,871,052
|
| |
32,517
|
| |
22,841,069
|
|
John P. Kavanaugh
|
| |
2,104,725
|
| |
4,995,282
|
| |
32,218
|
| |
7,132,225
|
|
James L. Gallagher
|
| |
1,202,587
|
| |
2,016,785
|
| |
31,437
|
| |
3,250,809
|
|
Tammy M. Heller
|
| |
1,138,371
|
| |
2,008,098
|
| |
—
|
| |
3,146,469
|
|
William G. Luebke
|
| |
993,840
|
| |
1,632,545
|
| |
31,437
|
| |
2,657,822
|
|
(1)
|
As described above in “Special Factors — Interests of Executive Officers and Directors of the Company in the Merger —Change in Control Severance Agreements,” the cash payments to the named executive officers consists of a lump-sum cash payment equal to two times (three times for Mr. Curtis) the sum of (i) the named executive officer’s annual base salary and (ii) the greater of (A) the average annual bonus for the named executive officer, whether pursuant to a then existing plan of the Company, (x) over the three most recent fiscal years preceding the year in which the date of termination occurs for which a bonus was paid or deferred or for which the amount of bonus, if any, was finally determined; or (y) for a named executive officer employed by the Company for less than the three fiscal years to which reference is made in (x), over the most recent complete fiscal year or years prior to the date of termination during which such named executive officer was employed and for which a bonus was paid or for which the amount of bonus, if any, was finally determined; or (B) the named executive officer’s target annual bonus for the fiscal year during which the date of termination occurs.
|
|
Name
|
| |
Base Salary
Severance ($)
|
| |
Annual Cash
Bonus
Severance ($)
|
|
John M. Curtis
|
| |
2,775,000
|
| |
4,162,500
|
|
John P. Kavanaugh
|
| |
1,052,363
|
| |
1,052,363
|
|
James L. Gallagher
|
| |
707,404
|
| |
495,183
|
|
Tammy M. Heller
|
| |
669,630
|
| |
468,741
|
|
William G. Luebke
|
| |
621,150
|
| |
372,690
|
|
(2)
|
As described herein in “The Merger Agreement —The Merger; Merger Consideration —Treatment of Equity Compensation Awards,” the equity amounts consist of the accelerated vesting and payment of unvested Company RSUs, Company PSUs (assuming achievement of target performance). The amounts shown are based on the number of such equity-based awards held by each named executive officer as of March 18, 2021, the latest practicable date to determine such amounts before the filing of this proxy statement. The amounts shown do not attempt to forecast any grants, additional issuances, dividends, additional deferrals or forfeitures of equity-based awards following the date of this proxy statement. Depending on when the closing date occurs, certain equity-based awards will vest in accordance with their terms.
|
|
Name
|
| |
Company
RSUs ($)
|
| |
Company
PSUs ($)
|
|
John M. Curtis
|
| |
5,339,156
|
| |
10,531,895
|
|
John P. Kavanaugh
|
| |
2,270,868
|
| |
2,724,414
|
|
James L. Gallagher
|
| |
950,705
|
| |
1,066,080
|
|
Tammy M. Heller
|
| |
959,892
|
| |
1,048,206
|
|
William G. Luebke
|
| |
800,883
|
| |
831,662
|
|
(3)
|
Upon a qualifying termination of employment, the Company provides 24 months’ (36 months’ for Mr. Curtis) continuation of disability, health, life and accidental death and dismemberment benefits substantially similar to those benefits the named executive officer was receiving prior to the Merger, or, if greater, immediately prior to the notice of termination.
|
|
(4)
|
The amounts in this column represent the total of all compensation in columns (1), (2) and (3).
|
|
Name
|
| |
Single-Trigger
Payments ($)
|
| |
Double-Trigger
Payments ($)
|
|
John M. Curtis
|
| |
15,871,052
|
| |
6,970,017
|
|
John P. Kavanaugh
|
| |
4,995,282
|
| |
2,136,943
|
|
James L. Gallagher
|
| |
2,016,785
|
| |
1,234,024
|
|
Tammy M. Heller
|
| |
2,008,098
|
| |
1,138,371
|
|
William G. Luebke
|
| |
1,632,545
|
| |
1,025,277
|
|
•
|
a bank or other financial institution;
|
|
•
|
a tax-exempt organization;
|
|
•
|
a retirement plan or other tax-deferred account;
|
|
•
|
a partnership, S corporation or other pass-through entity (or an investor in a partnership, S corporation or other pass-through entity);
|
|
•
|
a person holding a direct or indirect interest in Parent or Merger Sub;
|
|
•
|
an insurance company;
|
|
•
|
a mutual fund;
|
|
•
|
a real estate investment trust;
|
|
•
|
a dealer or broker in stocks and securities or in currencies;
|
|
•
|
a trader in securities that elects mark-to-market treatment;
|
|
•
|
a stockholder subject to the alternative minimum tax provisions of the Code;
|
|
•
|
a stockholder that received the Shares through the exercise of an employee stock option, through a tax qualified retirement plan or otherwise as compensation;
|
|
•
|
a person that has a functional currency other than the U.S. dollar;
|
|
•
|
a person that is required to report income no later than when such income is reported in an “applicable financial statement”;
|
|
•
|
a person that holds the Shares as part of a hedge, straddle, constructive sale, conversion or other integrated transaction; and
|
|
•
|
certain former U.S. citizens or long-term residents.
|
|
•
|
an individual who is a citizen or resident in the United States;
|
|
•
|
a corporation (or any other entity or arrangement treated as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States or any state thereof or the District of Columbia;
|
|
•
|
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
|
|
•
|
a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (ii) the trust has validly elected to be treated as a “United States person” under applicable Treasury regulations.
|
|
•
|
the execution and delivery of definitive documentation consistent with the Debt Commitment Letter;
|
|
•
|
the absence, since January 27, 2021 of a Company material adverse effect (which, for purposes of the Debt Commitment Letter, is defined as in the Merger Agreement) if and to the extent that Merger Sub (or any of its applicable affiliates) has the right not to consummate the Merger or to terminate its (and all of its affiliates’) obligations under the Merger as a result of such Company material adverse effect;
|
|
•
|
the payment of all applicable fees and expenses;
|
|
•
|
the delivery of certain audited and unaudited financial statements of the Company;
|
|
•
|
receipt by the lenders of documentation and other information required under applicable “know your customer” and anti-money laundering rules and regulations (including the PATRIOT Act);
|
|
•
|
the delivery of customary closing documents; and
|
|
•
|
the accuracy of certain representations and warranties in the Merger Agreement and specified representations and warranties in the definitive debt documents.
|
|
Description
|
| |
Amount
(in thousands)
|
|
Financial advisory fees and expenses
|
| |
$60,720
|
|
Legal fees and expenses
|
| |
$10,000
|
|
Accounting and tax advisory fees
|
| |
$192
|
|
SEC filing fees
|
| |
$529
|
|
Printing, proxy solicitation and mailing costs
|
| |
$1,212
|
|
Miscellaneous
|
| |
$624
|
|
Total
|
| |
$73,277
|
|
•
|
have been qualified by certain disclosures that were made to the other party in connection with the negotiation of the Merger Agreement, which disclosures are not reflected in the Merger Agreement; and
|
|
•
|
may apply standards of materiality in a way that is different from what may be viewed as material by you or other investors.
|
|
•
|
each Share that is issued and held by the Company or any of the Company’s subsidiaries, and each Share that is owned by Parent, Merger Sub or any of their respective wholly owned subsidiaries, in each case immediately prior to the Effective Time, will automatically be canceled and retired and will cease to exist, and no consideration will be issued or delivered in exchange therefor;
|
|
•
|
each Share issued and outstanding immediately prior to the Effective Time (excluding any Shares described in the preceding bullet) will be converted automatically at the Effective Time into the right to receive the Merger Consideration, without interest thereon and less any applicable withholding taxes. All such Shares, when so converted, will cease to be outstanding and will automatically be canceled and extinguished and cease to exist; and
|
|
•
|
each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time will be converted into and will represent one validly issued fully paid and nonassessable share of common stock of the Surviving Corporation and will constitute the only outstanding shares of capital stock of the Surviving Corporation.
|
|
•
|
the articles of incorporation of the Company as in effect immediately prior to the Effective Time will be amended and restated to read in its entirety as set forth in a form to be mutually agreed between Parent and the Company and, as so amended and restated, will be the articles of incorporation of the Surviving Corporation, until thereafter amended in accordance with its terms, the terms of the Merger Agreement and applicable law;
|
|
•
|
the bylaws of the Company as in effect immediately prior to the Effective Time will be amended and restated to read in their entirety as set forth in a form to be mutually agreed between Parent and the Company and, as so amended and restated, will be the bylaws of the Surviving Corporation, until thereafter amended in accordance with the terms of the articles of incorporation of the Surviving Corporation, such bylaws, the terms of the Merger Agreement and applicable law;
|
|
•
|
the officers of the Company will become and constitute the only officers of the Surviving Corporation, and such officers will serve until their successors have been duly elected or appointed and qualified or until their death, resignation or removal in accordance with the organizational documents of the Surviving Corporation; and
|
|
•
|
the directors of Merger Sub will become and constitute the only directors of the Surviving Corporation, and such directors will serve until their successors have been duly elected or appointed and qualified or until their death, resignation or removal in accordance with the organizational documents of the Surviving Corporation.
|
|
A.
|
changes in general economic, regulatory, political, business, financial, congressional appropriation or market conditions in the United States or elsewhere in the world;
|
|
B.
|
changes in the credit, debt, financial or capital markets or in interest or exchange rates, in each case, in the United States or elsewhere in the world;
|
|
C.
|
changes in conditions generally affecting the industry in which the Company and its subsidiaries operate, including changes in governmental funding level or program changes;
|
|
D.
|
any outbreak of any military conflict, declared or undeclared war, armed hostilities, or acts of foreign or domestic terrorism (including cyber-terrorism);
|
|
E.
|
any epidemic, plague, pandemic or other outbreak of illness or public health event (including COVID-19), hurricane, flood, tornado, earthquake or other natural disaster or act of God (or any worsening of the foregoing), including, in each case, the response of governmental and non-governmental entities (including COVID-19 Measures);
|
|
F.
|
any failure by the Company or any of its subsidiaries to meet any internal or external projections or forecasts, any change in the market price or trading volume of the Shares or any change in the Company’s credit rating (but excluding, in each case, the underlying causes of such failure or decline, as applicable, unless such underlying causes would otherwise be excepted from this definition);
|
|
G.
|
the public announcement, pendency or performance of the transactions contemplated by the Merger Agreement or the identity of, or any facts or circumstances relating to Parent, the Merger Sub or their respective affiliates, including, in any such case, the impact thereof on relationships, contractual or otherwise, with customers, suppliers, vendors, lenders, investors, licensors, licensees, venture partners or employees (other than, in each case, for the purposes of any representation or warranty regarding our general authority and standing, the absence of conflicts and necessary consents or certain employee benefits matters);
|
|
H.
|
changes in, including any actions taken to comply with any change in, applicable laws or the interpretation thereof;
|
|
I.
|
changes in, including any actions taken to comply with any change in, GAAP or any other applicable accounting standards or the interpretation thereof;
|
|
J.
|
any action required or specifically permitted to be taken by the Company pursuant to the terms of the Merger Agreement or taken at the prior written direction of Parent or Merger Sub;
|
|
K.
|
any breach of the Merger Agreement by Parent or Merger Sub; or
|
|
L.
|
any litigation or other proceeding brought by any stockholder of the Company (or a derivative or similar claim) in connection with the Merger Agreement or any of the transactions contemplated thereby to the extent asserting breach of fiduciary duty, inadequate disclosure or violations of applicable securities law claims;
|
|
A.
|
issue, sell, grant options or rights to purchase or receive, pledge, or authorize or propose the issuance, sale, grant of options or rights to purchase or pledge, or otherwise permit to become outstanding, or authorize the creation of, any additional equity or any additional rights other than the issuance of shares in respect of the vesting, settlement or exercise of compensatory share rights outstanding as of the date of the Merger Agreement;
|
|
B.
|
(i) split, combine or reclassify any of its equity interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for its equity interests, or (ii) repurchase, redeem or otherwise acquire, or permit any subsidiary to purchase, redeem or otherwise acquire, any membership, partnership or other equity interests or rights, except as required by the terms of the Company stock plan and the director stock plan and any related award agreements or to satisfy any tax withholding obligations of the holder thereof or as required by the terms of its securities outstanding on the date of the Merger Agreement (or granted following such date in accordance with the Merger Agreement) by any Company benefit plan;
|
|
C.
|
(i) sell, lease, sublease, license, sublicense, abandon, waive, relinquish, transfer, pledge, abandon, assign, swap, mortgage or otherwise dispose of or subject to any lien all or any material portion of its assets, businesses or properties other than (A) any sales, leases, or dispositions in the ordinary course of business consistent with past practice, including the factoring of receivables in the ordinary course of business consistent with past practice or (B) any distributions expressly permitted under Item D below, (ii) acquire (by merger or otherwise) or lease any assets or all or any portion of (or interests in) the business or property of any other entity other than in the ordinary course of business consistent with past practice, (iii) merge, consolidate or enter into any other business combination transaction with any
|
|
D.
|
make or declare dividends or distributions to (i) the holders of Company common stock or any Company subsidiary or (ii) any other equityholders of the Company or any Company subsidiary (other than any dividend or distribution from a wholly owned Company subsidiary to the Company or to any other wholly owned Company subsidiary); provided, that, per the confidential disclosure letter to the Merger Agreement, the Company is permitted to declare and pay its regular quarterly dividends to holders of Company common stock consistent with past practice through the Closing Date;
|
|
E.
|
amend the Company’s or any Company subsidiary’s organizational documents as in effect on the date of the Merger Agreement;
|
|
F.
|
enter into any material contract or contract that would constitute a Company Specified Contract if in effect as of the date of the Merger Agreement, in each case, that is outside the ordinary course of business;
|
|
G.
|
modify, amend, terminate or assign, or waive or assign any rights under, any Company Specified Contract, in each case, outside the ordinary course of business;
|
|
H.
|
waive, release, assign, settle or compromise any material proceeding or compromise any proceeding if such settlement or compromise (i) involves a material conduct remedy or material injunctive or similar relief, (ii) involves an admission of criminal wrongdoing by the Company or any Company subsidiary or (iii) has in any material respect a restrictive impact on the business of Company or any Company subsidiary;
|
|
I.
|
implement or adopt any change in its GAAP accounting principles, practices or methods, other than as may be required by GAAP;
|
|
J.
|
terminate, cancel or make any material changes to the structure, limits or terms and conditions of any insurance policies, including allowing the Company insurance policies to expire without renewing such insurance policies or obtaining comparable replacement coverage;
|
|
K.
|
(i) make, change or rescind in any elections relating to taxes, (ii) settle or compromise any proceeding, audit or controversy relating to taxes, (iii) amend any tax return, (iv) enter into any closing agreement with respect to any tax, (v) surrender any right to claim a refund or (vi) change any of its methods of reporting income or deductions for federal income tax purposes, except, in each case, in the ordinary course of business consistent with past practice;
|
|
L.
|
(i) establish, adopt, enter into, terminate or amend, or take any action to accelerate the vesting or payment of any compensation or benefits under, any Company benefit plan, except for (A) amendments to Company benefit plans made to comply with applicable law and (B) establishing annual incentive targets and performance goals, in the ordinary course of business consistent with past practice, in respect of the fiscal year ending April 1, 2022 for purposes of the Company benefit plans set forth in the confidential disclosure letter to the Merger Agreement, (ii) grant to any current or former director, officer, employee, contractor or consultant any material increase in compensation, bonus or fringe or other benefits, other than with respect to employees holding a position below vice president in the ordinary course of business consistent with past practice or in connection with the Company’s or any of its subsidiaries’ annual merit-based compensation review process or discretionary bonus practices, (iii) grant to any current or former director, officer, employee, contractor or consultant any material increase in change in control, retention, severance or termination pay, except for grants to employees holding a position below vice president in the ordinary course of business consistent with past practice, (iv) enter into any employment, consulting, change in control, retention or severance agreement with any current or former director, officer, employee, contractor or consultant, except for agreements with employees holding a position below vice president entered into in the ordinary course of business consistent with past practice, (v) hire any person to be an employee of the Company or any of its subsidiaries with a position equivalent to, or more senior than, vice president, (vi) terminate the employment of any current employee with a position equivalent to, or more senior than, vice president if such termination would result in the right to receive payment of material change in control, severance or termination benefits, provided, however, that the Company or a Company subsidiary may
|
|
M.
|
(i) incur, assume, guarantee or otherwise become liable for any indebtedness (directly, contingently or otherwise), other than borrowings under existing revolving credit facilities in the ordinary course of business consistent with past practice in an amount not to exceed $10,000,000, (ii) redeem, repurchase, cancel or otherwise acquire any indebtedness (directly, contingently or otherwise), (iii) other than with respect to the existing revolving credit facilities, create any material lien that is not a permitted lien on its property or the property of any Company subsidiary in connection with any pre-existing indebtedness, new indebtedness or lease or (iv) make or commit to make any capital expenditures (including payments on financing leases), other than (A) capital expenditures for property, plant and equipment in an amount not to exceed $10,000,000 in the aggregate and (B) commitments and payments on financing leases in the ordinary course of business consistent with past practice;
|
|
N.
|
enter into any transaction or contracts with any affiliate or other person that would be required to be disclosed by the Company under Item 404 of SEC Regulation S-K;
|
|
O.
|
authorize, recommend, propose or announce an intention to adopt a plan of complete or partial dissolution or liquidation;
|
|
P.
|
make any loans, advances or capital contributions to, or investments in, any person or entity (other than the Company or any wholly owned subsidiary) other than loans, advances or capital contributions in the form of trade credit granted to customers in the ordinary course of business consistent with past practice;
|
|
Q.
|
except as permitted by Item C above, (i) form any subsidiary or acquire any equity interest in any other person (other than in accordance with contracts in effect on the date of the Merger Agreement), (ii) enter into any new material line of business, or (iii) open a new office of the Company or any of the Company subsidiaries in any country where neither the Company nor any of the Company subsidiaries has an office as of the date of the Merger Agreement;
|
|
R.
|
except as permitted by Item C above, other than the Merger, merge, consolidate, liquidate, dissolve, restructure, recapitalize, statutorily convert or otherwise reorganize the Company or any Company subsidiary with any Person (including any other Company subsidiary) or adopt a plan or resolution providing for any such transaction; provided, that for the avoidance of doubt, this Item R will not restrict the Company or any Company subsidiary from undertaking any employee restructuring or reorganization; or
|
|
S.
|
agree or commit to do anything prohibited in this section of this proxy statement entitled “Covenants Related to the Company’s Conduct of Business.”
|
|
•
|
the Company will and will cause the Company subsidiaries and its and their respective directors, officers and employees holding the position of vice president or more senior position, and will use reasonable best efforts to cause its and their respective other employees and their other representatives
|
|
•
|
the Company will not and will cause the Company subsidiaries and its and their respective, directors, officers and employees holding the position of vice president or more senior position not to, and will use reasonable best efforts to cause its and their respective other employees and their other representatives not to, directly or indirectly, (A) initiate, solicit or knowingly encourage or knowingly facilitate the making of any Company Acquisition Proposal or (B) other than informing third parties of the existence of the restrictions described in this section of the proxy statement entitled “No Solicitation by the Company”, engage in, continue or otherwise participate in negotiations or discussions with, or furnish any non-public information concerning the Company or any of its subsidiaries to, any third party in connection with a Company Acquisition Proposal. Notwithstanding anything to the contrary contained in the Merger Agreement, the Company will be permitted to grant waivers of, and not enforce, any standstill provision or similar provision that has the effect of prohibiting the counterparty thereto from making a Company Acquisition Proposal.
|
|
•
|
the Company has provided to Parent three business days’ prior written notice, which notice (the “Company Superior Proposal Notice”) (A) shall not constitute a Company Change in Recommendation, advised Parent that the Company intends to take such action, and (B) included (1) the material terms and conditions of any such Company Superior Proposal, (2) an unredacted copy of the Company Alternative Acquisition Agreement in respect of such Company Acquisition Proposal, and (3) an unredacted copy of any other contracts to be entered into in connection with such Company Acquisition Proposal that the Board determined were material to its decision that such Company Acquisition Proposal constituted a Company Superior Proposal;
|
|
•
|
during such three-business day period, if requested in writing by Parent in good faith, the Company and its representatives engaged in good faith negotiations with Parent regarding changes to the terms of the Merger Agreement intended by Parent to cause such Company Acquisition Proposal to no longer constitute a Company Superior Proposal; and
|
|
•
|
the Board has considered any adjustments to the Merger Agreement proposed in writing by Parent by 11:59 p.m., New York City time, on the last day of such three-business day period and has determined in good faith (after consultation with its financial advisors and outside counsel) that the Company Acquisition Proposal would continue to constitute a Company Superior Proposal if such proposed changed terms were to be given effect, and that the failure to make the Company Change in Recommendation or terminate the Merger Agreement would reasonably be expected to be inconsistent with the fiduciary obligations of the Board under applicable law; provided, however, that any (1) material revisions to the terms of a Company Superior Proposal or (2) material revisions to a Company Acquisition Proposal that the Board had determined no longer constitutes a Company Superior Proposal, will constitute a new Company Acquisition Proposal and will in each case require the Company to deliver to Parent a new Company Superior Proposal Notice, except that the references to three business days in this bullet and the preceding two bullets will be deemed to be two business days.
|
|
•
|
maintain in effect the Debt Commitment Letter (or any permitted replacement, amended, modified or alternative financing);
|
|
•
|
negotiate definitive agreements with respect to the debt financing, which we refer to as the Definitive Documents, on the terms and conditions (including any flex provisions) contained in the Debt Commitment Letter or on such other terms that would not be prohibited by the Merger Agreement and shall deliver to the Company a copy thereof as promptly as practicable, and upon the effectiveness thereof, maintain in effect the Definitive Documents;
|
|
•
|
comply with their respective obligations under the Debt Commitment Letter and satisfy on a timely basis all conditions precedent to the availability of the debt financing set forth in the Debt Commitment Letter and the Definitive Documents that are within its control;
|
|
•
|
fully enforce their rights under the Debt Commitment Letter and the Definitive Documents; and
|
|
•
|
arrange for the debt financing to be available for Parent and Merger Sub to draw upon and consummate at or prior to the Effective Time.
|
|
•
|
adds new or expands upon the conditions precedent to the funding of the debt financing as set forth in the Debt Commitment Letter;
|
|
•
|
would reduce the aggregate amount of the debt financing provided for under the Debt Commitment Letter;
|
|
•
|
would limit the rights and remedies of Parent as against the lenders under the Debt Commitment Letter; or
|
|
•
|
would otherwise prevent, delay or impair the consummation of the transactions contemplated by the Merger Agreement.
|
|
•
|
any actual or threatened in writing breach or default (or any event or circumstance that, with or without notice, lapse of time or both, would reasonably be expected to give rise to any breach or default) by any party to the Debt Commitment Letter or the Definitive Documents;
|
|
•
|
any actual or threatened in writing withdrawal, repudiation or termination of the debt financing by any of the lenders under the Debt Commitment Letter;
|
|
•
|
any material dispute or disagreement between or among any of the parties to the Debt Commitment Letter or the Definitive Documents relating to, or otherwise potentially affecting, the amount or the availability of the debt financing on the Closing Date or satisfaction of the conditions thereunder; and
|
|
•
|
any amendment or modification of, or waiver under, the Debt Commitment Letter or the Definitive Documents that would reasonably be expected to delay or prevent the Closing or make the funding of the debt financing less likely or adversely impact the Company’s ability to enforce its rights under the Debt Commitment Letter or to consummate the transactions contemplated by the Merger Agreement.
|
|
•
|
furnishing to Parent, the lenders under the Debt Commitment Letter or any other debt financing sources, as promptly as practicable following Parent’s request, with such pertinent and customary reasonably available information necessary to syndicate or complete the underwriting or private placement of the debt financing as may be reasonably requested by any of the foregoing persons regarding the business, operations, financial projections and prospects of the Company and its subsidiaries as is customary for investment grade public companies in connection with the arrangement or marketing of financings such as the Debt Commitment Letter;
|
|
•
|
furnishing to Parent the most recent financial statements contained in the reports, schedules, forms, statements and other documents filed by the Company with the SEC;
|
|
•
|
reasonably assisting with the preparation of customary offering documents and customary marketing materials, including confidential information memoranda, offering memoranda and materials for rating agency presentations, lender and investor presentations, bank syndication materials, roadshow presentations and similar documents required in connection with the debt financing by providing information about the business of the Company and its subsidiaries reasonably available to the Company and its subsidiaries and, in each case, executing customary authorization and management representation letters in connection therewith;
|
|
•
|
upon reasonable advance notice, participating in a reasonable number of meetings, presentations, road shows, sessions with rating agencies in connection with the debt financing, due diligence sessions and drafting sessions, each at times and dates reasonably acceptable to the Company and its subsidiaries;
|
|
•
|
assisting in the preparation of the definitive financing documentation contemplated by the debt financing;
|
|
•
|
facilitating in the provision of guarantees and collateral of the Company and its subsidiaries, in each case, related to the debt financing;
|
|
•
|
obtaining such consents, acknowledgements, authorizations, approvals and instruments reasonably requested by Parent to permit the consummation of the debt financing;
|
|
•
|
providing at least three business days prior to the closing of the debt financing all documentation and other information required by applicable beneficial ownership, “know your customer” and anti-money laundering rules and regulations, to the extent reasonably requested at least 10 business days prior to the closing of the debt financing;
|
|
•
|
cooperating with, and taking all actions reasonably requested by, Parent in order to facilitate the termination and payoff of the Company’s existing credit facility and the release of liens thereunder; and
|
|
•
|
to the extent applicable, (i) providing customary financial information as reasonably requested by Parent to enable Parent to prepare pro forma financial statements, (ii) assisting in the preparation of offering documents and memoranda and “road show” presentations, and assisting Parent in the preparation of pro forma financial statements and (iii) causing the independent accountants of the Company to provide assistance to Parent, including providing comfort letter, participating in accounting due diligence sessions and assistance in connection with providing customary review of interim financial statements.
|
|
•
|
take or cause to be taken all actions, and to do or cause to be done all things, necessary, proper or advisable to cause the conditions to the Closing to be satisfied as promptly as reasonably practicable and to consummate and make effective, as promptly as reasonably practicable, the Merger, including:
|
|
•
|
filing any Notification and Report Form required pursuant to the HSR Act within 10 business days following the execution of the Merger Agreement and to request early termination of the applicable waiting period;
|
|
•
|
submitting the documentation required to be submitted to the Defense Counterintelligence and Security Agency of the United States Department of Defense or any other United States cognizant security agency in accordance with Paragraph 1-302(g) of the National Industrial Security Program Operating Manual;
|
|
•
|
submitting any required notices related to the Company’s Statement of Registration on file with the United States Department of State’s Directorate of Defense Trade Controls (“DDTC”) in respect of the transactions contemplated by the Merger Agreement in accordance with the International Traffic in Arms Regulations;
|
|
•
|
preparing and submitting any requests to amend or novate licenses or other authorizations issued by DDTC or the U.S. Department of Commerce’s Bureau of Industry and Security that may be necessary as a consequence of the transactions contemplated by the Merger Agreement; and
|
|
•
|
developing, submitting, and implementing any mitigation plans reasonably required to address an Organizational Conflict of Interest (as defined in Part 9 of the Federal Acquisition Regulation), including by taking the actions identified in the confidential disclosure letter to the Merger Agreement;
|
|
•
|
obtain promptly all consents, clearances, expirations or terminations of waiting periods, registrations, authorizations and other confirmations from any governmental entity or third party necessary, proper or advisable to consummate the Merger; and
|
|
•
|
defend any proceedings, whether judicial or administrative, challenging the Merger Agreement or the consummation of the Merger, including seeking to have any stay or temporary restraining order entered by any court or other governmental entity vacated or reserved.
|
|
•
|
cooperate with each other in connection with any filing to or submission with any governmental entity in connection with the transactions contemplated by the Merger Agreement and in connection with any proceeding by or before any governmental entity relating to the Merger, including any proceeding initiated by a private person;
|
|
•
|
promptly inform the other party of (and supply to the other party) any material communication received by such party from, or given by such party to any governmental entity and any material communication received or given in connection with any proceeding by a private person, in each case regarding the Merger;
|
|
•
|
permit the other party to review in advance and incorporate their reasonable comments in any communication to be given by it to any governmental entity with respect to obtaining any investigations or reviews under any law in connection with the transactions contemplated by the Merger Agreement; and
|
|
•
|
to the extent practicable, consult with the other party in advance of any material meeting, written communications or teleconference with any governmental entity or, in connection with any proceeding by a private person, with any other person and give the other party the opportunity to attend and participate in such meetings and teleconferences.
|
|
•
|
selling, divesting or otherwise disposing of or holding separate any of their or their affiliates’ assets, properties, products, rights, services, businesses, or voting securities; and
|
|
•
|
terminating, modifying or extending any existing relationships and contractual rights and obligations of the parties or their affiliates. Notwithstanding anything in the Merger Agreement to the contrary, the parties will not be required to take any action with respect to any order or any applicable law or in order to obtain any approval or resolve any objection or impediment under any antitrust law that is not conditioned upon the consummation of the Merger.
|
|
•
|
impose any delay beyond five business days prior to the Outside Date in the obtaining of, or increase the risk of not obtaining, any consent, approval, authorization, declaration, waiver, license, franchise, permit, certificate or order of any governmental entity necessary to consummate the transactions contemplated by the Merger Agreement or the expiration or termination of any applicable waiting period;
|
|
•
|
increase the risk of any governmental entity entering an order prohibiting the consummation of the transactions contemplated by the Merger Agreement; or
|
|
•
|
delay the consummation of the transactions contemplated by the Merger Agreement beyond five Business Days prior to the Outside Date.
|
|
•
|
the Company stockholder approval has been received in accordance with applicable law and the Company’s organizational documents (including its articles of incorporation and bylaws);
|
|
•
|
no governmental entity has issued any judgment or taken any action, in each case, preventing, making illegal, restraining, enjoining or prohibiting the consummation of the transactions contemplated by the Merger Agreement (including the Merger) and no law is in effect that makes the consummation of such transactions illegal or otherwise prohibited, restrained or prevented; and
|
|
•
|
the waiting period applicable to the transactions contemplated by the Merger Agreement under the HSR Act has expired or been terminated.
|
|
•
|
the representations and warranties of Parent and Merger Sub contained in the Merger Agreement being true and correct as of the date of the Merger Agreement and as of the Closing Date, as if made as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “Parent Material Adverse Effect” set forth in any such representation or warranty) would not reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect;
|
|
•
|
each and all of the agreements and covenants of Parent and the Parent subsidiaries to be performed and complied with pursuant to the Merger Agreement on or prior to the Effective Time have been duly performed and complied with in all material respects; and
|
|
•
|
the Company shall have received a certificate of Parent signed by an executive officer of Parent, dated the Closing Date, confirming that the conditions described in the preceding bullets have been satisfied.
|
|
•
|
the representations and warranties of the Company:
|
|
•
|
contained in the Merger Agreement (other than representations and warranties regarding certain elements of our organization and qualification (solely with respect to the Company), certain elements of our capitalization, certain elements of our general authority and standing, the absence of a Company Material Adverse Effect and the absence of brokers’ and advisors’ fees) being true and correct as of the date of the Merger Agreement and as of the Closing Date, as if made as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” set forth in any such representation or warranty) would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect;
|
|
•
|
regarding certain elements of our organization and qualification (solely with respect to the Company) and certain elements of our general authority and standing being true and correct in all material respects as of the date of the Merger Agreement and as of the Closing Date, as if made as of such time (except to the extent expressly made as of an earlier date, in which case as of such date);
|
|
•
|
regarding certain elements of our capitalization and the absence of brokers’ and advisors’ fees being true and correct as of the date of the Merger Agreement and as of the Closing Date, as if made as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except for any immaterial inaccuracies; and
|
|
•
|
regarding the absence of a Company Material Adverse Effect being true and correct as of the date of the Merger Agreement, as if made as of such time;
|
|
•
|
each and all of the agreements and covenants of the Company and the Company subsidiaries to be performed and complied with pursuant to the Merger Agreement on or prior to the Effective Time have been duly performed and complied with in all material respects;
|
|
•
|
since the date of the Merger Agreement, there shall not have occurred a Company Material Adverse Effect; and
|
|
•
|
Parent shall have received a certificate of the Company signed by an executive officer of the Company, dated the Closing Date, confirming that the conditions described in the preceding bullets have been satisfied.
|
|
(a)
|
by the mutual written consent of the Company and Parent in a written instrument;
|
|
(b)
|
by the Company or Parent if:
|
|
(i)
|
if a governmental entity of competent jurisdiction has issued a final non-appealable judgment or taken any other action, in each case, permanently preventing, making illegal, restraining, enjoining or otherwise prohibiting the consummation of the transactions or if any law that permanently makes consummation of the transactions illegal or otherwise prohibited, restrained or prevented is
|
|
(ii)
|
the Effective Time does not occur on or before the Outside Date; provided, that the right to terminate the Merger Agreement pursuant to the provision described in this subparagraph will not be available to any party whose failure to comply with any of its obligations set forth in the Merger Agreement is the proximate cause of the failure of such condition to be satisfied; or
|
|
(iii)
|
after the final adjournment of the Company stockholder meeting called for the purpose of approving the Merger Agreement, the Company stockholder approval has not been obtained;
|
|
(c)
|
by Parent if the Company has breached or failed to perform or comply with, or there is any inaccuracy of, any of its representations, warranties, covenants or agreements contained in the Merger Agreement, which breach, failure or inaccuracy would result in the failure of certain conditions to the consummation of the Merger described in the first two bullets under the heading “— Additional Parent Closing Conditions” to be satisfied and such breach or failure to perform is either incurable or, if curable, is not cured by the earlier of (A) two business days prior to the Outside Date and (B) 30 days following receipt by the Company of notice of such breach, failure or inaccuracy from Parent; provided that the right to terminate the Merger Agreement pursuant to this subsection shall not be available if Parent is itself in breach of any provision of the Merger Agreement or has failed to perform or comply with, or there is any accuracy of, any of its representations, warranties, covenants or agreements set forth in the Merger Agreement, and which breach, failure or inaccuracy would result in the failure of certain conditions to the consummation of the Merger described in the first two bullets under the heading “— Additional Company Closing Conditions;”
|
|
(d)
|
by the Company if Parent has breached or failed to perform or comply with, or there is any inaccuracy of, any of its representations, warranties, covenants or agreements contained in the Merger Agreement, which breach, failure or inaccuracy would result in the failure of certain conditions to the consummation of the Merger described in the first two bullets under the heading “— Additional Company Closing Conditions” to be satisfied and such breach or failure to perform is either incurable or, if curable, is not cured by the earlier of (A) two business days prior to the Outside Date or (B) 30 days following receipt by Parent of notice of such breach, failure or inaccuracy from the Company; provided that the right to terminate the Merger Agreement pursuant to this subsection shall not be available if the Company is itself in breach of any provision of the Merger Agreement or has failed to perform or comply with, or there is any inaccuracy of, any of its representations, warranties, covenants or agreements set forth in the Merger Agreement, and which breach, failure or inaccuracy would result in the failure of the conditions to the consummation of the Merger described in the first two bullets under the heading “— Additional Parent Closing Conditions;”
|
|
(e)
|
by Parent prior to the time the Company stockholder approval is obtained, if the Board or any committee thereof has effected a Company Change in Recommendation;
|
|
(f)
|
by the Company prior to the time the Company stockholder approval is obtained, if the Board or any committee thereof has effected a Company Change in Recommendation;
|
|
(g)
|
by the Company prior to the time the Company Stockholder approval is obtained, if the Merger Agreement is terminated to enter into a definitive agreement relating to a Company Superior Proposal in accordance with the Merger Agreement, subject to Company’s obligation to concurrently with such termination enter into such definitive agreement and prior to or concurrently with such termination pay the Company Termination Fee to Parent; or
|
|
(h)
|
by the Company, if (i) the closing conditions described under the headings “— Mutual Closing Conditions” and “— Additional Parent Closing Conditions” (other than those closing conditions that by their nature are to be satisfied at the Closing, but subject to such closing conditions being able to be satisfied) have been satisfied or waived (if permissible under applicable laws) at the Closing, (ii) Parent has failed to consummate the Closing within three business days following the date on which the Closing should have occurred pursuant to the Merger Agreement and (iii) the Company has notified
|
|
•
|
(A) a Company Acquisition Proposal is publicly submitted, publicly proposed, publicly disclosed or otherwise publicly communicated to the Board or otherwise generally made known to the stockholders of the Company prior to, and not withdrawn prior to, the date of termination of the Merger Agreement, (B) the Merger Agreement is terminated by the Company or Parent pursuant to the provisions described in subparagraph (b)(ii) or (b)(iii), or by Parent pursuant to the provisions described in subparagraph (c), in each case, under the heading “Termination” above, and (C) the Company enters into a definitive agreement with respect to, or consummates, a Company Acquisition Proposal within 12 months after the date of termination of the Merger Agreement, then the Company will pay (or cause to be paid) the Company Termination Fee to Parent upon the earliest date of when such definitive agreement is executed or such Company Acquisition Proposal is consummated (provided, that, for purposes of this sentence, any reference in the definition of Company Acquisition Proposal to “20%” will be deemed to be a reference to “50%”);
|
|
•
|
the Merger Agreement is terminated by Parent pursuant to the provisions described in subparagraph (e) under the heading “Termination” above, the Company will pay the Company Termination Fee to Parent within two business days of termination of the Merger Agreement; or
|
|
•
|
the Merger Agreement is terminated by the Company pursuant to the provisions described in subparagraph (f) or subparagraph (g) under the heading “Termination” above, the Company will pay the Company Termination Fee to Parent prior to or concurrently with the termination of the Merger Agreement.
|
|
•
|
the Merger Agreement is terminated by the Company pursuant to the provisions described in subparagraph (d) or subparagraph (h) under the heading “Termination” above, Parent will pay the Parent Termination Fee to the Company within two business days of termination of the Merger Agreement; or
|
|
•
|
the Merger Agreement is terminated by Parent pursuant to the provisions described in subparagraph (b)(ii) under the heading “Termination” above and the Company would have been entitled to terminate the Merger Agreement pursuant to the provisions described in subparagraph (d) or subparagraph (h) but for such termination pursuant to the provisions described in subparagraph (b)(ii), Parent will pay, or cause to be paid, to the Company the Parent Termination Fee within two business days of termination of the Merger Agreement.
|
|
•
|
the closing conditions described under the headings “— Mutual Closing Conditions” and “— Additional Parent Closing Conditions” (other than those closing conditions that by their nature are to be satisfied at the Closing, but subject to such closing conditions being able to be satisfied) have been satisfied or waived (if permissible under applicable laws) at the Closing;
|
|
•
|
the debt financing has been funded in accordance with the terms thereof or will be funded in accordance with the terms thereof at the Closing if the equity financing is funded at the Closing;
|
|
•
|
the Company has irrevocably confirmed that (A) it stands ready, willing and able to consummate the Closing and (B) if the equity financing and debt financing are funded, then it would take such actions required of it by the Merger Agreement to cause the Closing to occur; and
|
|
•
|
Parent and Merger Sub have failed to consummate the Closing on or prior to the third business day following such confirmation from the Company.
|
|
•
|
the substantially concurrent consummation of the Merger in accordance with the Merger Agreement in all material respects;
|
|
•
|
the execution and delivery of definitive documentation consistent with the Debt Commitment Letter;
|
|
•
|
the absence, since January 27, 2021, of a Company material adverse effect (which, for purposes of the Debt Commitment Letter, is defined as in the Merger Agreement) if and to the extent that Merger Sub (or any of its applicable affiliates) has the right not to consummate the Merger or to terminate its (and all of its affiliates’) obligations under the Merger as a result of such Company material adverse effect;
|
|
•
|
the payment of all applicable fees and expenses;
|
|
•
|
the delivery of certain audited and unaudited financial statements of the Company;
|
|
•
|
receipt by the lenders of documentation and other information required under applicable “know your customer” and anti-money laundering rules and regulations (including the PATRIOT Act);
|
|
•
|
the delivery of customary closing documents; and
|
|
•
|
the accuracy of certain representations and warranties in the Merger Agreement and specified representations and warranties in the definitive debt documents.
|
|
•
|
in person virtually — you may attend the Special Meeting and cast your vote via the Internet by using the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials;
|
|
•
|
over the Internet by following the instructions provided in the notice of the Special Meeting, or if you requested printed proxy materials, by following the instructions provided with your proxy materials and on your proxy card;
|
|
•
|
by using the toll-free telephone number by following the instructions provided on the Internet voting site, or if you requested printed proxy materials, by following the instructions provided with your proxy materials and on your proxy card or voting instruction card; or
|
|
•
|
if you elected to receive printed proxy materials by mail, by mail by marking your proxy card, dating and signing it, and returning it in the postage-paid envelope provided; please allow sufficient time for mailing if you decide to vote by mail.
|
|
Name
|
| |
Age
|
| |
Position
|
|
John M. Curtis
|
| |
64
|
| |
Director, President and Chief Executive Officer, Chairman
|
|
Sanju K. Bansal
|
| |
55
|
| |
Director
|
|
Sondra L. Barbour
|
| |
58
|
| |
Director
|
|
Lisa S. Disbrow
|
| |
58
|
| |
Director
|
|
Glenn A. Eisenberg
|
| |
59
|
| |
Director
|
|
Pamela O. Kimmet.
|
| |
62
|
| |
Director
|
|
Ramzi M. Musallam
|
| |
52
|
| |
Director
|
|
Philip O. Nolan
|
| |
62
|
| |
Director
|
|
Betty J. Sapp
|
| |
65
|
| |
Director
|
|
Michael E. Ventling
|
| |
59
|
| |
Director
|
|
Name
|
| |
Age
|
| |
Position
|
|
John M. Curtis
|
| |
64
|
| |
President, Chief Executive Officer and Chairman
|
|
John P. Kavanaugh
|
| |
59
|
| |
Senior Vice President and Chief Financial Officer
|
|
James L. Gallagher
|
| |
54
|
| |
Senior Vice President, General Counsel and Secretary
|
|
Tammy M. Heller
|
| |
47
|
| |
Senior Vice President and Chief Human Resources Officer
|
|
William G. Luebke
|
| |
54
|
| |
Senior Vice President, Principal Accounting Officer and Controller
|
|
|
| |
Successor(1)
|
| |
Predecessor
|
||||||||||||||||||
|
|
| |
Three Fiscal Quarters Ended
|
| |
Fiscal Years Ended March 31,
|
| |
Five Months
Ended
March 31,
|
| |
Fiscal Years Ended
October 31,
|
||||||||||||
|
(in millions)
|
| |
January 1,
2021
|
| |
December 31,
2019
|
| |
2020
|
| |
2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
|
Revenue
|
| |
$3,384
|
| |
$3,405
|
| |
$4,504
|
| |
$4,030
|
| |
$2,819
|
| |
$1,073
|
| |
$2,732
|
| |
$2,585
|
|
Income (loss) before taxes
|
| |
67
|
| |
154
|
| |
(730)
|
| |
112
|
| |
199
|
| |
59
|
| |
129
|
| |
(51)
|
|
Income tax expense (benefit)
|
| |
23
|
| |
41
|
| |
(54)
|
| |
40
|
| |
(9)
|
| |
23
|
| |
49
|
| |
(22)
|
|
Net income (loss)
|
| |
44
|
| |
113
|
| |
(676)
|
| |
72
|
| |
208
|
| |
36
|
| |
80
|
| |
(29)
|
|
Earnings (loss) per common share(2)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Basic
|
| |
0.27
|
| |
0.70
|
| |
(4.17)
|
| |
0.44
|
| |
1.46
|
| |
0.25
|
| |
0.56
|
| |
(0.20)
|
|
Diluted
|
| |
0.27
|
| |
0.69
|
| |
(4.17)
|
| |
0.44
|
| |
1.46
|
| |
0.25
|
| |
0.56
|
| |
(0.20)
|
|
Dividends declared per common share
|
| |
0.21
|
| |
0.18
|
| |
0.24
|
| |
0.20
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
(1)
|
The selected historical financial data prior to June 1, 2018 may not be indicative of our performance, financial conditions or results of operations following the Spin-Off and mergers with Vencore Holding Corp. and KGS Holding Corp. The fiscal years 2020, 2019 and 2018 are not directly comparable to periods ending prior to April 1, 2017, which reflect DXC U.S. Public Sector’s financial results before CSC, Hewlett Packard Enterprise Company, Everett SpinCo, Inc. and New Everett Merger Sub Inc. completed the strategic combination of CSC with Hewlett Packard Enterprise Company’s enterprise services business to form DXC Technology Company on April 1, 2017 (“HPES Merger”).
|
|
(2)
|
Earnings per common share information for the fiscal periods ended March 31, 2018 and prior are computed using the 142.43 million shares of Perspecta common stock resulting from the distribution of DXC’s shares of Perspecta common stock on a pro rata basis to the record holders of DXC’s common stock, as Perspecta did not operate as a standalone entity during the period, and therefore, no Perspecta common stock, stock options or other equity awards were outstanding and no dividends were declared or paid by Perspecta.
|
|
|
| |
Successor(1)
|
| |
Predecessor
|
||||||||||||||||||
|
|
| |
January 1,
2021
|
| |
December 31,
2019
|
| |
March 31,
|
| |
March 31,
2017
|
| |
October 31,
|
|||||||||
|
(in millions)
|
| |
2020
|
| |
2019
|
| |
2018
|
| |
2016
|
| |
2015
|
|||||||||
|
Total assets
|
| |
$5,202
|
| |
$6,189
|
| |
$5,405
|
| |
$6,083
|
| |
$3,679
|
| |
$1,073
|
| |
$1,234
|
| |
$1,512
|
|
Finance leases
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Current finance lease obligations
|
| |
96
|
| |
116
|
| |
111
|
| |
137
|
| |
160
|
| |
139
|
| |
145
|
| |
127
|
|
Non-current financial lease obligations
|
| |
95
|
| |
155
|
| |
136
|
| |
168
|
| |
144
|
| |
155
|
| |
215
|
| |
223
|
|
Total finance leases
|
| |
191
|
| |
271
|
| |
247
|
| |
305
|
| |
304
|
| |
294
|
| |
360
|
| |
350
|
|
Long-term debt
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Current maturities of long-term debt
|
| |
90
|
| |
88
|
| |
89
|
| |
80
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
Long-term debt, net of current maturities
|
| |
2,123
|
| |
2,294
|
| |
2,283
|
| |
2,297
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
Total long-term debt
|
| |
2,213
|
| |
2,382
|
| |
2,372
|
| |
2,377
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
Total equity
|
| |
$1,408
|
| |
$2,206
|
| |
$1,357
|
| |
$2,162
|
| |
$2,729
|
| |
$416
|
| |
$338
|
| |
$555
|
|
(1)
|
The selected historical financial data prior to June 1. 2018 may not be indicative of our performance, financial conditions or results of operations following the Spin-Off and mergers with Vencore Holding Corp. and KGS Holding Corp. The fiscal years 2020, 2019 and 2018 are not directly comparable to periods ending prior to April 1, 2017 which reflect DXC U.S. Public Sector’s financial results before the HPES Merger on April 1, 2017.
|
|
Fiscal Year
|
| |
High
|
| |
Low
|
| |
Dividends
Declared
|
|
2019
|
| |
|
| |
|
| |
|
|
First Quarter
|
| |
$25.45
|
| |
$19.84
|
| |
$0.05
|
|
Second Quarter
|
| |
$26.02
|
| |
$20.30
|
| |
$0.05
|
|
Third Quarter
|
| |
$26.64
|
| |
$15.74
|
| |
$0.05
|
|
Fourth Quarter
|
| |
$21.90
|
| |
$16.78
|
| |
$0.05
|
|
2020
|
| |
|
| |
|
| |
|
|
First Quarter
|
| |
$24.12
|
| |
$20.22
|
| |
$0.06
|
|
Second Quarter
|
| |
$26.61
|
| |
$21.23
|
| |
$0.06
|
|
Third Quarter
|
| |
$29.88
|
| |
$25.06
|
| |
$0.06
|
|
Fourth Quarter
|
| |
$29.44
|
| |
$14.03
|
| |
$0.06
|
|
2021
|
| |
|
| |
|
| |
|
|
First Quarter
|
| |
$25.75
|
| |
$16.11
|
| |
$0.07
|
|
Second Quarter
|
| |
$23.77
|
| |
$18.55
|
| |
$0.07
|
|
Third Quarter
|
| |
$24.37
|
| |
$17.36
|
| |
$0.07
|
|
Fourth Quarter (through March 31, 2021)
|
| |
$29.62
|
| |
$23.07
|
| |
$0.07
|
|
•
|
each person known by us to be the beneficial owner of more than five percent of the total outstanding Shares;
|
|
•
|
each of our named executive officers;
|
|
•
|
each of our directors; and
|
|
•
|
all of our executive officers and directors as a group.
|
|
Name and Address of Beneficial Owner
|
| |
Number of
Shares
Beneficially
Owned
|
| |
Percent of
Common
Stock
Outstanding
|
|
5% or Greater Stockholders:
|
| |
|
| |
|
|
Veritas Capital Fund Management L.L.C.(1)
|
| |
23,273,341
|
| |
14.44%
|
|
BlackRock, Inc.(2)
|
| |
16,188,246
|
| |
10.10%
|
|
The Vanguard Group, Inc.(3)
|
| |
13,834,879
|
| |
8.59%
|
|
JANA Partners LLC(4)
|
| |
8,736,867
|
| |
5.40%
|
|
Directors and Named Executive Officers:
|
| |
|
| |
|
|
John M. Curtis
|
| |
57,066
|
| |
*
|
|
John P. Kavanaugh
|
| |
65,827
|
| |
*
|
|
James L. Gallagher(5)
|
| |
21,040
|
| |
*
|
|
Tammy M. Heller
|
| |
3,232
|
| |
*
|
|
William G. Luebke
|
| |
6,785
|
| |
*
|
|
Sondra L. Barbour
|
| |
13,400
|
| |
*
|
|
Sanju K. Bansal
|
| |
13,400
|
| |
*
|
|
Lisa S. Disbrow
|
| |
13,400
|
| |
*
|
|
Glenn A. Eisenberg.
|
| |
7,600
|
| |
*
|
|
Pamela O. Kimmet
|
| |
13,400
|
| |
*
|
|
Ramzi M. Musallam(6)
|
| |
23,273,341
|
| |
*
|
|
Philip O. Nolan
|
| |
59,067
|
| |
*
|
|
Betty J. Sapp
|
| |
1,600
|
| |
*
|
|
Michael E. Ventling
|
| |
19,400
|
| |
*
|
|
All directors and executive officers as a group (14 individuals)(7)
|
| |
23,568,558
|
| |
14.62%
|
|
*
|
Represents less than 1%
|
|
(1)
|
Based on information included in Schedule 13D/A filed the SEC on January 27, 2021 by The SI Organization Holdings LLC, The Veritas Capital Fund IV, L.P., Veritas Capital Partners IV, L.L.C., Ramzi M. Musallam and Veritas Capital Partners III, L.L.C. These entities reported (i) shared voting power with respect to 23,273,341 Shares and (ii) shared dispositive power with respect to 23,273,341 Shares. The address for The SI Organization Holdings LLC, The Veritas Capital Fund IV, L.P., Veritas Capital Partners IV, L.L.C., Ramzi M. Musallam and Veritas Capital Partners III, L.L.C. is c/o Veritas Capital Fund Management, L.L.C., 9 West 57th Street, 29th Floor, New York, NY 10019.
|
|
(2)
|
Based on information included in Schedule 13G/A filed with the SEC on March 9, 2021 by BlackRock, Inc. BlackRock, Inc. reported (i) sole voting power with respect to 15,990,810 Shares and (ii) sole dispositive power with respect to 16,188,246 Shares. The address of BlackRock, Inc. is 55 E. 52nd Street, New York, NY 10055.
|
|
(3)
|
Based on information included in Schedule 13G/A filed with the SEC on February 10, 2021 by The Vanguard Group, Inc. The Vanguard Group, Inc. reported (i) sole voting power with respect to 0 Shares, (ii) shared voting power with respect to 297,320 Shares, (iii) sole dispositive power with respect to 13,425,169 Shares and (iv) shared dispositive power with respect to 409,710 Shares. The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355.
|
|
(4)
|
Based on information included in Schedule 13D/A filed with the SEC on March 15, 2021 by JANA Partners LLC. JANA Partners LLC reported (i) sole voting power with respect to 8,736,867 Shares and (ii) sole dispositive power with respect to 8,736,867 Shares. The address for JANA Partners LLC is 1330 Avenue of the Americas, 32nd Floor, New York, NY 10019.
|
|
(5)
|
The total number of shares listed as beneficially owned by Mr. Gallagher includes an option to purchase 12,742 shares of common stock.
|
|
(6)
|
Mr. Musallam is a member of the Board and is also the CEO and Managing Partner of Veritas Capital. Mr. Musallam may be deemed a beneficial owner of the shares of common stock beneficially owned by Veritas Capital and its affiliated investment funds and certain co-investors. See footnote 1 above.
|
|
(7)
|
The executive officers and directors, as a group, have sole voting and investment power with respect to 23,568,558 shares. This includes 12,742 shares of common stock that may be acquired pursuant to the exercise of employee stock options within 60 days of March 18, 2021. These shares have been deemed to be outstanding in computing the percentage of class.
|
|
Fiscal Quarter
2019
|
| |
Amount of
Shares
Purchased
|
| |
Range of
Prices
Paid
|
| |
Average
Purchase
Price
|
|
First Quarter
|
| |
—
|
| |
—
|
| |
—
|
|
Second Quarter
|
| |
923,188
|
| |
$23.02 - $25.76
|
| |
$24.38
|
|
Third Quarter
|
| |
967,240
|
| |
$16.05 - $26.18
|
| |
$21.96
|
|
Fourth Quarter
|
| |
805,450
|
| |
$17.39 - $21.53
|
| |
$20.07
|
|
2020
|
| |
|
| |
|
| |
|
|
First Quarter
|
| |
665,294
|
| |
$20.82 - $23.86
|
| |
$22.55
|
|
Second Quarter
|
| |
692,565
|
| |
$21.64 - $26.32
|
| |
$24.80
|
|
Third Quarter
|
| |
491,926
|
| |
$25.28 - $28.20
|
| |
$26.52
|
|
Fourth Quarter
|
| |
950,365
|
| |
$15.09 - $28.99
|
| |
$21.27
|
|
2021
|
| |
|
| |
|
| |
|
|
First Quarter
|
| |
—
|
| |
—
|
| |
—
|
|
Second Quarter
|
| |
—
|
| |
—
|
| |
—
|
|
Third Quarter
|
| |
—
|
| |
—
|
| |
—
|
|
Fourth Quarter (through March 31, 2021)
|
| |
—
|
| |
—
|
| |
—
|
|
•
|
Our annual report on Form 10-K for the fiscal year ended March 31, 2020;
|
|
•
|
Our quarterly reports on Form 10-Q for the fiscal quarters ended July 3, 2020, October 2, 2020 and January 1, 2021;
|
|
•
|
Our current reports on Form 8-K as filed with the SEC on June 10, 2020, August 7, 2020, January 27, 2021, January 27, 2021 and February 2, 2021; and
|
|
•
|
Our definitive proxy statement under Regulation 14A in connection with our Annual Meeting of Stockholders, filed with the SEC on June 15, 2020.
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c/o Veritas Capital Fund Management, L.L.C.
|
||||||
|
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9 West 57th Street, 32nd Floor
|
| |
|
|||
|
|
| |
New York, New York 10019
|
| |
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|
| |
Attention:
|
| |
Aneal Krishnan
|
| |
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| |
Email:
|
| |
akrishnan@veritascapital.com
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with a copy (which does not constitute notice) to:
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| |
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|
| |
Schulte, Roth & Zabel LLP
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| |
919 Third Avenue
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| |
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|
| |
New York, New York 10022
|
| |
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|
|
| |
Attention:
|
| |
Richard A. Presutti
|
| |
|
|
|
| |
Email:
|
| |
richard.presutti@srz.com
|
| |
|
|
|
| |
PERSPECTA INC.
|
||||||
|
|
| |
|
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|
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|
| |
By:
|
| |
/s/ John M. Curtis
|
|||
|
|
| |
|
| |
Name:
|
| |
John M. Curtis
|
|
|
| |
|
| |
Title:
|
| |
Chairman and CEO
|
|
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| |
|
| |
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| |
|
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|
| |
JAGUAR PARENTCO INC.
|
||||||
|
|
| |
|
| |
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|
|
| |
By:
|
| |
/s/ Ramzi Musallam
|
|||
|
|
| |
|
| |
Name:
|
| |
Ramzi Musallam
|
|
|
| |
|
| |
Title:
|
| |
President
|
|
|
| |
|
| |
|
| |
|
|
|
| |
JAGUAR MERGER SUB INC.
|
||||||
|
|
| |
|
| |
|
| |
|
|
|
| |
By:
|
| |
/s/ Ramzi Musallam
|
|||
|
|
| |
|
| |
Name:
|
| |
Ramzi Musallam
|
|
|
| |
|
| |
Title:
|
| |
President
|
|
| |
411 West Putnam Avenue
Greenwich, CT 06830
(203) 930-3700 MAIN
(203) 930-3799 FAX
|
|
•
|
reviewed drafts of the Transaction Documentation in substantially final form;
|
|
•
|
reviewed Perspecta’s Annual Reports to Shareholders and Annual Reports on Form 10-K for the fiscal years ended March 31, 2018, 2019 and 2020, its Quarterly Reports on Form 10-Q for the periods ended July 3, 2020 and October 2, 2020, its preliminary results for the quarter ended January 1, 2021 and its Current Reports on Form 8-K filed since March 31, 2020;
|
|
•
|
reviewed certain operating and financial information relating to Perspecta’s business and prospects, including projections for the six years ending April 3, 2026, all as prepared and provided to us by Perspecta’s management;
|
|
•
|
met with certain members of Perspecta’s management to discuss Perspecta’s business, operations, historical and projected financial results and future prospects;
|
|
•
|
reviewed the historical prices, trading multiples and trading volume of the shares of Perspecta Common Stock;
|
|
•
|
reviewed certain publicly available financial data, stock market performance data and trading multiples of companies which we deemed generally comparable to Perspecta;
|
|
•
|
reviewed the terms of certain relevant mergers and acquisitions involving companies which we deemed generally comparable to Perspecta;
|
|
•
|
performed discounted cash flow analyses based on the projections for Perspecta furnished to us by Perspecta; Perspecta’s cash flows for the period between the January 25, 2021 valuation date and March 31, 2021 were calculated in proportion to Perspecta’s projections for the entire fiscal year; and
|
|
•
|
conducted such other studies, analyses, inquiries and investigations as we deemed appropriate.
|
|
By:
|
/s/ Michael J. Urfirer
|
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