Item 1.01 Entry into a Material Definitive Agreement.
On February 8, 2023, NuVasive, Inc., a Delaware corporation ("NuVasive" or the
"Company"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Globus Medical, Inc., a Delaware corporation ("Globus Medical")
and Zebra Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary
of Globus Medical ("Merger Sub").
The Merger Agreement provides, among other things, that subject to the
satisfaction or waiver of the conditions set forth therein, Merger Sub will
merge with and into the Company (the "Merger"), with the Company surviving the
Merger as a wholly owned subsidiary of Globus Medical.
Merger Consideration
Under the Merger Agreement, at the effective time of the Merger (the "Effective
Time"), each share of common stock, par value $0.001 per share, of the Company
("Company Common Stock") issued and outstanding immediately prior to the
Effective Time (other than certain excluded shares as described in the Merger
Agreement) will be cancelled and converted into the right to receive 0.75 fully
paid and non-assessable shares of Class A common stock of Globus Medical, $0.001
par value per share (the "Globus Medical Class A Common Stock"), and the right
to receive cash in lieu of fractional shares.
Conditions to the Merger
The respective obligations of the Company and Globus Medical to consummate the
transactions contemplated by the Merger Agreement are subject to the
satisfaction or waiver of a number of conditions, including: (1) the adoption of
the Merger Agreement by the Company's stockholders; (2) approval by Globus
Medical's stockholders of the issuance of shares of Globus Medical Class A
Common Stock in connection with the Merger (the "Issuance"); (3) the absence of
any law or order prohibiting consummation of the Merger; (4) Globus Medical's
registration statement on Form S-4 with respect to the Globus Medical Class A
Common Stock to be issued in connection with the Merger having been declared
effective by the U.S. Securities and Exchange Commission; (5) the expiration or
termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act Approval"); (6)
accuracy of the other party's representations and warranties, subject to certain
materiality standards set forth in the Merger Agreement; (7) compliance by the
other party in all material respects with such other party's obligations under
the Merger Agreement; and (8) the absence of a material adverse effect on the
other party since February 8, 2023.
Representations and Warranties; Covenants
The Merger Agreement contains customary representations and warranties given by
the Company, Globus Medical and Merger Sub. The Merger Agreement also contains
customary pre-closing covenants, including covenants by each of the parties
relating to conduct of their respective business prior to the closing of the
Merger. In addition, the parties have agreed to use their respective reasonable
best efforts to take all actions necessary, proper or advisable to complete the
Merger and the other transactions contemplated by the Merger Agreement as soon
as reasonably practicable, including obtaining each regulatory approval
necessary to complete the Merger or to avoid an action or proceeding by a
governmental body. In addition, Globus Medical has agreed to take all actions
necessary, proper, or advisable to eliminate any impediment under any antitrust
law, including proposing, negotiating, committing to, effecting any divestiture,
except that (x) Globus Medical is not required to divest any business, asset,
property or product line of the Company, Globus Medical or any of their
respective subsidiaries that generated total net sales in excess of $40,000,000
in the twelve (12) month period ending December 31, 2022, and (y) the Company is
only required to take or commit to take any action requested by Globus Medical
pursuant to the regulatory efforts covenant, if such action is binding on the
Company only in the event the closing of the Merger occurs.
The Merger Agreement also provides that each of the Company and Globus Medical
is subject to certain restrictions on its ability to solicit alternative
acquisition proposals from third parties, to provide information to third
parties and to engage in discussions with third parties regarding alternative
acquisition proposals, subject to customary exceptions. In addition, the board
of directors of each of the Company and Globus Medical are required to recommend
that their respective stockholders vote in favor of the transaction, subject to
exceptions for superior proposals and other situations where failure to effect a
recommendation change would be inconsistent with such board's fiduciary duties.
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At the closing of the Merger, three members of the Company's board of directors
(to be proposed by the Company and acceptable to Globus Medical prior to the
closing of Merger) will be appointed to Globus Medical's board of directors.
Termination and Termination Fees
Either the Company or Globus Medical may terminate the Merger Agreement under
certain circumstances, including if (1) the Merger is not completed by
October 8, 2023, subject to two additional two-month extensions by the Company
or Globus Medical in certain circumstances in the event that the HSR Act
Approval has not been obtained or a legal restraint under anti-trust law is in
effect (the "End Date"), (2) the Company's stockholders fail to adopt the Merger
Agreement, (3) Globus Medical's stockholders fail to approve the Issuance,
(4) the Merger violates any final and non-appealable order or a law has been
enacted after the date of the Merger Agreement that makes the Merger illegal or
otherwise prohibited, (5) the other party breaches its representations,
warranties or covenants in the Merger Agreement in a way that would entitle the
party seeking to terminate the Merger Agreement not to consummate the Merger,
subject to the right of the breaching party to cure the breach, (6) prior to
receiving stockholder approval, a party terminates the Merger Agreement in order
to enter into a definitive agreement with respect to a superior proposal,
(7) the other party commits an intentional and material breach of its
restrictions with respect to the solicitation of alternative transactions, or
(8) the other party's board of directors has changed its recommendation in favor
of the Merger.
The Company will be required to make a payment to Globus Medical equal to
$120 million if the Merger Agreement is terminated in certain circumstances,
including because (1) Globus Medical has terminated the Merger Agreement because
the Company's board of directors has changed its recommendation in favor of the
Merger; provided that the termination fee will be reduced to $75 million if the
change in recommendation occurs during the 30-day period following the date of
the Merger Agreement (which period may be extended for an additional five
(5) days in the event an acquisition proposal is received on or after the 25th
day of such 30-day period) (such period, the "Specified Period") with respect to
a superior proposal, (2) the Company has terminated the Merger Agreement in
. . .
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On February 8, 2023, the Company's board of directors approved the NuVasive,
Inc. Excise Tax Gross-Up Plan (the "Plan"), which provides each of a specified
group of participating executives (including J. Christopher Barry, Matthew K.
Harbaugh, Nathaniel B. Sisitsky and Dale Wolf) with the right to receive a
gross-up payment in the event that any payments or benefits provided to such
participant in connection with the Merger become subject to the excise tax
pursuant to Section 4999 of the Internal Revenue Code. The gross-up payment
would generally place the participant in the same after-tax position that the
participant would have been in if the excise tax did not apply to the
participant, subject to an aggregate $4 million cap in total gross-up payments
that may be made to all participants under the Plan. Notwithstanding the
foregoing, to the extent a participant's payments or benefits exceed the
participant's applicable Section 280G safe harbor amount by 10% or less, the
participant will instead receive a reduction of payments and benefits to the
extent necessary to cause the payments not to become subject to the excise tax.
The Plan will automatically become effective upon, and subject to the occurrence
of, the Merger and therefore will automatically terminate if the Merger
Agreement is terminated without the consummation of the Merger.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On February 8, 2023, the Company's board of directors approved and adopted
"Amendment No. 3 to the Restated Bylaws of NuVasive, Inc." which adopts an
exclusive forum bylaw designating (i) a state court located within the
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State of Delaware (or, if no state court located within the State of Delaware
has jurisdiction, the federal court for the District of Delaware) as the sole
and exclusive forum for certain types of actions and proceedings, and (ii) the
federal district courts of the United States of America as the sole and
exclusive forum for the resolution of any complaint asserting a cause of action
arising under the Securities Act of 1933, as amended, against the Company or any
director or officer of the Company. The foregoing description is qualified in
its entirety by reference to the text of the amendment to the bylaws, a copy of
which is filed as Exhibit 3.1 hereto and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of February 8, 2023, by and
among NuVasive, Inc., Globus Medical, Inc. and Zebra Merger Sub, Inc.*
3.1 Amendment No. 3 to the Restated Bylaws of NuVasive, Inc.
10.1 Voting and Support Agreement, dated as of February 8, 2023, by and
among NuVasive, Inc., Globus Medical, Inc., David Paul and Sonali
Paul.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The
Company hereby undertakes to furnish supplemental copies of any of the omitted
schedules upon request by the U.S. Securities and Exchange Commission;
provided, that the Company may request confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules so
furnished.
* * *
No Offer or Solicitation
This current report is not intended to and does not constitute an offer to
subscribe for, buy or sell, or the solicitation of an offer to subscribe for,
buy or sell, or a solicitation of any vote or approval in any jurisdiction, nor
shall there be any sale, issuance or transfer of securities in any jurisdiction
in which such offer, sale or solicitation would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended, and otherwise in accordance with applicable law.
Important Information About the Transaction and Where To Find It
In connection with the proposed transaction, Globus Medical will file with the
U.S. Securities and Exchange Commission ("SEC") a registration statement on Form
S-4 that will include a joint proxy statement of Globus Medical and NuVasive and
that will also constitute a prospectus of Globus Medical for shares of its class
A common stock to be offered in the proposed transaction. Globus Medical and
NuVasive may also file other documents with the SEC regarding the proposed
transaction. This document is not a substitute for the joint proxy statement
statement/prospectus or registration statement or any other document which
Globus Medical or NuVasive may file with the SEC. INVESTORS AND SECURITY HOLDERS
OF GLOBUS MEDICAL AND NUVASIVE ARE URGED TO READ THE REGISTRATION STATEMENT,
WHICH WILL INCLUDE THE JOINT PROXY STATEMENT/PROSPECTUS, AND ANY OTHER RELEVANT
DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION AND RELATED MATTERS. The registration statement, definitive joint
proxy statement/ prospectus and other documents filed by Globus Medical and
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NuVasive with the SEC will be available free of charge at the SEC's website
(www.sec.gov) and from Globus Medical and NuVasive. Requests for copies of the
joint proxy statement/ prospectus and other documents filed by Globus Medical
with the SEC may be made by contacting Keith Pfeil, Chief Financial Officer by
phone at (610) 930-1800 or by email at kpfeil@globusmedical.com, and request for
copies of the joint proxy statement/prospectus and other documents filed by
NuVasive may be made by contacting Matt Harbaugh, Chief Financial Officer, by
phone at (858) 210-2129 or by email at investorrelations@nuvasive.com.
Participants in the Solicitation
Globus Medical, NuVasive, their respective directors and certain of their
executive officers and other employees may be deemed to be participants in the
solicitation of proxies from Globus Medical's and NuVasive's shareholders in
connection with the proposed transaction. Information about the directors and
executive officers of Globus Medical and their ownership of Globus Medical stock
is set forth in Globus Medical's annual report on Form 10-K for the fiscal year
ended December 31, 2021, which was filed with the SEC on February 17, 2022 and
its proxy statement for its 2022 annual meeting of stockholders, which was filed
with the SEC on April 21, 2022. Information regarding NuVasive's directors and
executive officers is contained in NuVasive's annual report on Form 10-K for the
fiscal year ended December 31, 2021, which was filed with the SEC on
February 23, 2022, and its proxy statement for its 2022 annual meeting of
stockholders, which was filed with the SEC on March 30, 2022. Certain directors
and executive officers of Globus Medical and NuVasive may have a direct or
indirect interest in the transaction due to securities holdings, vesting of
equity awards and rights to severance payments. Additional information regarding
the persons who may, under the rules of the SEC, be deemed participants in the
solicitation of Globus Medical's and NuVasive's shareholders in connection with
the proposed transaction will be included in the joint proxy
statement/prospectus. These documents can be obtained free of charge from the
sources indicated above.
Cautionary Notes on Forward-Looking Statements
This current report contains "forward-looking statements" within the meaning of
the federal securities laws, including Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. In this context, forward-looking statements often address expected
future business and financial performance and financial condition, and often
contain words such as "expect," "anticipate," "intend," "plan," "believe,"
"seek," "see," "will," "would," "may," "target," and similar expressions and
variations or negatives of these words. Forward-looking statements by their
nature address matters that are, to different degrees, uncertain, such as
statements about the consummation of the proposed transaction and the
anticipated benefits thereof. These and other forward-looking statements are not
guarantees of future results and are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially from those
expressed in any forward-looking statements, including the failure to consummate
the proposed transaction or to make any filing or take other action required to
consummate such transaction in a timely matter or at all. Important risk factors
that may cause such a difference include, but are not limited to: (i) the
proposed transaction may not be completed on anticipated terms and timing,
(ii) a condition to closing of the transaction may not be satisfied, including
obtaining shareholder and regulatory approvals, (iii) the anticipated tax
treatment of the transaction may not be obtained, (iv) the potential impact of
unforeseen liabilities, future capital expenditures, revenues, costs, expenses,
earnings, synergies, economic performance, indebtedness, financial condition and
losses on the future prospects, business and management strategies for the
management, expansion and growth of the combined business after the consummation
of the transactions, (v) potential litigation relating to the proposed
transaction that could be instituted against Globus Medical, NuVasive or their
respective directors, (vi) potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the transactions,
(vii) any negative effects of the announcement, pendency or consummation of the
transactions on the market price of Globus Medical's or NuVasive's common stock
and on Globus Medical's or NuVasive's businesses or operating results,
(viii) risks associated with third party contracts containing consent and/or
other provisions that may be triggered by the proposed transaction, (ix) the
risks and costs associated with the integration of, and the ability of Globus
Medical and NuVasive to integrate, their businesses successfully and to achieve
anticipated synergies, (x) the risk that disruptions from the proposed
transaction will harm Globus Medical's or NuVasive's business, including current
plans and operations, (xi) the ability of Globus Medical or NuVasive to retain
and hire key personnel and uncertainties arising from leadership changes,
(xii) legislative, regulatory and economic developments, and (xiii) the other
risks described in Globus Medical's and NuVasive's most recent annual reports on
Form 10-K and quarterly reports on Form 10-Q.
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These risks, as well as other risks associated with the proposed transaction,
will be more fully discussed in the joint proxy statement/prospectus that will
be included in the registration statement on Form S-4 that will be filed with
the SEC in connection with the proposed transaction. While the list of factors
presented here is, and the list of factors to be presented in the registration
statement on Form S-4 are, considered representative, no such list should be
considered to be a complete statement of all potential risks and uncertainties.
Unlisted factors may present significant additional obstacles to the realization
of forward-looking statements. Consequences of material differences in results
as compared with those anticipated in the forward-looking statements could
include, among other things, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks, any of which
could have a material adverse effect on Globus Medical's or NuVasive's
consolidated financial condition, results of operations, credit rating or
liquidity. Neither Globus Medical nor NuVasive assumes any obligation to
publicly provide revisions or updates to any forward-looking statements, whether
as a result of new information, future developments or otherwise, should
circumstances change, except as otherwise required by securities and other
applicable laws.
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