Item 1.01.
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Entry into a Material Definitive Agreement.
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Merger Agreement
On
December 1
, 2016, Vascular Solutions, Inc., a Minnesota corporation (“Vascular Solutions”), Teleflex Incorporated., a Delaware corporation (“Teleflex”), and Violet Merger Sub Inc., a Minnesota corporation (“Merger Sub”) entered into an Agreement and Plan of Merger (the “Merger Agreement”).
Pursuant to the Merger Agreement, Merger Sub will be merged with and into Vascular Solutions (the “Merger”), with Vascular Solutions as the surviving corporation as a wholly owned subsidiary of Teleflex. At the effective time of the Merger (the “Effective Time”), each share of common stock in Vascular Solutions, par value $0.01 per share (the “Shares”), other than (i) Shares then held by any wholly owned subsidiary of Vascular Solutions, (ii) Shares then held by Teleflex, Merger Sub or any other wholly owned subsidiary of Teleflex, and (iii) Shares then held by a holder who has properly asserted dissenters’ rights and otherwise complied with the provisions of Sections 302A.471 and 302A.473 of the Minnesota Business Corporations Act (“Dissenting Shares”), will be converted into the right to receive $56.00 per Share in cash, without interest (the “Merger Consideration”), without interest and subject to any applicable withholding tax. The transaction is not subject to any financing condition. Teleflex will fund the transaction through the proceeds from one or more debt financing transactions.
At the Effective Time, each outstanding option or similar right to purchase Shares (other than pursuant to the employee stock purchase program of Vascular Solutions) issued pursuant to Vascular Solutions’ Stock Option and Stock Award Plan (the “Company Options”) will be cancelled and converted into the right to receive an amount in cash (subject to any applicable withholding taxes), without interest, equal to the product of (i) the total number of Shares subject to such Company Option immediately prior to the Effective Time and (ii) the excess, if any, of the Merger Consideration over the exercise price subject to such Company Option.
At the Effective Time, each Share awarded under, and then subject to forfeiture pursuant to, Vascular Solutions’ Stock Option and Stock Award Plan (a “Restricted Share”) will be cancelled and converted into the right to receive the Merger Consideration, subject to any applicable withholding tax.
The obligation of Vascular Solutions, Teleflex and Merger Sub to consummate the Merger is subject to the satisfaction or waiver of closing conditions set forth in the Merger Agreement, including, among others (i) the approval of the Merger Agreement by the holders of a majority of the outstanding Shares (ii) the expiration or termination of any waiting period applicable under the Hart-Scott Rodino Act, and (iii) the absence of a “Company Material Adverse Effect” (as defined in the Merger Agreement) with respect to Vascular Solutions.
The Merger Agreement includes customary representations, warranties and covenants of the parties customary for a transaction of this nature, including covenants (i) for each of the parties to use their reasonable best efforts to take, or cause to be taken, all appropriate action to consummate and make effective the Merger and the other transactions contemplated by the Merger Agreement, (ii) for Vascular Solutions to conduct its business in the ordinary course and to be bound by customary restrictions relating to the operation of its business until the Effective Time or termination of the Merger Agreement, and (iii) for Vascular Solutions not to solicit third party proposals relating to alternative transactions or provide information or enter into discussions in connection with alternative transactions, subject to exceptions to permit the Board of Directors of Vascular Solutions (the “Company Board”) to comply with its fiduciary duties.
The Merger Agreement includes certain termination provisions for both Vascular Solutions and Teleflex and provides that, in connection with the termination of the Merger Agreement under certain specified circumstances, Vascular Solutions may be required to pay Teleflex a termination fee of $35 million, including upon: (i) a termination by Teleflex following a change in the recommendation of the Company Board, entry by Vascular Solutions into an alternative acquisition agreement, failure by Vascular Solutions to publicly recommend against a competing tender offer or exchange offer satisfying certain conditions within ten business days of the commencement of such offer, or failure by Vascular Solutions to publicly reaffirm the recommendation of the Company Board within ten business days after the date a competing proposal satisfying certain conditions has been announced; (ii) a termination by Vascular Solutions in order to enter into an agreement with respect to a superior proposal, subject to the satisfaction of certain conditions; or (iii) a termination in certain specified circumstances while a competing proposal satisfying certain conditions has been publicly disclosed or publicly known and has not been withdrawn prior to such termination, and, within 12 months of such termination, Vascular Solutions consummates or enters into an agreement providing for a competing proposal satisfying certain conditions.
The foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the Merger Agreement, attached hereto as Exhibit 2.1, which is incorporated herein by reference.
The representations and warranties of the parties contained in the Merger Agreement have been made solely for the benefit of the other parties to the Merger Agreement. In addition, such representations and warranties (i) have been made only for purposes of the Merger Agreement, (ii) have been qualified by certain documents filed with, or furnished to, the Securities and Exchange Commission (the “SEC”) by Vascular Solutions prior to the date of the Merger Agreement, (iii) have been qualified by confidential disclosures made to Teleflex and Merger Sub in connection with the Merger Agreement, (iv) are subject to materiality qualifications contained in the Merger Agreement which may differ from what may be viewed as material by investors, (v) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement and (vi) have been included in the Merger Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as facts. Accordingly, the Merger Agreement is included with this filing only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding Vascular Solutions or its subsidiaries or business. Investors should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual state of facts or condition of Vascular Solutions or any of its subsidiaries or business. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the public disclosures of Vascular Solutions. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding Vascular Solutions that has been, is or will be contained in, or incorporated by reference into, the Forms 10-K, Forms 10-Q, Forms 8-K, proxy statements and other documents that Vascular Solutions files with the SEC.
Employee Stock Purchase Plan
On December 1, 2016, the Company Board, in accordance with the requirements of the Merger Agreement regarding the treatment of the Vascular Solutions Employee Stock Purchase Plan (the “ESPP”), adopted resolutions amending the ESPP such that (i) no new “Purchase Period” (as defined in the ESPP) will commence after November 1, 2016, (ii) the “New Purchase Date” (as defined in the ESPP) will be set as the day immediately prior to the Effective Date and (iii) the ESPP shall terminate immediately following the purchase of shares on the New Purchase Date, unless otherwise terminated by the Company Board prior thereto. The foregoing amendments to the ESPP are conditioned upon and subject to the closing of the Merger.