Item 1.01
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Entry Into a Material Definitive Agreement.
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On March 25, 2017, Sealed Air Corporation (the
Company) entered into a Purchase Agreement (the Purchase Agreement) with Diamond (BC) B.V. (Buyer), a newly formed entity affiliated with Bain Capital Private Equity (the Sponsor). On the terms and
subject to the conditions set forth in the Purchase Agreement, Buyer has agreed to purchase the Companys Diversey Care division and the food hygiene and cleaning business within the Companys Food Care division (collectively, the
Diversey Business) for $3.2 billion in cash (subject to certain adjustments set forth in the Purchase Agreement).
The Purchase Agreement
contains various representations, warranties, and covenants by each party, including, among others, covenants with respect to the conduct of the Diversey Business by the Company during the period between the execution of the Purchase Agreement and
the completion of the transaction (the Closing). The Company and Buyer have agreed to use their respective reasonable best efforts to cause the transaction to be consummated. In addition, for a period of two (2) years following the
Closing, subject to certain exceptions, the Company and its affiliates will not engage in certain activities that compete with the Diversey Business. Further, for a period of one (1) year following the Closing, the Company and its affiliates
will be subject to certain non-solicitation and non-hire provisions relating to the Diversey Business, and Buyer and its affiliates will be subject to certain non-solicitation and non-hire provisions relating to the Companys retained
businesses.
The transaction is subject to certain closing conditions including, among others, (i) the expiration or early termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of required clearances from certain other foreign governmental antitrust authorities; (ii) the absence of any statute, rule,
regulation, executive order, decree, preliminary or permanent injunction, or restraining order prohibiting or restricting the consummation of the transaction; and (iii) the completion of an internal reorganization of the Company to separate the
Diversey Business therefrom. Each partys obligation to consummate the transaction is also subject to (1) the accuracy of the other partys representations and warranties contained in the Purchase Agreement (subject to certain
materiality qualifiers) and (2) the other partys performance and compliance in all material respects with its obligations and covenants under the Purchase Agreement. The closing of the transaction will not occur prior to September 5,
2017, unless the parties otherwise agree.
Either party has the right to terminate the Purchase Agreement under certain circumstances. Those circumstances
include (i) failure to consummate the transaction by October 16, 2017 (the Outside Date); (ii) material breach by either party that has not been cured, if curable, within the shorter of thirty (30) days after notice
of such breach and prior to the Outside Date; (iii) mutual consent; or (iv) as a result of a governmental action that restrains, enjoins, or otherwise prohibits the transactions contemplated by the Purchase Agreement.
Buyer is required to pay the Company a termination fee of $208 million if the Purchase Agreement is terminated by the Company (i) upon a breach by Buyer
of any of its representations, warranties, agreements or covenants set forth in the Purchase Agreement and such breach renders a closing condition incapable of satisfaction, and such breach has not been waived and is not cured by the earlier of
thirty (30) days after notice of such breach or the Outside Date; (ii) if the marketing period for Buyers financing has ended, all conditions to Buyers obligation to close have been satisfied, the Company notifies Buyer that it
is ready, willing and able to close, but Buyer fails to consummate the Closing within three (3) business days after such notice; and (iii) if the Closing does not occur by the Outside Date and the Company would be entitled to terminate at
such time as a result of the circumstances stated in clause (i) of this paragraph.
Buyer has obtained equity commitments from certain funds
affiliated with the Sponsor and debt financing commitments from Credit Suisse AG, Credit Suisse Securities (USA) LLC, and Goldman Sachs Bank USA.
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The obligations of Buyer pursuant to the Purchase Agreement are not conditioned on receipt of this financing. However, Buyer is not required to consummate the transaction until after the
completion of a marketing period for its financing that extends for up to twenty-two (22) consecutive days following the receipt of certain financial information from the Company and satisfaction of all closing conditions. Certain funds
affiliated with the Sponsor have also agreed to guarantee the obligations of Buyer under the Purchase Agreement to pay the reverse termination fee and reimbursement obligations that may become payable by the Buyer, on the terms and subject to the
conditions set forth in their limited guaranty in favor the Company.
Each of the Company and Buyer has agreed to indemnify the other party for losses
arising from certain breaches of the Purchase Agreement and for certain other liabilities, subject to certain limitations. In connection with the transaction, the Company and Buyer (or entities that it will acquire in the transaction) will also
enter into certain additional ancillary agreements, including a transition services agreement, license agreements with respect to certain intellectual property of the Diversey Business and the Company and other commercial agreements.
The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which will
be filed with the United States Securities and Exchange Commission as an exhibit to the Quarterly Report on Form 10-Q to be filed by the Company for the quarterly period ended March 31, 2017 (the First Quarter 10-Q).
The representations, warranties and covenants set forth in the Purchase Agreement have been made only for the purposes of the Purchase Agreement and solely
for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the
Purchase Agreement instead of establishing such matters as facts. In addition, such representations and warranties were made only as of the dates specified in the Purchase Agreement, and information regarding the subject matter thereof may change
after the date of the Purchase Agreement. Accordingly, the Purchase Agreement will be filed as an exhibit to the First Quarter 10-Q to provide investors with information regarding its terms and not to provide investors with any other factual
information regarding the Company or its businesses (including the Diversey Business) as of the date of the Purchase Agreement or as of any other date.