Item 1.01. Entry into a Material Definitive Agreement.
On June 15, 2018, Crawford & Company (the Company), Crawford & Company (Canada) Inc., an indirect subsidiary
of the Company (Crawford Canada), EPIQ Class Action & Claims Solutions, Inc. (EPIQ) and EPIQ Systems Canada ULC (EPIQ Canada) entered into that certain Membership Interest and Asset Purchase
Agreement (the Purchase Agreement), pursuant to which Crawford sold its Garden City Group business (the GCG Business) to EPIQ and EPIQ Canada. The sale of the GCG Business was effected by (i) the sale by the Company of
all of the issued and outstanding membership interests of Garden City Group, LLC to EPIQ and (ii) the sale by Crawford Canada of specified assets and certain liabilities used in the GCG Business to EPIQ Canada. In connection with the
transaction, Crawford Canada is retaining certain liabilities related to the GCG Business.
The purchase price payable by EPIQ and EPIQ
Canada (collectively, the Buyers) to the Company and Crawford Canada for the GCG Business was $42,021,655.05, subject to certain adjustments, including an adjustment for the working capital (as defined in the Purchase Agreement) at the
closing. In addition, of this purchase price amount, $185,000 will be held in escrow for a period of time following the closing as a source of recovery for indemnification claims by the Buyers.
The Purchase Agreement contains various representations, warranties and covenants made by the parties. The Purchase Agreement provides for
post-closing indemnification, subject to certain limitations, with respect to breaches of representations, warranties and covenants by the parties, as well as indemnification with respect to certain other matters specified in the Purchase Agreement.
The Purchase Agreement provides that the Company and its affiliates will be prohibited from engaging in a competing business (as more
specifically described in the Purchase Agreement) anywhere in the United States or Canada for a period of four years following the closing. The Purchase Agreement also provides that the Company will not solicit the employment of employees of Garden
City Group, LLC or its subsidiaries for four years following the closing.
The parties entered into transition services agreements at the
closing pursuant to which the Company and Crawford Canada will provide certain information technology and back-office transition services to the Buyers through December 31, 2018.
The foregoing summary of the transaction and the terms and conditions of the Purchase Agreement is subject to, and qualified in its entirety
by, the full text of the Purchase Agreement, which is attached hereto as
Exhibit 2.1
and incorporated herein by reference.
The Purchase Agreement is attached as
Exhibit 2.1
in accordance with the rules of the Securities and Exchange Commission. It
is not intended to provide any other factual information about the Company. The representations, warranties, and covenants contained in the Purchase Agreement were made solely for purposes of such agreement and as of specific dates, were solely for
the benefit of the parties to the Purchase Agreement, may be subject to limitations and contractual risk allocation mechanisms agreed upon by the parties, and may be subject to standards of materiality that differ from those applicable to the
Company, and thus should not be relied upon as necessarily reflecting the actual state of facts or conditions.
On June 15, 2018, the
Company, its subsidiaries Crawford & Company Risk Services Investments Limited, Crawford & Company (Canada) Inc. and Crawford & Company (Australia) Pty. Ltd. (the Company, together with such subsidiaries, as borrowers (the
Borrowers)), the Companys guarantor subsidiaries party thereto, Wells Fargo Bank, National Association, as administrative agent and a lender (Wells Fargo), and the other lenders party thereto (together with Wells Fargo,
the Lenders), entered into a Limited Consent and First Amendment to Amended and Restated Credit Agreement (the Amendment) which, among other things, amended that certain Amended and Restated Credit Agreement, dated as of
October 17, 2017, by and among the Borrowers and the Lenders. Pursuant to the Amendment, the Lenders approved and consented to the transactions contemplated under the Purchase Agreement. The foregoing description of the Amendment is qualified
in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 10.1 to the Report and is incorporated herein by reference.