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Item 1.01
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Entry into a Material Definitive Agreement.
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Agreement and Plan of Merger
On October 22, 2019, Roku, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger, by and among the Company, Delaware Acquisition Company, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), Dataxu, Inc., a Delaware corporation (“Target”) and Shareholder Representative Services LLC, a Colorado limited liability company (the “Merger Agreement”). The Merger Agreement provides that, among other things, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into Target, with Target continuing as the surviving corporation and as a wholly-owned subsidiary of the Company (the “Merger”). Aggregate consideration to be paid upon the closing of the Merger consists of $75 million in cash and 571,516 shares of the Company’s Class A common stock. The Merger Agreement provides that, subject to certain conditions, the Company will file a resale registration statement covering the registration of the shares of Class A Common Stock of the Company issued pursuant to the Merger Agreement.
The Merger has been approved by the board of directors of each of the Company and Target. The stockholders of Target have also approved the Merger.
The Merger Agreement contains representations, warranties and covenants of the Company, Merger Sub and Target that are customary for a transaction of this nature.
The Merger Agreement also contains customary indemnification provisions whereby parties receiving consideration in the Merger will indemnify the Company for certain losses. A portion of the aggregate cash consideration will be held in escrow to secure such indemnification obligations.
The Merger is expected to close in the fourth quarter of the Company’s fiscal year. Consummation of the Merger is subject to customary closing conditions.
The foregoing summary of the Merger Agreement and the transactions contemplated thereby do not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ending December 31, 2019.
Forward Looking Statements
This report contains “forward-looking statements” relating to the acquisition of Target by the Company and the Merger Sub. All statements other than historical facts included in this report, including, but not limited to, statements regarding the timing and the closing of the transaction, the expected benefits of the Merger, prospective performance and future business plans, and any assumptions underlying any of the foregoing, are forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown, or unknown risks or uncertainties materialize, actual results could vary materially from the parties’ expectations and projections. Risks and uncertainties include, among other things: uncertainties regarding the timing of the closing of the Merger; the possibility that various closing conditions to the Merger may not be satisfied or waived; that there is a material adverse change to Target; the outcome of any legal proceedings that may be instituted with respect to the transaction; that the integration of Target’s business into the Company is not as successful as expected; the failure to achieve the expected benefits of the Merger; the failure of the Company to achieve the expected financial and commercial results from the Merger; negative effects of the announcement or the consummation of the transaction on the Company’s business operations, operating results or share price; other business effects, including effects of industry, economic or political conditions outside either company’s control; transaction costs; actual or contingent liabilities; as well as other cautionary statements contained elsewhere herein and in the Company’s periodic and other reports filed with the SEC including the factors set forth in the Company’s most recent annual reports on Form 10-K and quarterly reports on Form 10-Q. These forward-looking statements reflect the Company’s expectations as of the date of this report. The Company undertakes no obligation to update the information provided herein.