Item 1.01Entry into a Material Definitive Agreement
On September 20, 2021, Brooks Automation, Inc. (“Brooks”) entered into an Equity Interest Purchase Agreement (the “Purchase Agreement”) with Altar BidCo, Inc. (“Purchaser”), an affiliate of Thomas H. Lee Partners, L.P. (“THL”), pursuant to which, among other matters, Brooks has agreed to sell its Semiconductor Solutions Group business (referred to herein as the “Automation Business”), a leading provider of high precision, high throughput vacuum robots and systems as well as contamination control solutions to the global semiconductor capital equipment industry, which recently expanded into collaborative robotics for multi-market applications.
The Purchaser will pay a cash purchase price of $3.0 billion for the Automation Business at Closing, which amount is subject to customary adjustments as set forth in the Purchase Agreement, including adjustments based on the working capital, cash and indebtedness of the Automation Business as of the closing date.
The consummation of the transactions contemplated by the Purchase Agreement are subject to various closing conditions, including approval under antitrust laws and receipt of certain other governmental and third party consents. The closing of the transactions contemplated by the Purchase Agreement is expected to occur in the first half of calendar year 2022.
The Purchase Agreement contains customary termination provisions for each of Brooks and the Purchaser under certain circumstances, including the right to terminate the Purchase Agreement in certain circumstances if the closing has not occurred prior to June 30, 2022. In the event that Brooks terminates the Purchase Agreement in connection with the Purchaser’s breach of the Purchase Agreement or failure to consummate the Transaction under certain circumstances, Purchaser will be required to pay Brooks a termination fee of $150.0 million in cash (the “Reverse Termination Fee”).
For a period of two (2) years following the Closing, Brooks and the Purchaser have agreed to customary non-solicitation covenants which prohibit the solicitation or hiring of certain employees of the other party. Brooks also agreed that, for a period of five (5) years following the Closing, Brooks will not directly or indirectly compete with the Automation Business. The Purchaser also agreed that, for a period of five (5) years following the Closing, the Purchaser will not directly or indirectly engage in certain activities with respect to certain limited biological material storage applications, subject to certain exceptions.
The Purchaser has obtained equity financing commitments from investment funds affiliated with THL, which funds have also guaranteed certain obligations of the Purchaser under the Purchase Agreement under a separate limited guaranty, and debt financing commitments from Barclays Bank PLC, Goldman Sachs Bank USA, Credit Suisse AG and Credit Suisse Loan Funding LLC to fund purchase of the Automation Business. The obligations of the Purchaser under the Purchase Agreement are not conditioned on receipt of this financing.
The Purchase Agreement also includes customary representations, warranties and covenants of Brooks and the Purchaser. None of the representations and warranties or any of the covenants contemplated to be performed prior to the closing of the transactions contemplated by the Purchase Agreement survive the closing of the transactions contemplated by the Purchase Agreement. The representations and warranties made by each party were made solely for the benefit of the other party and (i) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk between the parties to the Purchase Agreement if those statements prove to be inaccurate; (ii) may have been qualified in the Purchase Agreement by disclosures that were made to the other party in disclosure schedules to the Purchase Agreement; (iii) may apply contract standards of “materiality” that are different from