Item 1.01
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Entry Into a Material Definitive Agreement
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On September 19, 2017, Heidrick & Struggles,
the Denmark branch of Heidrick & Struggles AB, Sverige (the Buyer), and a wholly-owned subsidiary of Heidrick & Struggles International, Inc. (the Company), entered into a definitive agreement (the
Share Purchase Agreement) to purchase from Porma APS, a Denmark company (the Seller), all of the issued and outstanding shares in Amrop A/S, a private limited liability company registered in Denmark.
Amrop A/S is a Denmark-based provider of executive search, board consulting, and leadership assessment services.
Under the terms of the Share Purchase Agreement, the Buyer will pay the Seller DKK 24.0 million (USD $3.9M) at closing, subject to certain adjustments,
plus additional cash consideration after closing based on fee revenue generated from the business during the two-year period following the completion of the transaction. The Company currently estimates that it will be required to pay the Seller
approximately DKK 28.0 million (USD $4.5M) of additional cash consideration, for total aggregate consideration estimated to be DKK 52.0 million (USD $8.4M). However, the actual amount of such additional cash consideration will depend on
numerous factors that cannot be determined at this time, including the actual fee revenue generated from the business in the two-year period following the completion of the transaction. The Share Purchase Agreement also contains representations,
warranties, covenants and termination rights of the parties customary for a transaction of this type. The transaction will be financed with cash.
The
consummation of the transactions contemplated by the Share Purchase Agreement is subject to certain specified closing conditions, including the Sellers delivery of written confirmation from the Amrop Partnership of the termination of the
Sellers participation in such partnership, receipt of certain third-party consents or approvals, the absence of a material adverse effect with respect to the Sellers operations, the acceptance of employment offers by certain
employees of Seller and other customary closing conditions, including the accuracy of each partys representations and warranties and each partys compliance with its obligations and covenants under the Share Purchase Agreement. In the
event that Seller is unable to deliver the written confirmation of the termination of the Amrop Partnership within six months, the parties have agreed to enter into good faith negotiations to postpone the closing date of the acquisition. The
transactions contemplated by the Share Purchase Agreement have been approved by the Sellers shareholders and do not require the approval of the Companys shareholders.
The foregoing summary of the Share Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the Share Purchase Agreement, a copy of which is attached as Exhibit 2.1 to this report and is incorporated herein by reference. The representations and warranties made in the Share Purchase Agreement
were made solely for purposes of the Share Purchase Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with the negotiated terms of the Share Purchase Agreement. Moreover, some of those
representations and warranties may have only been true at a certain date, may be subject to a contractual standard of materiality or may have been used for purposes of allocating risk between the parties rather than establishing matters of fact.
Investors are not third-party beneficiaries of the Share Purchase Agreement and should not rely on the representations, warranties or covenants or any description thereof as characterizations of the actual state of facts at the time they were made
or otherwise. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Share Purchase Agreement, which subsequent information may or may not be fully reflected in the Companys
public disclosures.
Cautions about Forward-Looking Statements
This document contains forward-looking statements, including statements regarding expectations, views, opportunities, plans, strategies, beliefs and
statements of similar effect relating to the Company, Seller, the Share Purchase Agreement and the expected benefits of the transaction. These forward-looking statements are not guarantees of future performance and they are based on
managements expectations that involve a number of risks, uncertainties and assumptions, any of which could cause actual results or events to differ materially from those expressed in or implied in the forward-looking statements, including
risks associated with the transaction, such as uncertainties regarding the closing of the transaction or the ability to realize the expected benefits of the transaction. For a detailed discussion of risk factors impacting the Company, see the
Companys Annual Report on Form 10-K for the year ended December 31, 2016 and other filings the Company makes with the Securities and Exchange Commission. The forward-looking statements contained in this document are made as of the date
hereof, and the Company assumes no obligation to revise or update any forward-looking statement, except as otherwise required by law.