Item 1.01.
|
Entry into a Material Definitive Agreement.
|
Merger Agreement
On March 20, 2018, salesforce.com, inc. (the Company) entered into an Agreement and Plan of Merger (the Merger
Agreement) by and among the Company, Malbec Acquisition Corp., a wholly owned subsidiary of the Company (Purchaser), and MuleSoft, Inc. (MuleSoft). Pursuant to the Merger Agreement, and upon the terms and subject to the
conditions thereof, Purchaser will commence an exchange offer (the Offer) to purchase all of the issued and outstanding shares of Class A common stock, $0.000025 par value per share, of MuleSoft (MuleSoft Class A Common
Stock) and Class B common stock, $0.000025 par value per share, of MuleSoft (MuleSoft Class B Common Stock, together with MuleSoft Class A Common Stock, MuleSoft Shares) for (i) $36.00 in cash and
(ii) 0.0711 of a share of common stock, $0.001 par value per share, of the Company (Company Shares), plus cash in lieu of any fractional shares of Company Shares, in each case, without interest and subject to any applicable
withholding of taxes (together, the Transaction Consideration).
Promptly following the completion of the Offer, upon the
terms and subject to the conditions of the Merger Agreement, Purchaser will be merged with and into MuleSoft, with MuleSoft surviving as a wholly owned subsidiary of the Company (the Merger). The Merger Agreement contemplates that, if
the Offer is completed, the Merger will be effected pursuant to Section 251(h) of the Delaware General Corporation Law (the DGCL), which permits completion of the Merger without a vote of the holders of MuleSoft Shares upon the
acquisition by Purchaser of a majority of the aggregate voting power of MuleSoft Shares that are then issued and outstanding. In the Merger, each then-outstanding MuleSoft Share, other than MuleSoft Shares held in treasury, by the Company, MuleSoft
or their respective subsidiaries and MuleSoft Shares held by stockholders who have validly exercised their appraisal rights under the DGCL, will be cancelled and converted into the right to receive the Transaction Consideration.
Under the terms of the Merger Agreement, Purchasers obligation to accept and pay for MuleSoft Shares that are tendered in the Offer is
subject to customary conditions, including, among others, (i) the condition that, prior to the expiration of the Offer, there have been validly tendered and not validly withdrawn a number of MuleSoft Shares that, upon the consummation of the
Offer (assuming that shares of MuleSoft Class B Common Stock validly tendered (and not validly withdrawn) will convert into shares of MuleSoft Class A Common Stock upon the consummation of the Offer), together with MuleSoft Shares then owned by
the Company and Purchaser (if any), would represent at least a majority of the aggregate voting power of the MuleSoft Shares outstanding immediately after the consummation of the Offer; (ii) the expiration or termination of the required waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (iii) the effectiveness of a registration statement on Form S-4 filed by the Company registering Company Shares to be issued in connection with the Offer
and the Merger; and (iv) the absence of any changes that have (or would reasonably be expected to have) a material adverse effect on MuleSofts business, operations, assets or financial condition. The cash portion of the consideration
payable in the Offer and the Merger is expected to be financed with a combination of new debt and cash on the Companys balance sheet. In connection with its entry into the Merger Agreement, the Company obtained a commitment from Bank of
America, N.A. for a $3.0 billion 364-day senior unsecured bridge loan facility, subject to customary conditions.
The Merger Agreement and
the consummation of the transactions contemplated thereby have been unanimously approved by the MuleSoft board of directors, and the MuleSoft board of directors has resolved to recommend to the stockholders of MuleSoft to accept the Offer and tender
their MuleSoft Shares to Purchaser pursuant to the Offer. MuleSoft has agreed not to solicit alternative transactions, subject to customary exceptions.
The Merger Agreement provides that at the effective time of the Merger, (i) all options held by former MuleSoft employees and former
MuleSoft service providers (other than former non-employee directors) will be cancelled and such holders will be entitled to receive a cash payment equal to the value of the Transaction Consideration, less applicable withholding taxes and less the
aggregate exercise price per share applicable to such options; (ii) all options, restricted stock units (RSUs) and performance shares held by current MuleSoft
-2-
employees will be assumed by Purchaser and converted into corresponding awards relating to Company Shares in accordance with the terms set forth in the Merger Agreement; and (iii) all RSUs
and options held by current or former MuleSoft non-employee directors will be cancelled and the holders will be entitled to receive the Transaction Consideration, less applicable withholding taxes, with the cash consideration portion of any such
options reduced by the aggregate exercise price per share applicable to such options.
The Merger Agreement contains representations,
warranties and covenants of the Company, Purchaser and MuleSoft that are customary for a transaction of this nature, including among others, covenants by MuleSoft regarding the conduct of its business during the pendency of the transactions
contemplated by the Merger Agreement, public disclosures and other matters.
The Merger Agreement contains certain termination rights of
the Company and MuleSoft. If the Merger Agreement is terminated under specified circumstances, including with respect to a change of the recommendation of the MuleSoft board of directors, MuleSoft will be required to pay the Company a termination
fee of $187 million in cash.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its
entirety by the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated by reference herein. The Merger Agreement has been attached to provide investors with information regarding its terms. It is
not intended to provide any other factual information about the Company, Purchaser or MuleSoft. In particular, the assertions embodied in the representations and warranties contained in the Merger Agreement are qualified by information in
confidential disclosure letters provided by each of the Company and MuleSoft to each other in connection with the signing of the Merger Agreement or in filings of the parties with the SEC. These confidential disclosure letters contain information
that modifies, qualifies and creates exceptions to the representations and warranties and certain covenants set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were used for the purposes of
allocating risk between the Company and MuleSoft rather than establishing matters of fact. Accordingly, the representations and warranties in the Merger Agreement should not be relied on as characterization of the actual state of facts about the
Company, Purchaser or MuleSoft.
Tender and Support Agreement
Concurrently with the execution of the Merger Agreement, certain stockholders of MuleSoft (the Stockholders), entered into Tender
and Support Agreements (the Tender and Support Agreements) with the Company and Purchaser, pursuant to which the Stockholders agreed, among other things, and subject to the terms and conditions of the Tender and Support Agreements, to
tender all of their MuleSoft Shares in the Offer, which in the aggregate represent approximately 30% of the outstanding MuleSoft Shares. The Tender and Support Agreements terminate upon certain events, including the termination of the Merger
Agreement in accordance with its terms.
The foregoing description of the Tender and Support Agreements does not purport to be complete
and is qualified in its entirety by the full text of the Tender and Support Agreements, copies of which are filed as Exhibits 10.1 and 10.2 hereto and are incorporated by reference herein.
-3-