Item 1.01. Entry into a Material Definitive Agreement.
On June 30, 2018, United Rentals, Inc., a Delaware corporation (“
URI
”), entered into an Agreement and Plan of Merger (the “
Merger
Agreement
”) with BakerCorp International Holdings, Inc., a Delaware Corporation (“
BakerCorp
”) and UR Merger Sub IV Corporation (“
Merger Sub
”), a Delaware corporation and a direct, wholly-owned subsidiary of
URI. The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into BakerCorp (the “
Merger
”), with BakerCorp as the surviving corporation in the Merger.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “
Effective Time
”), each share of
BakerCorp common stock will be converted into the right to receive a pro rata share of an aggregate purchase price of $715,000,000, subject to customary purchase price adjustments as set forth in the Merger Agreement (the “
Per Share Merger
Consideration
”).
The Merger Agreement contains customary representations, warranties and covenants made by BakerCorp, URI and Merger Sub. Each
party has agreed to comply with customary covenants, including covenants by BakerCorp to conduct the business of BakerCorp and its subsidiaries in the ordinary course consistent with past practice during the interim period between the date of the
Merger Agreement and the date of closing of the Merger. The Merger Agreement also contains indemnification provisions whereby the stockholders of BakerCorp will indemnify URI for certain losses arising out of inaccuracies in, or breaches of, the
representations, warranties and covenants of BakerCorp, subject to certain caps and thresholds. URI intends to purchase a
buy-side
representations and warranties insurance policy under which it may seek
coverage for breaches of BakerCorp’s representations and warranties, to supplement the indemnity escrow amount under the Merger Agreement. The representations and warranties insurance policy will be subject to certain customary retention
amounts, exclusions and deductibles.
The completion of the Merger is subject to customary conditions, including, among others (i) the receipt of the
written consent of the stockholders of BakerCorp holding at least 95% of the outstanding shares of BakerCorp common stock, (ii) the absence of any injunction or order prohibiting the consummation of the Merger and (iii) the accuracy of
representations and warranties (subject to customary materiality qualifiers) and material compliance with covenants set forth in the Merger Agreement.
URI and BakerCorp are permitted under certain circumstances to terminate the Merger Agreement, including in the event that, among other things, the Merger is
not consummated by August 31, 2018.
The foregoing description of the Merger 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 Merger Agreement, which is filed as Exhibit 2.1 to this Form
8-K
and incorporated herein by reference.
The Merger Agreement is filed as an exhibit to this Current Report on Form
8-K
in order to provide information
regarding its terms. It is not intended to provide any other factual information about URI, BakerCorp or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Merger Agreement (i) were made
solely for purposes of the Merger Agreement and as of the date of the Merger Agreement, (ii) were solely for the benefit of the parties to the Merger Agreement, (iii) may be subject to qualifications and limitations agreed upon by the
parties to the Merger Agreement, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties to the Merger Agreement instead of establishing these matters as facts and (iv) may be
subject to standards of materiality applicable to the contracting parties that differ from those applicable to security holders of URI. Investors and security holders of URI should not rely on the representations, warranties and covenants or any
description thereof as characterizations of the actual state of facts or condition of URI or BakerCorp. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger
Agreement, which subsequent information may or may not be fully reflected in public disclosures by URI.