Item 2.01
|
Completion of Acquisition or Disposition of Assets.
|
On July 2, 2018, Gannett Co., Inc. (“Gannett”), completed its previously announced acquisition of WordStream, Inc. (“WordStream”). Pursuant to the Agreement and Plan of Merger, dated as of May 9, 2018, by and among Gannett, Orca Merger Sub, Inc., a wholly owned subsidiary of Gannett (“Merger Sub”), Wordstream and Shareholder Representative Services LLC (the “Equityholder Representative”), as amended by that certain Letter Agreement, dated as of June 20, 2018, by and among Gannett, Merger Sub, WordStream and the Equityholder Representative (collectively, the “Merger Agreement”), Merger Sub merged with and into WordStream (the “Merger”), with WordStream surviving the Merger as a wholly owned subsidiary of Gannett.
The total merger consideration payable by Gannett to WordStream’s equityholders upon the closing of the Merger was approximately $145 million in cash, which Gannett funded through a combination of cash on hand and borrowings under its revolving credit facility. The total closing consideration included a base purchase price of $130 million, which was adjusted for WordStream’s estimated net working capital, cash on hand, debt and unpaid transaction expenses as of the closing, as well as escrow holdbacks totaling $6.3 million and a holdback of $100,000 for the Equityholder Representative’s expenses. The total closing consideration remains subject to confirmation and adjustment pursuant to certain customary post-closing true-up procedures set forth in the Merger Agreement.
In addition to the consideration payable upon the closing of the Merger, the Merger Agreement provides for certain additional consideration that may become payable to WordStream’s equityholders at a later date, including up to an additional $20 million in potential cash earn-out payments based on WordStream meeting certain revenue targets and up to $6.4 million in cash payable upon the release of the escrow and expense holdbacks (if such funds remain available for release).
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement. Copies of the original Merger Agreement and the amendment thereto are filed herewith as Exhibit 2.1 and Exhibit 2.2, respectively, and are incorporated herein by reference.