Item 1.01
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Entry into a Material Definitive Agreement.
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Merger Agreement
On February 10, 2021,
Synacor, Inc., a Delaware corporation (the Company), entered into an Agreement and Plan of Merger (the Merger Agreement), by and among the Company, CLP SY Holding, LLC, a Delaware limited liability company
(CLP Parent), and SY Merger Sub Corporation, a Delaware corporation and an indirect wholly-owned subsidiary of CLP Parent (Merger Sub), pursuant to which Merger Sub will commence a tender offer (the
Offer) to purchase any and all of the issued and outstanding shares of the Companys common stock, par value $0.01 per share (the Company Shares), at a price per Company Share of $2.20, in cash, without
interest and subject to any withholding taxes required by applicable law (such amount or any higher amount per Company Share that may be paid pursuant to the Offer, the Offer Price).
Pursuant to the Merger Agreement, Merger Sub has agreed to commence the Offer as promptly as reasonably practicable (but in no event later than 15 business
days) after the date of the Merger Agreement.
The Merger Agreement provides that the Company may not solicit or support any alterative acquisition
proposals (subject to customary exceptions for the Companys Board of Directors to respond to unsolicited proposals or intervening events in the exercise of its fiduciary duties). In addition, in connection with the termination of the Merger
Agreement in certain circumstances, the Company will be obligated to pay a termination fee of $3.5 million and/or reimburse CLP Parent for related enforcement costs incurred in connection with the transactions contemplated by the Merger
Agreement.
The closing of the Offer is subject to various conditions, including there being validly tendered in the Offer (in the aggregate) and not
properly withdrawn prior to the expiration of the Offer that number of Company Shares that equals at least a majority in voting power of the Company Shares then issued and outstanding (the Minimum Condition).
As soon as practicable following the acceptance by Merger Sub of the Company Shares in the Offer, Merger Sub will be merged with and into the Company, with
the Company continuing as the surviving corporation (the Merger) on the terms and subject to the conditions set forth in the Merger Agreement, with the Merger to be effected pursuant to Section 251(h) of the General
Corporation Law of the State of Delaware, as amended (the DGCL). As a result of, and at the effective time of the Merger (the Effective Time), each outstanding Company Share not purchased in the Offer (other
than any Company Shares for which the holder has properly demanded the appraisal of such shares pursuant to the DGCL) will be converted automatically into the right to receive a cash amount, without interest, subject to any withholding of taxes
required by applicable law, equal to the Offer Price (referred to as the Merger Consideration).
At the Effective Time, subject to the
terms and conditions set forth in the Merger Agreement, each stock option to purchase Company Shares (an Option), each restricted share unit award (an RSU) and each performance share unit award (a
PSU) of the Company that is outstanding immediately prior to the Effective Time, whether vested or unvested as of the Effective Time, will automatically be cancelled and converted into the holders right to receive a cash
amount equal to the product of (i) the total number of Company Shares underlying such Option, RSU or PSU and (ii) (a) in the case of any such Option, the excess (if any) of the Merger Consideration over the
per-share exercise price of such Option, and (b) with respect to any such RSU or PSU, the Merger Consideration. If the per-share exercise price of an Option is
equal to or greater than the Merger Consideration, such Option shall be cancelled for no consideration.
Pursuant to an equity commitment letter dated
February 10, 2021, Centre Lane Partners V, L.P. has committed to provide CLP Parent, on the terms and subject to the conditions set forth in the equity commitment letter, at the Effective Time, with an aggregate equity contribution of up to
$87,597,343 plus the aggregate amount payable to holders of Options, RSUs, and PSUs pursuant to the Merger Agreement. This amount is sufficient to fund the payment of the Offer Price for all of the Company Shares tendered in the Offer and the Merger
Consideration for all the Company Shares exchanged in the Merger and any other amounts required to be paid in connection with the transaction (including any amounts payable in respect of the Options, RSUs and PSUs under the Merger Agreement).