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Item 1.01.
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Entry into a Material Definitive Agreement.
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Share Purchase Agreement and Warranty Deed
On March 27, 2021, Broadridge Financial Solutions, Inc., a Delaware corporation (“Broadridge” or the “Company”) and its wholly-owned subsidiary Broadridge
Sweden Holdings AB (“BR Holdings”), a company incorporated under the laws of Sweden, entered into a share purchase agreement (the “Share Purchase Agreement”) with Cidron Delfi S.À R.L. (“Institutional Seller”), Itiviti Invest V
AB (“MIP Seller”), Itiviti Intressenter AB (“KIP Seller”) and the individuals named therein (the “Individual Sellers” and collectively with the Institutional Seller, the MIP Seller and the KIP Seller, the “Sellers”)
pursuant to which the Sellers have agreed to sell 100% of the issued and outstanding capital stock (the “Shares”) of Itiviti Holding AB, a company incorporated under the laws of Sweden (“Itiviti Holding”), to BR Holdings (the “Acquisition”).
Key persons engaged in the management of the operations of Itiviti Holding and its subsidiaries (the “Target Group”) (the “Management Warrantors”) have agreed to give certain warranties and a tax indemnity as set forth in the Warranty
Deed, dated on the same date as the Share Purchase Agreement, by and between BR Holdings and the Management Warrantors (the “Warranty Deed”).
At the closing of the Acquisition (the “Closing”), Broadridge will acquire Itiviti Holding pursuant to the Share Purchase Agreement on a cash-free, debt-free basis,
for the aggregate purchase price (the “Purchase Price”) payable by BR Holdings of EUR2.143 billion in cash (which amount includes funds required to repay all outstanding indebtedness of the Target Group at Closing), subject to certain
adjustments as described in the Share Purchase Agreement. Broadridge is acting as guarantor of the obligations of BR Holdings under the Share Purchase Agreement, including payment of the Purchase Price. The Purchase Price will be funded by cash on
hand, and new indebtedness.
The Closing is subject to customary closing conditions and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the “Competition Condition”).
The Share Purchase Agreement contains certain warranties from BR Holdings and Broadridge confirming that they have and will have definitive loan agreements from financing
sources and/or a letter from the financing banks in an amount sufficient, together with cash on hand, to fund the Purchase Price. The Share Purchase Agreement contains customary title and capacity warranties from the Sellers. In addition, the
Warranty Deed contains certain customary warranties and a tax indemnity from the Management Warrantors relating to the Target Group and its historic business and operations. In addition, BR Holdings has obtained a warranty and indemnity insurance
policy, which will provide coverage to BR Holdings in respect of certain losses arising from breaches of the warranties and tax indemnity contained in the Share Purchase Agreement and the Warranty Deed.
The Share Purchase Agreement contains limited termination rights for each of BR Holdings and the Sellers (arising in certain specified circumstances only). In particular,
the Share Purchase Agreement will automatically terminate if the Competition Condition is not satisfied by June 15, 2021 (or such later date as agreed by the Institutional Seller and BR Holdings). The Institutional Seller is entitled (but not
obliged) to terminate the Share Purchase Agreement if proceedings or investigations regarding the transaction are commenced by regulatory authorities.
The Share Purchase Agreement has been approved by the board of directors of Broadridge, and the Acquisition is expected to close in the fourth quarter of Fiscal Year 2021,
after the Competition Condition has been satisfied.
The descriptions of the Share Purchase Agreement and Warranty Deed above are summaries only, and are qualified in their entirety by reference to the Share Purchase
Agreement and Warranty Deed, which are attached to this Form 8-K as Exhibits 2.1 and 10.1, respectively, and incorporated by reference herein. The representations and warranties contained in the Share Purchase Agreement were made solely for
purposes of allocating contractual risks between the parties and not as a means of establishing facts. Such representations and warranties may be subject to important qualifications and limitations agreed to by the parties in connection with
negotiating the terms of the Share Purchase Agreement and shall not be relied on as factual information at the time they were made or otherwise. The Share Purchase Agreement may have different standards of materiality than under applicable
securities laws.
Term Credit Agreement
Concurrently with the execution of the Share Purchase Agreement, on March 27, 2021, Broadridge entered into a term credit agreement (the “Term Credit Agreement”)
among the Company, as borrower, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, providing for term loan commitments in an aggregate principal amount of $2.55 billion (“Term Commitments”). The Term
Commitments are comprised of a $1.0 billion U.S. dollar tranche (“Tranche 1”, and the term loans funded thereunder, the “Tranche 1 Loans”) and a $1.55 billion U.S. dollar tranche (“Tranche 2”, and the term loans funded
thereunder, the “Tranche 2 Loans”; and the Tranche 2 Loans, together with the Tranche 1 Loans, the “Loans”). The Company expects to borrow the Loans on or shortly prior to the date the Acquisition is to be consummated. The Loans must
be borrowed, if at all, in a single funding. Once borrowed, amounts repaid or prepaid in respect of such Loans may not be reborrowed. The Tranche 1 Loans will mature on the date that is 18 months after the date on which the Loans are borrowed (the
“Funding Date”). The Tranche 2 Loans will mature on the third anniversary of the Funding Date. The proceeds of the Loans will be used by the Company to finance the Acquisition and pay certain fees and expenses in connection therewith.
The Company may permanently reduce outstanding unfunded Tranche 1 or Tranche 2 commitments and/or voluntarily prepay Loans at any time, in each case, in whole or in part
and without premium or penalty (but subject to customary breakage provisions in respect of any such prepayments). In the event of receipt of cash proceeds by the Company or its subsidiaries from certain incurrences of indebtedness, certain equity
issuances, and certain sales, transfers or other dispositions of assets, the Company will be required to permanently reduce outstanding unfunded Tranche 1 or Tranche 2 commitments and/or prepay outstanding Loans, in each case, subject to certain
limitations and qualifications as set forth in the Term Credit Agreement. If the Funding Date occurs prior to the date of closing of the Acquisition (the “Closing Date”), then the Company must prepay the entire outstanding principal amount
of all the Loans on the earliest of (i) if the Closing Date has not occurred on or prior to the 12th day after the Funding Date, the day that is three business days after such 12th day, (ii) if the Closing Date has not occurred on or prior to June
15, 2021, the third business day thereafter, and (iii) if the Share Purchase Agreement is terminated prior to the Closing Date, the third business day after such termination.
The Term Credit Agreement contains affirmative and negative covenants that the Company believes are usual and customary for transactions of this type. The negative
covenants include, among other things, limitations on liens, subsidiary indebtedness, sale and leaseback transactions, restrictive agreements, transactions with affiliates, and certain mergers, consolidations and transfers of all or substantially
all of the Company’s consolidated assets. The Term Credit Agreement also prohibits the Company from exceeding a maximum leverage ratio. Upon the occurrence of certain customary events of default set forth in the Term Credit Agreement, including
payment defaults, breaches of covenants, a change of control, judgment defaults and cross acceleration or cross default under other material indebtedness of the Company, the Administrative Agent may with the consent, and upon the request, of a
majority of the lenders accelerate repayment of the loans and cancel all of the commitments outstanding under the Term Credit Agreement. Upon certain insolvency and bankruptcy events of default, the Loans shall automatically accelerate and all of
the outstanding commitments under the Term Credit Agreement shall be automatically cancelled. During the period between the Funding Date and the Closing Date, the exercise of rights and remedies in respect of certain events of default will be
tolled.
The Company will pay a ticking fee on the outstanding unfunded Tranche 1 and Tranche 2 commitments at a rate of 11.0 basis points per annum (subject to step-ups to 20.0
basis points and a step-down to 9.0 basis points based on ratings) (the “Applicable Rate”), payable in arrears on the last day of the applicable accrual period. The ticking fee for each tranche will accrue at the Applicable Rate beginning on
the date of the Term Credit Agreement and ending on the date of termination of the applicable commitment (whether as a result of the Funding Date or otherwise). The Tranche 1 Loans will initially bear interest at LIBOR plus 0.750% per annum
(subject to step-ups to LIBOR plus 1.125% or a step-down to LIBOR plus 0.625% based on ratings). The Tranche 2 Loans will initially bear interest at LIBOR plus 0.875% per annum (subject to step-ups to LIBOR plus 1.250% or a step-down to LIBOR plus
0.750% based on ratings).
The foregoing description of the Term Credit Agreement is only a summary and is qualified in its entirety by reference to the full text of the Term Credit Agreement, which
is attached as Exhibit 10.2 hereto and is hereby incorporated into this Item 1.01 by reference. The representations and warranties contained in the Term Credit Agreement were made solely for purposes of allocating contractual risks between the
parties and not as a means of establishing facts. Such representations and warranties may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Term Credit Agreement and
shall not be relied on as factual information at the time they were made or otherwise. The Term Credit Agreement may have different standards of materiality than under applicable securities laws.