UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Date of Report (date of earliest event reported): October 26,
2022
UserTesting, Inc.
(Exact name of Registrant, as specified in its charter)
|
Delaware |
|
001-41049 |
|
26-0339214 |
| (State or other jurisdiction of
incorporation) |
|
(Commission File Number) |
|
(I.R.S. Employer Identification
Number) |
144 Townsend Street
San Francisco, California 94107
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: (650)
567-5616
Former name or address, if changed since last report: Not
Applicable
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
x Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each
class |
|
Trading Symbol |
|
Name of each exchange on which
registered |
| Common
Stock, $0.0001 par value per share |
|
USER |
|
New
York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
¨
|
Item 1.01 |
Entry into a Material Definitive
Agreement. |
Agreement and Plan of Merger
On October 26, 2022, UserTesting, Inc. (“UserTesting” or the
“Company”) entered into an Agreement and Plan of Merger (the
“Merger Agreement”) by and among the Company, Thunder Holdings,
LLC, a Delaware limited liability company (“Parent”), and Thunder
Merger Sub, Inc., a Delaware corporation and wholly owned
subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub
will merge with and into the Company (the “Merger”), with the
Company surviving the Merger as a wholly owned subsidiary of
Parent. Parent and Merger Sub are affiliates of Thoma Bravo
Discover Fund III, L.P., a Delaware limited partnership, and Thoma
Bravo Discover Fund IV, L.P., a Delaware limited partnership (the
“Thoma Bravo Funds”), and are managed by Thoma Bravo, L.P. (“Thoma
Bravo”).
The Company’s Board of Directors (the “Board”) has unanimously
approved the Merger Agreement and resolved to recommend that the
Company’s stockholders adopt the Merger Agreement.
As a result of the Merger, each share of common stock of the
Company, par value $0.0001 per share (“Common Stock”), outstanding
immediately prior to the effective time of the Merger (the
“Effective Time”) (subject to certain exceptions, including shares
of Common Stock owned by stockholders of the Company who have not
voted in favor of the adoption of the Merger Agreement and have
properly exercised appraisal rights in accordance with Section 262
of the General Corporation Law of the State of Delaware) will, at
the Effective Time, automatically be converted into the right to
receive $7.50 in cash (the “Merger Consideration”), subject to
applicable withholding taxes.
Pursuant to the Merger Agreement, at the Effective Time, each
option to purchase shares of Common Stock that is vested in
accordance with its terms and outstanding as of immediately prior
to the Effective Time (each, a “Vested Company Option”) will,
automatically and without any required action on the part of the
holder thereof, be cancelled and converted into the right to
receive an amount in cash, without interest, equal to the product
obtained by multiplying (x) the excess, if any, of (A) the Merger
Consideration over (B) the per-share exercise price for such Vested
Company Option, by (y) the total number of shares of Common Stock
underlying such Vested Company Option, subject to applicable
withholding taxes; provided, however, that if the exercise price
per share of Common Stock of such Vested Company Option is equal to
or greater than the Merger Consideration, such Vested Company
Option shall be cancelled without any cash payment or other
consideration being made in respect thereof. Each option to
purchase shares of Common Stock that is not vested and is
outstanding as of immediately prior to the Effective Time (each, an
“Unvested Company Option”) will, automatically and without any
required action on the part of the holder thereof, be converted
into the contingent right to receive an amount in cash, without
interest, equal to the product obtained by multiplying (x) the
excess, if any, of (A) the Merger Consideration over (B) the
per-share exercise price for such Unvested Company Option, by (y)
the total number of shares of Common Stock underlying such Unvested
Company Option; provided, however, that if the exercise price per
share of Common Stock of such Unvested Company Option is equal to
or greater than the Merger Consideration, such Unvested Company
Option shall be cancelled without any cash payment or other
consideration being made in respect thereof. The resulting amount
will, subject to certain exceptions, vest and become payable at the
same time as the Unvested Company Option from which such resulting
amount was converted would have vested and been payable pursuant to
its terms and will generally remain subject to the same terms and
conditions as were applicable to the Unvested Company Option(s)
immediately prior to the Effective Time.
Pursuant to the Merger Agreement, as of the Effective Time, each
restricted stock unit of the Company that that is outstanding as of
immediately prior to the Effective Time and (A) held by a
non-employee member of the Board (whether vested or unvested) or
(B) vested in accordance with its terms as of the Effective Time
(each, a “Vested Company RSU”) will, automatically and without any
required action on the part of the holder thereof, be cancelled and
converted into the right to receive an amount in cash, without
interest, equal to the product obtained by multiplying (x) the
total number of shares of Common Stock underlying such Vested
Company RSU, by (y) the Merger Consideration, subject to applicable
withholding taxes. Each restricted stock unit of the Company that
is not a Vested Company RSU (each, an “Unvested Company RSU”) and
is outstanding as of immediately prior to the Effective Time will,
automatically and without any required action on the part of the
holder thereof, be converted into the contingent right to receive
an amount in cash, without interest, equal to the product obtained
by multiplying (x) the total number of shares of Common Stock
underlying such Unvested Company RSU, by (y) the Merger
Consideration, which resulting amount will, subject to certain
exceptions, vest and become payable at the same time as the
Unvested Company RSU from which such resulting amount was converted
would have vested and been payable pursuant to its terms and will
otherwise remain subject to the same terms and conditions as were
applicable to such awards immediately prior to the Effective Time
(except for terms rendered inoperative by reason of the
transactions contemplated by the Merger Agreement or for such other
administrative or ministerial changes as in the reasonable and good
faith determination of Parent are appropriate to conform the
administration of the payment of the resulting amounts paid in
respect of such Unvested Company RSUs).
If the Merger is consummated, the Common Stock will be delisted
from the New York Stock Exchange and deregistered under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
Closing Conditions
Completion of the Merger is subject to certain closing conditions,
including (1) the adoption of the Merger Agreement by a majority of
the holders of the outstanding shares of Common Stock, (2) the
expiration or early termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended and any date before which a party to the Merger Agreement
or the parties thereto have committed in writing to the U.S.
Federal Trade Commission, the U.S. Department of Justice or any
Governmental Entity not to close the Merger shall have passed, (3)
certain regulatory actions in the United Kingdom and Australia, (4)
the absence of any order, injunction or law prohibiting the Merger,
(5) the accuracy of the each party’s representations and
warranties, subject to certain materiality standards set forth in
the Merger Agreement, (6) compliance in all material respects with
each party’s obligations under the Merger Agreement, (7) delivery
by the Company to Parent of payoff letters evidencing discharge of
certain specified Company indebtedness and (8) no Company Material
Adverse Effect (as defined in the Merger Agreement) having occurred
since the date of the Merger Agreement. Subject to the satisfaction
or waiver of such closing conditions, the parties currently expect
the transaction to close in the first half of 2023.
Go Shop; No Solicitation
Beginning as of the date of the Merger Agreement and continuing
until 11:59 p.m. (Pacific time) on December 10, 2022 (the “Go-Shop
Period”), the Company has the right to, among other things, (1)
solicit alternative acquisition proposals, (2) provide information
(including nonpublic information) to third parties in connection
therewith pursuant to an acceptable confidentiality agreement, and
(3) initiate or continue discussions with third parties in
connection therewith. From and after December 11, 2022, the Company
must comply with customary non-solicitation restrictions. Subject
to certain customary “fiduciary out” exceptions, the Board is
required to recommend that the Company’s stockholders adopt the
Merger Agreement.
Termination and Fees
Either the Company or Parent may terminate the Merger Agreement in
certain circumstances, including if (1) the Merger is not completed
by April 26, 2023 (the “End Date”), subject to certain limitations,
and provided that the End Date will automatically be extended until
October 26, 2023 if certain regulatory conditions have not been
satisfied as of the close of business on the date that is two
business days immediately prior to the then-current End Date, and
provided further that the End Date will automatically be extended
until January 26, 2024 if certain regulatory conditions have not
been satisfied as of the close of business on the date that is two
business days immediately prior to the then-current End Date under
specified circumstances, (2) a governmental authority of competent
jurisdiction has issued a final non-appealable governmental order
prohibiting the Merger, subject to certain exceptions, (3) the
Company’s stockholders fail to adopt the Merger Agreement, and (4)
the other party materially breaches its representations, warranties
or covenants in the Merger Agreement, subject in certain cases, to
the right of the breaching party to cure the breach. Parent and the
Company may also terminate the Merger Agreement by mutual written
consent.
Subject to certain limitations, the Company is also entitled to
terminate the Merger Agreement and receive a termination fee of
$67,760,000 from Parent if (1) Parent fails to consummate the
Merger following the satisfaction or waiver of the applicable
closing conditions or (2) Parent otherwise breaches its obligations
under the Merger Agreement and such breach is the primary cause of
the conditions to the consummation of the Merger being unable to be
satisfied. The Company is also entitled to receive this termination
fee from Parent if Parent terminates the Merger Agreement because
the Merger has not been completed by the End Date and at the time
of such termination, the Company could have validly terminated the
Merger Agreement for either of the reasons described in the
preceding sentence.
If the Merger Agreement is terminated in certain other
circumstances, including by the Company in order to enter into a
superior proposal or by Parent because the Board withdraws its
recommendation in favor of the Merger, the Company would be
required to pay Parent a termination fee of $33,880,000; provided
that a lower fee of $10,160,000 will apply with respect to a
termination by the Company prior to 11:59 p.m. (Pacific time) on
December 20, 2022 to enter into a superior proposal received during
the Go-Shop Period.
Financing
Parent has obtained equity financing commitments for the purpose of
financing the transactions contemplated by the Merger Agreement.
The Thoma Bravo Funds and Sunstone Partners II, LP, a Delaware
limited partnership, Sunstone Partners II-A, LP, a Delaware limited
partnership, Sunstone Partners Executive Fund II, LP, a Delaware
limited partnership, Sunstone Partners III-Main, LP, a Delaware
limited partnership and Sunstone Partners III-A, LP, a Delaware
limited partnership (“Sunstone” and, together with the Thoma Bravo
Funds, the “Equity Investors”) have committed to capitalize Parent
at the closing of the Merger on the terms and subject to the
conditions set forth in equity commitment letters. In addition, the
Equity Investors have guaranteed payment of the termination fee
payable by Parent under certain circumstances, as well as certain
reimbursement obligations that may be owed by Parent pursuant to
the Merger Agreement, subject to the terms and conditions set forth
in the Merger Agreement and a limited guarantee provided by the
Equity Investors to the Company.
Other Terms of the Merger Agreement
The Company has made customary representations, warranties and
covenants in the Merger Agreement, including, among others,
covenants to conduct its business in all material respects in the
ordinary course during the period between the date of the Merger
Agreement and the completion of the Merger. The parties have agreed
to take all actions necessary to consummate the Merger, including
cooperating to obtain the regulatory approvals necessary to
complete the Merger, subject to certain limitations.
The foregoing description of the Merger Agreement does not purport
to be complete and is qualified in its entirety by reference to the
full text of the Merger Agreement, a copy of which is attached
hereto as Exhibit 2.1 and incorporated herein by reference. A copy
of the Merger Agreement has been included to provide Company
stockholders and other security holders with information regarding
its terms and is not intended to provide any factual information
about the Company, Parent, Merger Sub or their respective
affiliates. The representations, warranties and covenants contained
in the Merger Agreement have been made solely for the purposes of
the Merger Agreement and as of specific dates; were made solely for
the benefit of the parties to the Merger Agreement; are not
intended as statements of fact to be relied upon by Company
stockholders or other security holders, but rather as a way of
allocating the risk between the parties in the event the statements
therein prove to be inaccurate; have been modified or qualified by
certain confidential disclosures that were made between the parties
in connection with the negotiation of the Merger Agreement, which
disclosures are not reflected in the Merger Agreement itself; may
no longer be true as of a given date; and may apply standards of
materiality in a way that is different from what may be viewed as
material by Company stockholders or other security holders. Company
stockholders and other security holders are not third-party
beneficiaries under the Merger Agreement (except, following the
Effective Time, with respect to Company stockholders’ right to
receive the Merger Consideration and the right of holders of
Company equity awards to receive the consideration provided for
such equity awards pursuant to the Merger Agreement) and should not
rely on the representations, warranties and covenants or any
descriptions thereof as characterizations of the actual state of
facts or condition of the Company, Parent, Merger Sub or their
respective affiliates. Moreover, information concerning the subject
matter of the representations and warranties may change after the
date of the Merger Agreement, which subsequent information may or
may not be fully reflected in the Company’s public disclosures. The
Company acknowledges that, notwithstanding the inclusion of the
foregoing cautionary statements, it is responsible for considering
whether additional specific disclosures of material information
regarding material contractual provisions are required to make the
statements in this Form 8-K not misleading. The Merger Agreement
should not be read alone but should instead be read in conjunction
with the other information regarding the Merger Agreement, the
Merger, the Company, Parent, Merger Sub, their respective
affiliates and their respective businesses, that will be contained
in, or incorporated by reference into, the Proxy Statement that the
Company will file, as well as in the Forms 10-K, Forms 10-Q, Forms
8-K and other filings that the Company will make with the U.S.
Securities and Exchange Commission (the “SEC”).
Important Information and Where to Find It
In connection with the proposed transaction, UserTesting will file
relevant materials with the SEC, including a preliminary and
definitive proxy statement. Promptly after filing the definitive
proxy statement, UserTesting will mail the definitive proxy
statement and a proxy card to UserTesting stockholders.
USERTESTING’S STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO)
CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR
INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTION
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION.
Stockholders of UserTesting will be able to obtain a free copy of
these documents, when they become available, at the website
maintained by the SEC at www.sec.gov or free of charge at
https://ir.usertesting.com.
Participants in the Solicitation
UserTesting and certain of its directors and executive officers may
be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information regarding
UserTesting’s directors and executive officers, including a
description of their direct interests, by security holdings or
otherwise, is contained in UserTesting’s Proxy Statement for its
2022 annual meeting of stockholders, which was filed with the SEC
on April 20, 2022. UserTesting stockholders may obtain additional
information regarding the direct and indirect interests of the
participants in the solicitation of proxies in connection with the
proposed transaction, including the interests of UserTesting
directors and executive officers in the transaction, which may be
different than those of UserTesting stockholders generally, by
reading the Proxy Statement and any other relevant documents that
are filed or will be filed with the SEC relating to the proposed
transaction. You may obtain free copies of these documents using
the sources indicated above.
Cautionary Statement Regarding Forward-Looking
Statements
This Current Report on Form 8-K contains “forward-looking
statements” within the meaning of the federal securities laws,
including Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Exchange Act. These forward-looking
statements are based on UserTesting’s current expectations,
estimates and projections about the expected date of closing of the
proposed transaction and the potential benefits thereof, its
business and industry, management’s beliefs and certain assumptions
made by UserTesting, Thoma Bravo and Sunstone Partners, all of
which are subject to change. In this context, forward-looking
statements often address expected future business and financial
performance and financial condition, and often contain words such
as “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,”
“seek,” “see,” “will,” “may,” “would,” “might,” “potentially,”
“estimate,” “continue,” “expect,” “target,” similar expressions or
the negatives of these words or other comparable terminology that
convey uncertainty of future events or outcomes. All
forward-looking statements by their nature address matters that
involve risks and uncertainties, many of which are beyond
UserTesting’s control, and are not guarantees of future results,
such as statements about the consummation of the proposed
transaction and the anticipated benefits thereof. These and other
forward-looking statements, including the failure to consummate the
proposed transaction or to make or take any filing or other action
required to consummate the transaction on a timely manner or at
all, are not guarantees of future results and are subject to risks,
uncertainties and assumptions that could cause actual results to
differ materially from those expressed in any forward-looking
statements. Accordingly, there are or will be important factors
that could cause actual results to differ materially from those
indicated in such statements and, therefore, you should not place
undue reliance on any such statements and caution must be exercised
in relying on forward-looking statements. Important risk factors
that may cause such a difference include, but are not limited to:
(i) the completion of the proposed transaction on anticipated
terms and timing, including obtaining stockholder and regulatory
approvals, anticipated tax treatment, unforeseen liabilities,
future capital expenditures, revenues, expenses, earnings,
synergies, economic performance, indebtedness, financial condition,
losses, future prospects, business and management strategies for
the management, expansion and growth of UserTesting’s business and
other conditions to the completion of the transaction;
(ii) the impact of the COVID-19 pandemic, inflation, foreign
exchange rates and general economic conditions on UserTesting’s
business; (iii) UserTesting’s ability to implement its
business strategy; (iv) significant transaction costs
associated with the proposed transaction; (v) potential
litigation relating to the proposed transaction; (vi) the risk
that disruptions from the proposed transaction will harm
UserTesting’s business, including current plans and operations;
(vii) attraction and retention of qualified employees;
(viii) potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
proposed transaction; (ix) general economic and market
developments and conditions; (x) UserTesting’s ability to stay
in compliance with laws and regulations that currently apply or
become applicable to UserTesting’s business both in the United
States and internationally; (xi) potential business
uncertainty, including changes to existing business relationships,
during the pendency of the merger that could affect UserTesting’s
financial performance; (xii) restrictions during the pendency
of the proposed transaction that may impact UserTesting’s ability
to pursue certain business opportunities or strategic transactions;
and (xiii) unpredictability and severity of catastrophic
events, including, but not limited to, acts of terrorism or
outbreak of war or hostilities, as well as UserTesting’s response
to any of the aforementioned factors. These risks, as well as other
risks associated with the proposed transaction, are more fully
discussed in the Proxy Statement to be filed with the SEC in
connection with the proposed transaction. While the list of factors
presented here is, and the list of factors presented in the Proxy
Statement will be, considered representative, no such list should
be considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements.
Consequences of material differences in results as compared with
those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks,
any of which could have a material adverse effect on UserTesting’s
financial condition, results of operations or liquidity.
UserTesting does not assume any obligation to publicly provide
revisions or updates to any forward-looking statements, whether as
a result of new information, future developments or otherwise,
should circumstances change, except as otherwise required by
securities and other applicable laws.
|
Item 9.01 |
Financial Statements and
Exhibits. |
(d) Exhibits
* Certain schedules and exhibits have been omitted
pursuant to Item 601(a)(5) of Regulation S-K. UserTesting will
furnish to the SEC copies of any such schedules upon
request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
Dated: October 27, 2022
| |
UserTesting,
Inc. |
| |
|
|
| |
By: |
/s/ Jon Pexton |
| |
Name: |
Jon Pexton |
| |
Title: |
Chief Financial
Officer |
UserTesting (NYSE:USER)
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