Item 1.01. Entry into a Material Definitive Agreement.
Purchase and Sale Agreement
On July 7, 2017,
Fortress Asset Management LLC, a Delaware limited liability company (the “
LP Seller
”), Fortress Asset Management GP LLC, a Delaware limited liability company (the “
GP Seller
” and, together with the LP Seller, the
“
Sellers
”), Logan Circle Partners, L.P., a Pennsylvania limited partnership ( “
Logan Circle
”), and Logan Circle Partners GP, LLC, a Pennsylvania limited liability company (the “
General Partner
”),
and in a limited capacity, FIG LLC, a Delaware limited liability company (the “
Employer Entity
”), each of which is an indirect subsidiary of Fortress Investment Group LLC, a Delaware limited liability company (the
“
Company
”), entered into a Purchase and Sale Agreement (the “
Purchase and Sale Agreement
”) with MetLife, Inc., a Delaware corporation (the “
Parent Buyer
”), pursuant to which, among other things, the
Parent Buyer will purchase from the Sellers all of the Sellers’ interests in Logan Circle and the General Partner (the “
Logan Circle Sale
”). The aggregate purchase price is approximately $250,000,000, subject to certain
customary closing and post-closing adjustments and an allocation of $55,000,000 of the purchase price to an employee long-term incentive plan.
The
Purchase and Sale Agreement contains certain customary representations, warranties and covenants of each party, including, among others, certain customary covenants regarding the conduct of the business of Logan Circle, the General Partner and their
respective controlled affiliates during the period between the execution of the Purchase and Sale Agreement and the consummation of the transactions contemplated thereby (the “
Closing
”). The Purchase and Sale Agreement also contains
certain indemnification provisions.
The Closing is subject to various closing conditions, including, among others, (i) the receipt of approval, or
the expiration or termination of the waiting period, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the absence of any preliminary or permanent injunction or other order preventing the Closing, (iii) the
revenue
run-rate
for all investment advisory clients of the business at Closing being equal to or greater than 80% of the revenue
run-rate
for such clients as of
March 31, 2017, and (iv) the revenue
run-rate
for certain specified investment advisory clients of the business at Closing being equal to or greater than 75% of the revenue
run-rate
for such clients as of March 31, 2017.
The Sellers and the Parent Buyer have the right to terminate the
Purchase and Sale Agreement under certain circumstances. Those circumstances include, but are not limited to, (1) mutual consent, (2) material uncured breach by the other party group, (3) failure to consummate the transactions by
December 31, 2017, or (4) on account of a final,
non-appealable
order of any governmental authority that permanently restrains, enjoins or otherwise prohibits the Closing. In addition, the Sellers
may terminate the Purchase and Sale Agreement if the Closing has not occurred by October 31, 2017.
The representations, warranties and covenants set
forth in the Purchase and Sale Agreement have been made only for the purposes of the Purchase and Sale Agreement and solely for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting parties, including
being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties instead of establishing these matters as facts. In addition, such representations and warranties were made only as of the dates
specified in the Purchase and Sale Agreement and information regarding the subject matter thereof may change after the date of the Purchase and Sale Agreement. Accordingly, the Purchase and Sale Agreement is included with this filing only to provide
investors with information regarding its terms and not to provide investors with any other factual information regarding Logan Circle or its business as of the date of the Purchase and Sale Agreement or as of any other date.
The foregoing summary of the Purchase and Sale Agreement is qualified in its entirety by reference to the full text of the Purchase and Sale Agreement filed
as Exhibit 2.1 hereto and incorporated herein by reference.
Amendment to Merger Agreement
In connection with the Purchase and Sale Agreement, on July 7, 2017, the Company, SB Foundation Holdings LP, a Cayman Islands exempted limited partnership
(“
Parent
”), and Foundation Acquisition LLC, a Delaware limited liability company (the “
Merger Sub
”), entered into Amendment No. 1 to the Agreement and Plan of Merger (the “
Amendment
”), which
amends the Agreement and Plan of Merger dated February 14, 2017, by and among the Company, Parent and Merger Sub (the “
Merger Agreement
”). Pursuant to the Amendment, among other things, Parent consented to the entry into the
Purchase and Sale Agreement and consummation of the transactions contemplated thereby. The foregoing summary of the Amendment is qualified in its entirety by reference to the full text of the Merger Agreement and the Amendment filed as Exhibits 2.2
and 2.3 hereto, respectively, and incorporated herein by reference.
Important Additional Information
In connection with the proposed merger (the “
Merger
”) contemplated by the Merger Agreement, as amended by the Amendment, the Company has filed
relevant materials with the SEC, including a definitive proxy statement on Schedule 14A. Following the filing of
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the definitive proxy statement with the SEC, the Company mailed the definitive proxy statement and a proxy card to each shareholder entitled to vote at the special meeting relating to the Merger.
SHAREHOLDERS ARE URGED TO CAREFULLY READ THESE MATERIALS IN THEIR ENTIRETY (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY WILL FILE OR FURNISH WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. The proxy statement and other relevant materials, and any and all documents filed or furnished by the Company with the SEC, may also be obtained for free at the SEC’s website at
www.sec.gov
. In
addition, shareholders may obtain free copies of the documents filed with the SEC by the Company via the Company’s Public Shareholders section of its website at
www.fortress.com
or by contacting Investor Relations.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this Current Report may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform
Act of 1995. These statements are generally identified by the use of words such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “will,” “should,”
“could,” “would,” “seek,” “approximately,” “predict,” “intend,” “plan,” “estimate,” “anticipate,” “opportunity,” “pipeline,”
“comfortable,” “assume,” “remain,” “maintain,” “sustain,” “achieve” or the negative version of those words or other comparable words. Forward-looking statements are not historical facts,
but instead represent only the Company’s beliefs as of the date of this report regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Numerous factors could cause actual
events to differ from these forward-looking statements, and any such differences could cause our actual results to differ materially from the results expressed or implied by these forward-looking statements. Such factors include but are not limited
to the following: (1) the Company may be unable to obtain shareholder approval as required for the Merger; (2) conditions to the closing of the Merger or the Logan Circle Sale, including the obtaining of required regulatory approvals, may
not be satisfied; (3) the Merger or the Logan Circle Sale may involve unexpected costs, liabilities or delays; (4) the business of the Company may suffer as a result of uncertainty surrounding the Merger or the Logan Circle Sale;
(5) the outcome of any legal proceedings related to the Merger or the Logan Circle Sale; (6) the Company may be adversely affected by other economic, business, and/or competitive factors, including the net asset value of assets in certain
of the Company’s funds; (7) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement or the Purchase and Sale Agreement; (8) risks that the Merger or the Logan Circle
Sale disrupt current plans and operations and the potential difficulties in employee retention as a result of the Merger or the Logan Circle Sale; (9) other risks to consummation of the Merger or the Logan Circle Sale, including the risk that
the Merger or Logan Circle Sale will not be consummated within the expected time period or at all; and (10) the risks described from time to time in the Company’s reports filed with the SEC under the heading “Risk Factors,”
including the Annual Report on Form
10-K
for the fiscal year ended December 31, 2016, Quarterly Reports on Form
10-Q
and Current Reports on Form
8-K
and in other of the Company’s filings with the SEC. In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor
that may cause its actual results to differ from those expressed or implied in any forward-looking statements.
Accordingly, you should not place undue
reliance on any forward-looking statements contained in this Current Report, and you should not regard any forward-looking statement as a representation by the Company or any other person that the future plans, estimates or expectations currently
contemplated by the Company will be achieved. The Company can give no assurance that the expectations of any forward-looking statement will be obtained. Such forward-looking statements speak only as of the date of this Current Report. The Company
expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or
circumstances on which any statement is based.
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