Item 1.01.
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Entry into a Material Definitive Agreement.
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Merger Agreement
On July 13, 2016, Imprivata, Inc. (the
Company
) entered into an Agreement and Plan of Merger (the
Merger Agreement
)
with Project Brady Holdings, LLC (
Parent
) and Project Brady Merger Sub, Inc., a wholly-owned subsidiary of Parent (
Merger Sub
), providing for the merger of Merger Sub with and into the Company (the
Merger
), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub were formed by an affiliate of private equity investment firm Thoma Bravo, LLC (
Thoma Bravo
).
At the effective time of the Merger (the
Effective Time
), each share of common stock, par value $0.001 per share, of the Company (the
Company Common Stock
) issued and outstanding as of immediately prior to the Effective Time (other than dissenting shares or shares owned by Parent or Merger Sub) will be cancelled and automatically converted into the right to
receive cash in an amount equal to $19.25, without interest thereon (the
Per Share Price
).
Each option to purchase a share of Company
Common Stock that is outstanding as of the Effective Time will accelerate in full in connection with the transaction and will be cancelled in exchange for the right to receive the excess, if any, of the Per Share Price over the exercise price of
such option, less applicable withholding taxes. Each restricted stock unit that is outstanding as of the Effective Time will accelerate in full in connection with the transaction and will be cancelled in exchange for the right to receive the
Per Share Price, less applicable withholding taxes. Restrictions on shares of restricted stock will be caused to lapse immediately prior to the Effective Time, and the shares will be subject to the same terms and conditions of the Merger
Agreement that are applicable to all other shares of Company Common Stock.
Parent and Merger Sub have secured committed equity financing to be provided
by an investment fund affiliated with Thoma Bravo, the aggregate proceeds of which, together with cash on the Companys balance sheet, will be sufficient for Parent and Merger Sub to pay the aggregate merger consideration and all related fees
and expenses.
Consummation of the Merger is subject to customary closing conditions, including, without limitation, the absence of certain legal
impediments, the expiration or termination of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and approval by the Companys stockholders.
The Merger Agreement contains representations, warranties and covenants of the parties customary for a transaction of this type, including, among other
things, a covenant of the Company not to solicit alternative transactions or to provide information or enter into discussions in connection with alternative transactions, subject to certain exceptions to allow the Companys board of directors
to exercise its fiduciary duties.
The Merger Agreement may be terminated under certain circumstances, including in specified circumstances in connection
with superior proposals, or if the Merger is not consummated by December 10, 2016. Upon the termination of the Merger Agreement, under specified circumstances, the Company will be required to pay Parent a termination fee of $13.6 million.
The representations, warranties and covenants of the Company contained in the Merger Agreement have been made solely for the benefit of Parent and Merger Sub.
In addition, such representations, warranties and covenants (i) have been made only for purposes of the Merger Agreement, (ii) have been qualified by (a) subject to certain terms and conditions, matters specifically disclosed in the
Companys filings with the SEC prior to the date of the Merger Agreement and (b) confidential disclosures made to Parent and Merger Sub in the disclosure letter delivered in connection with the Merger Agreement, (iii) are subject to
materiality qualifications contained in the Merger
Agreement which may differ from what may be viewed as material by investors, (iv) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger
Agreement and (v) have been included in the Merger Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as fact. Accordingly, the Merger Agreement is included with this filing only to
provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding the Company or its business.
Investors 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 or any of its subsidiaries or 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 Companys public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Company that is or will be contained in, or
incorporated by reference into, the Annual Reports on Form 10-K, Current Reports on Form 10-Q and other documents that the Company files with the SEC.
The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified
in its entirety by, the full text of the Merger Agreement, a copy of which is attached as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.
Voting Agreement
Concurrently with the execution of the
Merger Agreement, Parent entered into voting agreements (the
Voting Agreements
) with each director and executive officer of the Company (and parties related to or affiliated with such directors and executive officers)
(collectively, the
Company Common Stockholders
), which collectively hold approximately 27% of the outstanding shares of Company Common Stock. Under the Voting Agreements, the Company Common Stockholders agree, during the term of
the Voting Agreements, to vote their shares of Company Common Stock (i) in favor of the adoption of Merger Agreement and the approval of the transactions contemplated thereby and (ii) against any alternative acquisition proposal, and not
to, directly or indirectly, sell, transfer, exchange or otherwise dispose of their shares, subject to certain limited exceptions. The form of Voting Agreement is provided as Exhibit A to the Merger Agreement, which is attached as Exhibit 2.1 to this
Current Report on Form 8-K and incorporated herein by reference.