| Item
1.01. | Entry
Into a Material Definitive Agreement |
The
Equity Purchase Agreement
On
July 31, 2022, Ingevity Corporation, a Delaware corporation (“Ingevity”), entered into an Equity Purchase Agreement (the
“Purchase Agreement”), by and among, Ingevity, Ozark Holdings, Inc., an Alabama corporation (“Seller”), Ozark
Materials, LLC, an Alabama limited liability company (“Ozark Materials”), and Ozark Logistics, LLC, an Alabama limited liability
company (“Ozark Logistics” and, together with Ozark Materials, the “Companies” and, each, a “Company”),
pursuant to which, among other things, Ingevity will acquire all of the issued and outstanding limited liability company membership interests
of each Company (the “Transaction”).
The
purchase price for the Transaction is $325 million, subject to a customary adjustment for working capital, indebtedness and transaction
expenses.
Ingevity’s
obligation to consummate the Transaction is subject to certain customary conditions, including, without limitation, (i) the termination
of all applicable waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the
absence of any order resulting in the imposition of certain antitrust remedies as more fully described in the Purchase Agreement and
(ii) the absence of a Material Adverse Effect (as defined in the Purchase Agreement). Each party’s obligation to consummate the
Transaction is subject to certain other conditions, including (i) the accuracy of the other party’s representations and warranties,
(ii) the other party’s compliance with its covenants contained in the Purchase Agreement and (iii) the absence of any Action (as
defined in the Purchase Agreement) or any preliminary or permanent injunction or other order preventing the consummation of the Transaction.
Consummation of the Transaction is not subject to a financing or similar condition.
Each
party has made customary representations and warranties in the Purchase Agreement and agreed to customary covenants, including covenants
with respect to tax matters and, in the case of Seller, covenants with respect to the operation of the business of the Companies
and their subsidiaries prior to the closing.
The
Purchase Agreement contains customary termination rights for Ingevity and Seller. Subject to certain limitations, the Purchase Agreement
may be terminated by either party if (i) the Transaction is not consummated by October 28, 2022, (ii) there is a material violation or
material breach of the other party’s representations and warranties or covenants such that the applicable closing condition would
not be satisfied (subject to customary rights to cure such violations or breaches) or (iii) the Transaction becomes subject to a final
and non-appealable Order (as defined in the Purchase Agreement) permanently restraining, enjoining or otherwise prohibiting the Transaction.
In addition, the parties may terminate the Purchase Agreement by mutual agreement.
The
Transaction is expected to close by early Q4 2022.
The
foregoing summary of the Purchase 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 Purchase Agreement filed as Exhibit 2.1 hereto and incorporated herein by
reference. The Purchase Agreement contains representations and warranties by each of the parties to the Purchase Agreement, which were
made only for purposes of the Purchase Agreement and as of specified dates. The representations, warranties and covenants in the Purchase
Agreement were made solely for the benefit of the parties to the Purchase Agreement, are subject to limitations agreed upon among the
parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties
to the Purchase Agreement instead of establishing these matters as facts, and are subject to standards of materiality applicable to the
parties that may differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants
or any description thereof as characterizations of the actual state of facts or condition of Ingevity, the Companies or any of their
respective subsidiaries or affiliates. Moreover, the information concerning the subject matter of the representations, warranties and
covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in Ingevity’s
public disclosures.
The
Transaction Support Agreement
In
connection with entering into the Purchase Agreement, on July 31, 2022, Ingevity entered into a Transaction Support Agreement (the “Support
Agreement”) with William H. Carr (“Bill Carr”), Jerry N. Carr (“Jerry Carr”), Leon M. Gross, III (“Lee
Gross” and, together with Bill Carr and Jerry Carr, the “Equityholders” and each, an “Equityholder”), Seller
and each of the other entities that are signatories thereto (such entities, the “Excluded Subsidiaries” and each, an “Excluded
Subsidiary”).
The
Support Agreement requires, among other things, that Seller, the Equityholders and the Excluded Subsidiaries (a) comply with customary
restrictive covenants, including non-competition covenants with respect to the business of the Companies and (b) indemnify Ingevity and
certain of its representatives and affiliates for certain matters as more fully described in the Support Agreement.
The
foregoing summary of the Support Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full
text of the Support Agreement filed as Exhibit 10.1 hereto and incorporated herein by reference.
Forward-Looking
Statements
This
Current Report on Form 8-K contains “forward-looking statements” within the meaning of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Such statements generally include
the words “will,” “plans,” “intends,” “targets,” “expects,” “outlook,”
“believes,” “anticipates” or similar expressions. Forward-looking statements may include, without limitation,
the potential benefits of the acquisition of Ozark Materials and Ozark Logistics pursuant to the Transaction; the anticipated timing
of the closing of the Transaction; expected financial positions, guidance, results of operations and cash flows; financing plans; business
strategies and expectations; operating plans; impact of COVID-19; capital and other expenditures; competitive positions; growth opportunities
for existing products; benefits from new technology and cost-reduction initiatives, plans and objectives; litigation related strategies
and outcomes; and markets for securities. Actual results could differ materially from the views expressed. Factors that could cause actual
results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements
to prove incorrect, include, without limitation, risks related to the satisfaction of the conditions to closing the Transaction (including
the failure to obtain necessary regulatory approval) in the anticipated timeframe or at all; risks that the expected benefits from the
proposed Transaction will not be realized or will not be realized within the expected time period; the risk that the businesses will
not be integrated successfully; significant transaction costs; unknown or understated liabilities; adverse effects from the COVID-19
pandemic; adverse effects from general global economic, geopolitical and financial conditions beyond our control, including inflation
and the ongoing war between Russia and Ukraine; risks related to our international sales and operations; adverse conditions in the automotive
market; competition from substitute products, new technologies and new or emerging competitors; worldwide air quality standards; a decrease
in government infrastructure spending; adverse conditions in cyclical end markets; the limited supply of or lack of access to sufficient
crude tall oil and other raw materials; integration of future acquisitions; the provision of services by third parties at several facilities;
supply chain disruptions; natural disasters and extreme weather events; other unanticipated problems such as labor difficulties (including
work stoppages), equipment failure or unscheduled maintenance and repair; attracting and retaining key personnel; dependence on certain
large customers; legal actions associated with our intellectual property rights; protection of our intellectual property and other proprietary
information; information technology security breaches and other disruptions; complications with designing or implementing our new enterprise
resource planning system; government policies and regulations, including, but not limited to, those affecting the environment, climate
change, tax policies, tariffs and the chemicals industry; and losses due to lawsuits arising out of environmental damage or personal
injuries associated with chemical or other manufacturing processes, and the other factors detailed from time to time in the reports we
file with the Securities and Exchange Commission (the “SEC”), including those described in Part I, Item 1A. Risk Factors
in our 2021 Annual Report on Form 10-K as well as in our other filings with the SEC. These forward-looking statements speak only to management’s
beliefs as of the date of this Current Report on Form 8-K. Ingevity assumes no obligation to provide any revisions to, or update, any
projections and forward-looking statements contained in this Current Report on Form 8-K.