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(State or other jurisdiction of incorporation or organization)
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(I.R.S. employer identification number)
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(Address of principal executive offices)
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(Zip Code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of Class
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Trading Symbol(s)
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Name of each exchange on which registered
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Item 1.01 |
Entry into a Definitive Material Agreement.
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• |
Popular will pay consideration of $196,600,000 in exchange for the Popular Assets, which will be paid in the form of Evertec common stock currently held by Popular
valued at $42.84 per share, and will be subject to certain adjustments.
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• |
Each of Evertec and Popular have agreed to customary covenants. Evertec has agreed to operate the Popular Assets and its related business in the ordinary course
prior to Closing, subject to certain exclusions and limitations, and Popular agreed not to dispose of those shares of Evertec common stock necessary to pay the consideration referenced above. Additionally, both parties agreed, in the
pre-closing and post-closing periods, to cooperate with respect to certain separation and integration activities and in connection with certain regulatory matters.
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• |
Popular has agreed to take certain actions expected to result in Evertec no longer being considered a “subsidiary” of Popular for purposes of the Bank Holding
Company Act by the date that is 90 days following the Closing, including selling its shares of Evertec common stock in the open market and, if necessary, converting certain Evertec common stock into non-voting stock to reduce its voting
interest to 4.5%.
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• |
Subject to certain limitations, Evertec has agreed to indemnify Popular for losses relating to the operation of the Popular Assets prior to the Closing and each
party has agreed to indemnify the other in respect of a breach of its representations and warranties and covenants included in the APA as well as in respect of certain liabilities and costs that have been allocated between the parties.
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• |
The Closing is subject to certain conditions for the benefit of Evertec and Popular, including the completion of certain separation and integration activities, the
non-occurrence of certain material adverse events, the entry into amendments to certain commercial and other agreements among the parties and/or their affiliates, as well as regulatory and other customary closing conditions.
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• |
The APA contains customary termination rights, including that either party can terminate the APA if certain closing conditions are unable to be satisfied (following
a cure period, if applicable) or if the transactions have not been consummated by February 24, 2023, which date is subject to further extension if the sole reason the Closing has not occurred is the failure to receive certain regulatory
approvals.
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• |
As a condition to the Closing, Popular and BPPR (the “Popular Parties”) and Evertec Group will enter into an amended and restated version of the Master Services
Agreement (such current agreement, the “Original MSA” and as amended, the “A&R MSA”), a form of which has been agreed by the parties and attached to the APA. The A&R MSA contemplates, among other things, a three-year extension of
the term (through 2028, with additional extensions subject to agreement between Evertec Group and the Popular Parties), the inclusion of annual minimum fees, and adjustments to the existing CPI pricing escalator clause. The A&R MSA
also eliminates the exclusivity provisions in the Original MSA. The full text of the form of such A&R MSA is attached as Item 10.2.
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• |
As a condition to the Closing, BPPR and Evertec Group will enter into an amended and restated version of the current Merchant Acquiring Independent Sales
Organization Agreement (such current agreement, the “Original ISO Agreement” and as amended, the “A&R ISO Agreement”). A form of the A&R ISO Agreement has been agreed by the parties and attached to the APA. Pursuant to the
A&R ISO Agreement, BPPR will continue to sponsor Evertec Group with VISA U.S.A., Inc. and VISA International, Inc. (collectively, “VISA”), Discover Financial Services, LLC (“Discover”), MasterCard International, Inc. (“MCI” and
together with VISA and Discover and any other credit or debit card issuers that may in the future be covered under the ISO Agreement, the “Associations”), in order to allow Evertec Group to provide credit and debit card processing
services to merchants in respect of credit and debit cards issued under the auspices of the Associations. The A&R ISO Agreement contemplates, among other things, a ten-year term extension (through 2035, with additional 3-year renewal
terms (subject to earlier termination in the case of certain default events)) and replaces the fee arrangements under the Original ISO Agreement with a requirement that Evertec Group pay BPPR a portion of the processing fees it collects
from merchants. The full text of the form of such A&R ISO Agreement is attached as Item 10.3.
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Item 9.01 |
Financial Statements and Exhibits.
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Number
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Exhibit
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10.1
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Asset Purchase Agreement by and among Evertec, Inc., Evertec Group, LLC Popular, Inc. and Banco Popular de Puerto Rico dated as
of February 24, 2022.
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10.2
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Form of Second Amended and Restated Master Service Agreement among Popular, Inc., Banco Popular de Puerto Rico and Evertec
Group, LLC and its subsidiaries.
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10.3
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Form of Second Amended and Restated Independent Sales Organization Sponsorship and Services Agreement between Evertec Group,
LLC and Banco Popular de Puerto Rico.
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99.1
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Press Release re: Evertec announces extensions of Key Agreements with Popular and Sale of Assets dated February 24, 2022
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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EVERTEC, Inc.
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(Registrant)
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Date: February 24, 2022
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By:
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/s/ Joaquin A. Castrillo-Salgado
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Name: Joaquin A. Castrillo-Salgado
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Title: Chief Financial Officer
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Number
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Exhibit
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Asset Purchase Agreement by and among Evertec, Inc., Evertec Group, LLC Popular, Inc. and Banco Popular de Puerto Rico dated as
of February 24, 2022.
|
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Form of Second Amended and Restated Master Service Agreement among Popular, Inc., Banco Popular de Puerto Rico and Evertec
Group, LLC and its subsidiaries.
|
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Form of Second Amended and Restated Independent Sales Organization Sponsorship and Services Agreement between Evertec Group,
LLC and Banco Popular de Puerto Rico.
|
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Press Release re: Evertec announces extensions of Key Agreements with Popular and Sale of Assets dated February 24, 2022
|
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104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |