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): March 1, 2019
NEXEO SOLUTIONS, INC.
(Pilates Merger Sub II LLC, as Successor by Merger to Nexeo Solutions, Inc. )
(Exact Name of Registrant as specified in its charter)
| Delaware | 001-36477 | 46-5188282 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
| 3 Waterway Square Place, Suite 1000 The Woodlands, Texas |
77380 | |||
| (Address of principal executive offices) | (Zip Code) | |||
(281) 297-0700
(Registrant’s telephone number, including area code)
Not Applicable
(Registrant’s name or former address, if change since last report)
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:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | 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)) |
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 ☐
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. ☐
Introductory Note
On February 28, 2019, Univar Inc., a Delaware corporation (“Univar”) completed its previously announced acquisition of Nexeo Solutions, Inc., a Delaware corporation (“Nexeo”), pursuant to the Agreement and Plan of Merger Agreement, dated September 17, 2018 (the “Merger Agreement”), among Nexeo, Univar, Pilates Merger Sub I Corp, a Delaware corporation and direct wholly owned subsidiary of Univar (“Merger Sub I”), and Pilates Merger Sub II LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Univar (“Merger Sub II”). Pursuant to the terms of the Merger Agreement (i) Merger Sub I merged with and into Nexeo (the “Initial Merger”), with Nexeo surviving the Initial Merger as a wholly owned subsidiary of Univar, and (ii) immediately following the Initial Merger, Nexeo merged with and into Merger Sub II (the “Subsequent Merger” and together with the Initial Merger, the “Mergers”), with Merger Sub II surviving as the surviving company and wholly owned subsidiary of Univar in the Subsequent Merger (the “Surviving Company”). The events described in this Current Report on Form 8-K occurred in connection with the consummation of the Mergers.
| Item 1.02 | Termination of Material Definitive Agreement. |
The information set forth in the introductory note and under Item 2.01 of this Current Report on Form 8-K is incorporated by reference herein.
Nexeo ABL Credit Facility
Effective as of February 28, 2019, Nexeo Solutions, LLC, a Delaware limited liability company (“Solutions”), repaid all amounts outstanding under its $575 million multicurrency ABL credit facility, dated as of June 9, 2016 (the “Nexeo ABL Credit Facility”), by and among Solutions, each domestic subsidiary of Solutions from time to time party thereto, Nexeo Solutions Canada Corp., a Canadian corporation, Nexeo Solutions Holdings, LLC, a Delaware limited liability company (“Holdings”), Nexeo Solutions Sub Holding Corp. (“Sub Holdco”), the lenders, and Bank of America, N.A., as administrative agent for the lenders, and terminated the Nexeo ABL Facility.
Nexeo Term Loan Credit Agreement
Effective as of February 28, 2019, Solutions repaid all amounts outstanding under its Credit Agreement, dated as of June 9, 2016 (the “Nexeo Term Loan Credit Agreement”), by and among the Solutions, Holdings, Sub Holdco, each lender from time to time party thereto, and Bank of America, N.A., as administrative agent and collateral agent, and terminated the Nexeo Term Loan Credit Agreement.
Tax Receivable Agreement
On February 28, 2018, in connection with the Mergers, the Company terminated the Tax Receivable Agreement, dated as of June 9, 2016, among Nexeo, Nexeo Holdco, LLC, TPG VI Nexeo I, L.P., TPG VI Nexeo II, L.P. and TPG VI FOF Nexeo, L.P. pursuant to that certain Tax Receivable Termination and Settlement Agreement filed as Exhibit 10.1 to Nexeo’s Current Report on Form 8-K filed on September 18, 2018.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
As described in the introductory note, which is incorporated herein by reference, on February 28, 2019, pursuant to the terms and conditions of the previously announced Merger Agreement, the Mergers were completed.
In connection with the Initial Merger, each full share of common stock, par value $0.0001 per share, of Nexeo (collectively, the “Nexeo Common Shares”) issued and outstanding immediately prior to the effective time of the Initial Merger (such time, the “Initial Effective Time”) (other than (i) Nexeo Common Shares owned by Univar, Nexeo or any direct or indirect wholly owned subsidiary of Nexeo or Univar (including Merger Sub I and Merger Sub II) and (ii) Nexeo Common Shares owned by stockholders who have perfected and not withdrawn a demand for appraisal rights pursuant to the Delaware General Corporations Law, as amended) was converted into the right to receive (A) the Cash Consideration, described below, and (B) 0.305 of a share of common stock, par value $0.01 per share, of Univar (“Univar Common Stock”) (the “Stock Consideration” and, together with the Cash Consideration and any cash in lieu of fractional shares of Univar Common Stock, the “Merger Consideration”). No fractional Univar Common Stock were issued in the Mergers, and instead each holder of a Nexeo Common Share converted pursuant to the terms of the previous sentence who would otherwise have been entitled to receive a fraction of a share of Univar Common Stock (after taking into account Nexeo Common Shares held by such holder) received, in lieu of such fractional Univar Common Stock, cash (without interest) in an amount equal to such fractional amount of Univar Common Stock multiplied by $23.29, the last reported sale price of Univar Common Stock on February 27, 2019, the last complete trading day prior to the date of the Initial Effective Time.
Pursuant to the terms of the Merger Agreement, the “Cash Consideration” was $3.02 per Nexeo Common Share, which amount reflects a reduction by $0.27 per Nexeo Common Share based on the closing price of Univar Common Stock on February 27, 2019, the day prior to the closing of the Mergers.
The stock consideration payable to former holders of Nexeo Common Shares and related stock awards, described below, consists, in the aggregate, of approximately 28 million shares of Univar Common Stock, or approximately 16% of the issued and outstanding Univar Common Stock following the completion of the transaction.
Following the Initial Effective Time, Nexeo’s units (the “Nexeo Units”), consisting of one Nexeo Common Share and one Nexeo warrant, were split into one Nexeo Common Share, which was converted into the right to receive the Merger Consideration in the Initial Merger, and one Nexeo warrant (a “Nexeo Warrant”), which remained outstanding and was assumed by Merger Sub II as successor to Nexeo in the Subsequent Merger. Following the Initial Effective Time, each outstanding and unexercised Nexeo Warrant, including Nexeo Warrants retained by Nexeo unitholders after the split of the Nexeo units, is exercisable for 0.1525 shares of Univar Common Stock and $1.51 in cash, which represents the Merger Consideration that would have been payable in respect of the one-half (1/2) share of Nexeo Common Stock that the holder of each Nexeo Warrant would have been entitled to receive had such holder exercised such Nexeo Warrant immediately prior to the Initial Effective Time, upon the terms and conditions specified in Nexeo Warrants and the Warrant Agreement, dated as of June 5, 2014 (the “Nexeo Warrant Agreement”), by and between WL Ross Holding Corp and Continental Stock Transfer & Trust Company, filed as Exhibit 4.1 to Nexeo’s Current Report on Form 8-K filed on June 16, 2014. Effective February 28, 2019, Univar appointed Equiniti Trust Company (“Equiniti”) as successor warrant agent pursuant to the Nexeo Warrant Agreement, and Equiniti assumed the obligations of the warrant agent under the Nexeo Warrant Agreement.
At the Initial Effective Time, with respect to each outstanding option to purchase Nexeo Common Shares (each, a “Company Option”), whether vested or unvested, was: (i) if the exercise price of such Company Option was equal to or greater than the sum of (A) the Cash Consideration plus (B) the product obtained by multiplying (x) the Stock Consideration by (y) the volume weighted average closing sale price of one share of Univar Common Stock as reported on the NYSE for the ten (10) consecutive trading days ending on February 27, 2019, the trading day immediately preceding the Initial Effective Time, or $23.49 (the “Per Share Cash Equivalent Consideration”), such Company Option was terminated and cancelled as of immediately prior to the Initial Effective Time, without any consideration being payable in respect thereof, and has no further force or effect, or (ii) if the exercise price of such Company Option was less than the Per Share Cash Equivalent Consideration, was terminated and cancelled as of immediately prior to the Initial Effective Time and converted into the right to receive, in respect of each “net share” covered by such Company Option, the Merger Consideration, net of any taxes, the per share Merger Consideration. The number of “net shares” covered by such Company Option was determined in accordance with the formula set forth in the Merger Agreement and took in account the exercise price of the applicable Company Option.
Each outstanding share of restricted stock (each, a “Company Restricted Stock Award”) that was outstanding as of immediately prior to the Effective Time, whether vested or unvested, was terminated and cancelled as of immediately prior to the Initial Effective Time and converted into the right to receive the Merger Consideration, net of any taxes withheld, with respect to the number of Nexeo Common Shares subject to such Company Restricted Stock Award immediately prior to the Initial Effective Time.
Each outstanding performance share unit that was granted under Nexeo’s stock plan (each, a “Company Performance Share Unit Award”) that was outstanding or payable as of immediately prior to the Initial Effective Time, whether vested or unvested, was terminated and cancelled as of immediately prior to the Initial Effective Time and converted into the right to receive the Merger Consideration, net of any taxes withheld, with respect to the number of Shares subject to such Company Performance Share Unit Award determined based on actual performance through the latest practicable date prior to the Closing Date.
Each outstanding award of share-settled restricted share units (each, a “Company RSU Award”) that was outstanding or payable as of immediately prior to the Initial Effective Time, whether vested or unvested, was terminated and cancelled as of immediately prior to the Initial Effective Time and converted into the right to receive the Merger Consideration, net of any taxes withheld, with respect to the number of Shares subject to such Company RSU Award immediately prior to the Initial Effective Time.
Each outstanding award of cash-settled restricted share units (each, a “Company Cash RSU Award”) that was outstanding or payable as of immediately prior to the Initial Effective Time, whether vested or unvested, was terminated and cancelled as of immediately prior to the Initial Effective Time and converted into the right to receive an amount in cash equal to the Per Share Cash Equivalent Consideration, net of any taxes withheld, with respect to each Share subject to such Company Cash RSU Award immediately prior to the Initial Effective Time.
The foregoing description of the Mergers and the Merger Agreement is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached as Exhibit 2.1 to Univar’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on September 18, 2018, and incorporated herein by reference.
A copy of the press release announcing the completion of the acquisition is attached hereto as Exhibit 99.1 and incorporated herein by reference.
| Item 3.01 | Notice of Delisting or Failure to Satisfy a Continuing Listing Rule or Standard. |
As a result of the transactions described in Item 2.01 of this Current Report on Form 8-K, which are incorporated by reference herein, Nexeo requested that (i) the Nexeo Common Shares, which traded under the symbol “NXEO,” (ii) the Nexeo Warrants, which traded under the symbol “NXEOW,” (iii) and the Nexeo Units, which traded under the symbol “NXEOU,” cease to be traded on the Nasdaq Global Exchange (“Nasdaq”) as of prior to the opening of the market on March 1, 2019 and be delisted from Nasdaq. Accordingly, Nasdaq is expected to file with the SEC Form 25 Notifications of Removal from Listing and/or Registration under Section 12(b) (the “Form 25s”) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to delist and deregister under Section 12(b) of the Exchange Act the Nexeo Common Shares, the Nexeo Warrants and the Nexeo Units. The delisting of the Nexeo Common Shares, the Nexeo Warrants and the Nexeo Units from Nasdaq is expected to be effective 10 days after the filing of the Form 25s. The Surviving Company intends to file with the SEC Form 15s under the Exchange Act relating to the Nexeo Common Shares, the Nexeo Warrants and the Nexeo Units.
| Item 3.03 | Material Modification to rights of Security Holders. |
As a result of the Initial Merger, each issued and outstanding Nexeo Common Share, other than dissenting shares, was cancelled and each holder of Nexeo Common Shares ceased to have any rights as a stockholder of Nexeo other than the right to receive the Merger Consideration as set forth in the Merger Agreement.
Additionally, as a result of the Initial Merger, the holders of the Nexeo Warrants will have the right to purchase from the Surviving Company the Alternative Issuance (as defined in the Warrant Agreement filed as Exhibit 4.1 to Nexeo’s Current Report on Form 8-K filed on June 16, 2014) upon the basis and upon the terms and conditions specified in the Nexeo Warrants and such agreement.
Finally, as a result of the Initial Merger, each Nexeo Unit was separated into (i) one Nexeo Common Share, which was cancelled and each holder of such Nexeo Common Share ceased to have any rights as a stockholder of Nexeo other than the right to receive the Merger Consideration as set forth in the Merger Agreement and (ii) and one Nexeo Warrant, which entitles the holder of such Nexeo Warrant the right to purchase from the Surviving Company the Alternative Issuance upon the basis and upon the terms and conditions specified in the Nexeo Warrants and the Warrant Agreement.
The information set forth in Item 2.01, Item 3.01 and Item 5.01 of this Current Report on Form 8-K is incorporated by reference herein.
| Item 5.01 | Change in Control of Registrant. |
Pursuant to the terms of the Merger Agreement, at the effective time of the Initial Merger, Nexeo became a wholly owned subsidiary of Univar and, accordingly, a change in control of Nexeo occurred.
The information set forth in Item 2.01, Item 3.01, Item 3.03 and Item 5.03 of this Current Report on Form 8-K is incorporated by reference herein.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
At the effective time of the Subsequent Merger, all of the previous officers and directors of Nexeo ceased to serve as the officers and directors of Nexeo.
In connection with closing the Mergers, the following individuals were appointed to the following positions with the Surviving Company:
- Mark Fisher, President
- Lynn J. Burgener, Vice President
- Jeffrey W. Carr, Secretary
- Kerri A. Howard, Treasurer
The information set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference herein.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Pursuant to the terms of the Merger Agreement, at the effective time of the Subsequent Merger, the certificate of formation and the operating agreement of Merger Sub II, attached as Exhibit 3.1 and Exhibit 3.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference, became the certificate of formation and operating agreement of the Surviving Company, which retains the name Pilates Merger Sub II LLC.
| Item 7.01 | Regulation FD Disclosure. |
On March 1, 2019, Univar issued a press release announcing the consummation of the Mergers. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. Such press release shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. The information in this Item 7.01, including Exhibit 99.1, shall not be deemed incorporated by reference in any filing of Nexeo under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: March 1, 2019 | PILATES MERGER SUB II LLC (as Successor in interest to Nexeo Solutions, Inc.) | |||||
| By: | /s/ Jeffrey W. Carr | |||||
| Name: Jeffrey W. Carr | ||||||
| Title: Secretary | ||||||
Exhibit 3.1
CERTIFICATE OF FORMATION
OF
PILATES MERGER SUB II LLC
This Certificate of Formation of Pilates Merger Sub II LLC (the “Company”), dated as of September 10, 2018, is being duly executed and filed by Justin C. Nowell, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 Del. C. § 18-101, et seq.).
FIRST: The name of the limited liability company formed hereby is Pilates Merger Sub II LLC.
SECOND: The address of the registered office of the Company in the State of Delaware is c/o The Corporation Trust Company, 1209 Orange Street, City of Wilmington, County of New Castle, 19801.
THIRD: The name and address of the registered agent for service of process on the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, City of Wilmington, County of New Castle, 19801.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation as of the date first above written.
| /s/ Justin C. Nowell |
||
| Justin C. Nowell | ||
| Authorized Person |
Exhibit 3.2
LIMITED LIABILITY COMPANY AGREEMENT
OF
PILATES MERGER SUB II LLC
Dated as of September 10, 2018
This Limited Liability Company Agreement (this “Agreement”) of Pilates Merger Sub II LLC is entered into by Univar Inc. (the “Member”).
The Member hereby forms a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. § 18-101, et seq.), as amended from time to time (the “Act”), to be treated as an entity that is disregarded as separate from its owner for U.S. federal income tax purposes, and hereby agrees as follows:
| 1. | Name. The name of the limited liability company formed hereby is Pilates Merger Sub II LLC (the “Company”). The Company may do business under that name and, as permitted by applicable law, under any other name determined from time to time by the Member. |
| 2. | Purpose. The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act and engaging in any and all activities necessary or incidental to the foregoing. |
| 3. | Term. The term of the Company commenced on the date the certificate of formation of the Company was filed in the office of the Secretary of State of the State of Delaware and shall continue until the Company is dissolved pursuant to the provisions of Section 8 of this Agreement. All actions of the signatory of the certificate of formation taken or incurred on behalf of the Company on or prior to the date hereof are hereby adopted and approved. |
| 4. | Registered Office. The address of the registered office of the Company in the State of Delaware is c/o The Corporation Trust Company, 1209 Orange Street, City of Wilmington, County of New Castle 19801. The Company may also have offices at such other places within or without the State of Delaware as the Member may from time to time designate or the business of the Company may require. |
| 5. | Registered Agent. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware are The Corporation Trust Company, 1209 Orange Street, City of Wilmington, County of New Castle 19801. |
| 6. | Member. The name and the mailing address of the Member are as follows: |
| Name |
Address | |
| Univar Inc. | 3075 Highland Parkway, Suite 200 | |
| Downers Grove, Illinois 60515 |
The Member has contributed $100.00 to the Company in respect of 100% of the interests of the Company.
| 7. | Management of the Company. (a) The Member shall be the “Manager” as defined in the Act. The property, business and affairs of the Company shall be managed and conducted by the Member. The Company may only act and bind itself through the consent of the Member, or through the actions of the agents, officers or employees of the Company (as described in paragraph (b) below) if and to the extent authorized by this Agreement or by the consent of the Member in accordance with the provisions of this Agreement. The Member shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by a member under the laws of the State of Delaware. |
(b) The Member may (i) authorize by written action any person to enter into and perform any agreement on behalf of the Company, (ii) appoint one or more officers with such titles and duties and powers as the Member may determine and (iii) appoint individuals, with such titles as it may select, as employees or officers of the Company to act on behalf of the Company, with such power and authority as the Member may delegate from time to time to any such person. Any such persons, officers and employees designated by the Member to act on behalf of the Company may be appointed or removed by the Member at any time and from time to time, with or without cause.
(c) Any person or entity dealing with the Company, the Member or any of the persons described in paragraph (b) above (collectively, the “Authorized Persons”) may rely upon a certificate signed by the Member (or the Secretary of the Company), as to the identity of the Member or an Authorized Person and as to the authority of the Member or such Authorized Person to execute and deliver any instrument or document on behalf of the Company. As used herein, “person” means any individual, corporation, partnership, limited liability company, trust, unincorporated organization, association or other entity.
(d) Each of Carl J. Lukach, Jeffrey W. Carr and Kim Dickens (or such other person or persons as may from time to time be designated by the Member for such purpose) is hereby designated as an Authorized Person, within the meaning of the Act, to execute, deliver and cause to be filed any certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.
| 8. | Dissolution; Liquidation. (a) The Company shall dissolve, and its affairs shall be wound up upon the first to occur of the following: (i) the written consent of the Member or (ii) any other event or circumstance giving rise to the dissolution of the Company under the Act, unless the Company’s existence is continued pursuant to the Act. |
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(b) Upon dissolution of the Company, the Company shall immediately commence to wind up its affairs and the Member shall promptly liquidate the business of the Company. During the period of the winding up of the affairs of the Company, the rights and obligations of the Member under this Agreement shall continue.
(c) In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied as follows: (i) first, to creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof); and (ii) thereafter, to the Member.
(d) Upon the completion of the winding up of the Company, the Member shall file a certificate of dissolution in accordance with the Act.
| 9. | Capital Contributions. The Member shall have the right, but not the obligation, to make capital contributions to the Company at the times and in the amounts determined by the Member. |
| 10. | Allocation of Profits and Losses. The Company’s profits and losses shall be allocated at the end of each calendar year (and at such other times, if any, as the Member shall determine) to the Member. |
| 11. | Distributions. Distributions may be made to the Member at the times and in the aggregate amounts determined by the Member. Notwithstanding anything to the contrary contained herein, the Company, and the Member on behalf of the Company, shall not make a distribution to the Member on account of the interest of the Member in the Company if such distribution would violate § 18-607 of the Act or any other applicable law. |
| 12. | Fiscal Year. The fiscal year of the Company shall end on December 31st of each year. |
| 13. | Assignments. A Member shall be permitted to transfer all or any portion of its interest in the Company to any person or entity. |
| 14. | Resignation. A Member may only resign from the Company if it has transferred all of its interest in the Company to another person or entity. |
| 15. | Admission of Additional Members. One or more additional members of the Company may be admitted to the Company with the consent of the Member upon such additional member(s)’s execution of a counterpart signature page to this Agreement. Upon the admission to the Company of any additional member(s), the Member shall cause this Agreement to be amended and restated to reflect the admission of such additional member(s) and the initial capital contribution, if any, of such additional member(s), and to include such other provisions as the members may agree to reflect the change of status of the Company upon the admission of such additional member(s). |
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| 16. | Liability of the Member. Except as provided in this Agreement or in the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company and no Member, Manager, director or officer shall be obligated personally for any such debts, obligations or liabilities solely by reason of being a Member, or acting as a Manager or director or officer, of the Company. Except as otherwise provided in this Agreement, a Member’s liability (in its capacity as such) for Company obligations, liabilities and losses shall be limited to the Company’s assets; provided that the Member shall be required to return to the Company any distribution made to it in clear and manifest accounting or similar error. The immediately preceding sentence shall constitute a compromise to which all Members have consented within the meaning of the Act. Notwithstanding anything contained herein to the contrary, the failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business and affairs under this Agreement or the Act shall not be grounds for imposing personal liability on the Members for liabilities of the Company. As used herein, “Affiliates” of any person means any person that directly or indirectly controls, is controlled by, or is under common control with the person in question. |
| 17. | Liability of Manager, Director or Officer. (a) Except as otherwise provided herein or in an agreement entered into by such person and the Company, none of the Manager, director, officer or their respective Affiliates shall be liable to the Company or to any Member for any act or omission performed or omitted by such Manager, director or officer in their capacity as a Manager, director or officer, respectively, pursuant to the authority granted to such person by this Agreement; provided that, except as otherwise provided herein, such limitation of liability shall not apply to the extent the act or omission was attributable to such person’s gross negligence, willful misconduct or knowing violation of law or for any present or future breaches of any representations, warranties or covenants by such person or its Affiliates contained herein or in the other agreements with the Company. Each Manager, director or officer may exercise any of the powers granted to such position by this Agreement and perform any of the duties imposed upon such position hereunder either directly or by or through their respective agents, and none of the Manager, director or officer, or any of their respective Affiliates shall be responsible for any misconduct or negligence on the part of any such agent appointed by such Manager, director or officer (in each case, so long as such agent was selected in good faith and with reasonable care). Each Manager, director or officer shall be entitled to rely upon the advice of legal counsel, independent public accountants and other experts, including financial advisors, and any act of or failure to act by a Manager, director or officer in good faith reliance on such advice shall in no event subject such Manager (or director or officer thereof), director or officer to liability to the Company or any Member. |
(b) Whenever this Agreement or any other agreement contemplated herein provides that a Manager, director or officer, in each case, shall act in a manner which is, or provide terms which are, “fair and reasonable” to the Company or any Member, such
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Manager, director or officer shall, in each case, determine such appropriate action or provide such terms considering the relative interests of each party to such agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable United States generally accepted accounting practices or principles.
(c) Whenever in this Agreement or any other agreement contemplated herein a Manager, director or officer, in each case, is permitted or required to take any action or to make a decision in its “sole discretion” or “discretion,” with “complete discretion” or under a grant of similar authority or latitude such person shall be entitled to consider such interests and factors as it desires, provided that such person shall act in good faith.
(d) Whenever in this Agreement a Manager, director, or officer, in each case, is permitted or required to take any action or to make a decision in its “good faith” or under another express standard, such Manager, director or officer shall, in each case, act under such express standard and, to the extent permitted by applicable law, shall not be subject to any other or different standards imposed by this Agreement or any other agreement contemplated herein, and, notwithstanding anything contained herein to the contrary, so long as such Manager, director or officer so acts in good faith, the resolution, action or terms so made, taken or provided by such Manager, director, officer shall not constitute a breach of this Agreement or any other agreement contemplated herein or impose liability upon such Manager (or any Manager, director or officer thereof), director, officer or any of their respective Affiliates.
| 18. | Fiduciary Duty. Each Manager, director and officer of the Company shall, to the fullest extent permitted by the Act, have no duties of any kind or nature (at law, in equity, under this Agreement or otherwise, including any fiduciary duties or any similar duties) to the Company, to any Member, to any Affiliate of any Member, to any creditor of the Company or any of its subsidiaries or to any other person; provided that the implied contractual covenant of good faith and fair dealing shall be applicable only to the limited extent as required by the Act. The provisions of this Agreement, to the extent that they restrict the duties (including fiduciary duties) and liabilities of the Manager, director or officer of the Company otherwise existing at law or in equity or by operation of the preceding sentence, are agreed by the Member to replace such duties and liabilities of such Manager, director or officer of the Company. |
| 19. | Indemnification and Insurance. (a) The Company hereby agrees to indemnify and hold harmless any person (each an “Indemnified Person”) to the fullest extent permitted under the Act, as the same now exists or may hereafter be amended, substituted or replaced (but, in the case of any such amendment, substitution or replacement only to the extent that such amendment, substitution or replacement permits the Company to provide broader indemnification rights than the Company is providing immediately prior to such amendment, substitution or replacement), against all expenses, liabilities and losses (including attorneys’ fees, judgments, fines, excise taxes or penalties) reasonably incurred or suffered by such person (or one or more of such person’s Affiliates) by reason of the fact that such person is or was a Member or is or was serving as a Manager, director, officer, employee or other agent of the Company or is or was serving at the |
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| request of the Company as a manager, officer, director, principal, member, employee or agent of another corporation, partnership, joint venture, limited liability company, trust or other enterprise; provided that (unless a Manager otherwise consents) no Indemnified Person shall be indemnified for any expenses, liabilities and losses suffered that are attributable to such Indemnified Person’s or its Affiliates’ gross negligence, willful misconduct or knowing violation of law. Expenses, including attorneys’ fees, incurred by any such Indemnified person in defending a proceeding related to any such indemnifiable matter shall be paid by the Company in advance of the final disposition of such proceeding, including any appeal therefrom, upon receipt of an undertaking by or on behalf of such Indemnified Person to repay such amounts if it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified by the Company. |
(b) The right to indemnification and the advancement of expenses conferred in this Section 19 shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, agreement, by-law, vote of Managers or otherwise.
(c) The Company will be permitted to maintain directors’ and officers’ liability insurance, at its expense, for the benefit of the Managers and officers of the Company and of any other persons to whom the Manager has delegated its authority pursuant to Section 7.
(d) Notwithstanding anything contained herein to the contrary (including in this Section 19), any indemnity by the Company relating to the matters covered in this Section 19 shall be provided out of and to the extent of Company assets only and no Member (unless such Member otherwise agrees in writing or is found in a final decision by a court of competent jurisdiction to have personal liability on account thereof) shall have personal liability on account thereof or shall be required to make additional capital contributions or otherwise provide funding to help satisfy such indemnity of the Company.
(e) If this Section 19 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnified Person pursuant to this Section 19 to the fullest extent permitted by any applicable portion of this Section 19 that shall not have been invalidated and to the fullest extent permitted by applicable law.
| 20. | Amendment, Waiver, Etc. This Agreement may not be amended or supplemented, and no waiver of or consent to departures from the provisions hereof shall be effective, unless set forth in a writing signed by the Member. |
| 21. | Miscellaneous. This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto. This Agreement shall be binding upon and inure to the benefit of the Member and its successors and permitted assigns. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid |
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| or unenforceable provision was omitted. Except as provided in Sections 16 through 19, nothing in this Agreement shall confer any rights upon any person or entity other than the Member and its successors and permitted assigns. The provisions of this Agreement are intended only for the regulation of relations between the Member and former or prospective members and the Company. This Agreement is not intended for the benefit of non-Member creditors and no rights are granted to non-Member creditors under this Agreement. |
| 22. | Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES), ALL RIGHTS AND REMEDIES BEING GOVERNED BY SUCH LAWS. |
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IN WITNESS WHEREOF, the undersigned Member of the Company, intending to be legally bound hereby, have duly executed this Agreement as of the date first above written.
| By: | /s/ Jeffrey W. Carr | |
| Name: | Jeffrey W. Carr | |
| Title: | SVP, General Counsel and Secretary |
[Signature Page to Pilates Merger Sub II LLC Operating Agreement]
Exhibit 99.1
PRESS RELEASE
| FOR ADDITIONAL INFORMATION:
Univar Solutions Investor Relations David Lim +1 844-632-1060 IR@univar.com
Univar Solutions Media Relations Dwayne Roark +1 331-777-6031 mediarelations@univar.com |
Univar Completes Acquisition of Nexeo Solutions, Creating Univar Solutions
Combined Company Positioned to Drive Growth and Shareholder Value with Expanded Capabilities and Unmatched Expertise to Help Customers and Suppliers Capitalize on Growth Opportunities
DOWNERS GROVE, ILL. — March 1, 2019 — Univar Inc. (NYSE: UNVR) (“Univar”), today announced that it has completed the acquisition of Nexeo Solutions (“Nexeo”), creating a leading global chemical and ingredients solutions provider. The combined company will conduct business as Univar Solutions, reflecting a commitment to combining the ‘best of the best’ from each legacy organization.
“Univar Solutions is uniquely positioned to drive growth and deliver significant value for shareholders, customers, suppliers and employees,” said David Jukes, Univar Solutions president and chief executive officer. “Together, we have the ability to redefine chemical and ingredients distribution, to deliver superior growth for our partners, people and shareholders.”
New company, new corporate brand
Univar Solutions combines the scale, broad product portfolio, technical expertise, relationship know-how and specialized services of Univar with the extensive product knowledge, market expertise and scalable technology platform of Nexeo Solutions.
“Today is the beginning of an exciting journey, bringing together two great companies to create Univar Solutions, a company with the vision to redefine distribution and be the most valued chemical and ingredient distributor on the planet. Our new brand name reflects our commitment to combine the best qualities of each legacy company to create an innovative industry leader,” said Jukes. “Together, we will be a committed ally for our wide range of customers and suppliers, with the broad array of capabilities and deep know-how to help their businesses run smoothly, and the expertise to help them anticipate, navigate and leverage meaningful growth opportunities.”
Univar Solutions will provide customers with easy access to a broad selection of products from leading suppliers. Through a growing portfolio of value-added services, Univar Solutions will go beyond distribution to help accelerate innovation and efficiency in operations. Backed by industry-leading digital tools and a global network of 17 ‘Solution Centres’, the Company will help create novel formulations and recipes that distinguish brands in the marketplace.
In addition to announcing the name under which the Company will operate going forward, Univar today unveiled the Univar Solutions brand identity and logo, which can be accessed at www.univarsolutions.com.
Jukes added, “Our new logo represents a commitment to constructive partnerships and collaborations with our customers and suppliers. It also reflects an updated mission of streamlining, innovating and growing through values that will govern our new company: serious about safety, where people matter, we’re valuable to others, where we do what we say, and together we win.”
Closing terms
On February 28, 2019 at 11:58 p.m. Eastern Time, Nexeo became a wholly owned subsidiary of Univar and ceased to be traded on the NASDAQ. Pursuant to the terms of the merger agreement, each issued and outstanding share of Nexeo common stock has been converted into the right to receive merger consideration consisting of 0.305 shares of Univar common stock (with cash in lieu of any fractional shares) and $3.02 in cash. The stock consideration payable to former holders of Nexeo common stock and related stock awards consists, in the aggregate, of approximately 28 million shares of Univar common stock, or approximately 16% of Univar’s issued and outstanding common stock following the completion of the transaction.
In connection with the closing, Univar borrowed revolving loans under an amended and restated revolving facility and borrowed incremental term loans under its existing term loan credit facility to refinance Nexeo’s debt, fund other obligations, and finance the cash portion of the merger consideration. Additional details can be found in a current report on Form 8-K filed by Univar this morning with the U.S. Securities and Exchange Commission.
Nexeo Plastics
An agreement was previously announced for Nexeo Solutions to divest its plastics distribution business (“Nexeo Plastics”) to an affiliate of One Rock Capital Partners, LLC (“One Rock”) in a transaction valued at approximately $640 million, subject to customary closing adjustments. The transaction is expected to close in the first half of 2019 with net proceeds being used to immediately pay down debt. The transaction remains subject to the satisfaction of customary closing conditions.
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About Univar Solutions
Univar Solutions (NYSE: UNVR) is a leading global chemical and ingredient distributor and provider of value added services to customers across a wide range of industries. With the industry’s largest private transportation fleet and North American sales force, a vast supplier network, deep market and regulatory knowledge, world-class formulation and recipe development, unparalleled logistics know-how, and industry-leading digital tools, Univar Solutions is a committed ally to customers and suppliers, helping them anticipate, navigate, and leverage meaningful growth opportunities. Learn more at www.univarsolutions.com.
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 codified in Section 27A of the Securities Act, and Section 21E of the Exchange Act, as amended. Some forward-looking statements may be identified, without limitation, by the use of forward-looking terminology such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “may,” “will,” “could,” “would” and similar expressions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this communication and include statements regarding, among other things, the expected timetable for closing of the proposed transaction between Univar Inc. (“Univar”) and Nexeo Solutions, Inc. (“Nexeo”), the expected benefits and synergies of the proposed transaction and the operating results, performance and capital structure of the combined company.
Forward-looking statements are based on Univar’s current expectations and beliefs concerning future developments and their potential effect on the combined company. While Univar believes that forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the combined company will be those anticipated. A number of important factors, risks and uncertainties could cause actual results to differ materially from those contained in or implied by the forward-looking statements, many of which are beyond Univar’s control. Factors, risks and uncertainties that could cause actual results to differ from those reflected in forward-looking statements include: changes in general economic, business and political conditions, including changes in the financial markets; higher than expected or unexpected costs associated with or relating to the transaction; the risk that expected benefits, synergies and growth prospects of the transaction and combined company may not be achieved in a timely manner or at all; the outcome and impact of the announced divestiture of Nexeo’s plastics distribution business; the ability to successfully integrate Nexeo’s business with Univar following the closing; the risk that Univar will be unable to retain and hire key personnel; the risk that disruption from the transaction may adversely affect Univar’s business and relationships with customers, suppliers, distributors or employees; and other risks detailed in the risk factors discussed in “Item 1.A. Risk Factors” in Univar’s most recent Annual Report on Form 10-K. Unless otherwise indicated or the context otherwise requires, comments concerning our expectations for future revenues and
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operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions, divestitures or other potential strategic transactions. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Univar does not undertake any obligation to update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
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