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): April 18, 2011
STERICYCLE, INC.
(Exact name of registrant as specified in its charter)
Delaware
0-21229
36-3640402
(State or other juris-
(Commission file
(IRS employer
diction of incorporation)
number)
identification number)
28161 North Keith Drive
Lake Forest, Illinois 60045
(Address of principal executive offices)
Registrant’s telephone number, including area code:
(847) 367-5910
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligations 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))
Item 2.01
Completion of Acquisition or Disposition of Assets
On April 18, 2011, we completed our acquisition of Healthcare Waste Solutions, Inc., a Delaware corporation (“HWS”), pursuant to the agreement and plan of merger, dated as of September 24, 2010, as amended, that we and our acquisition subsidiary entered into with HWS and Joseph Mayernik as shareholder representative. Pursuant to the merger agreement and upon completion of the merger, our acquisition subsidiary was merged with and into HWS and HWS became a wholly-owned subsidiary of ours. Completion of the merger followed our agreement with the U.S. Department of Justice and the State of New York providing for clearance of the transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The total merger consideration was $237,000,000 in cash, subject to the various adjustments provided for in the merger agreement, including a reduction for HWS’s indebtedness as of the closing date. In addition, $10,000,000 of the merger consideration was deposited into escrow to cover indemnification obligations of the HWS shareholders and in-the-money option holders under the merger agreement.
There was no material relationship between us or any of our officers, directors or affiliates and any shareholder of HWS.
Item 9.01
Financial Statements and Exhibits
(d)
Exhibits
The following exhibits are filed with this report:
2.1
Agreement and Plan of Merger, dated as of September 24, 2010, by and among Stericycle, Inc., a Delaware corporation, SAMW Acquisition Corp., a Delaware corporation, Healthcare Waste Solutions, Inc., a Delaware corporation, and Joseph Mayernik as shareholder representative (incorporated by reference to Exhibit 2.1 to our quarterly report on Form 10-Q for the quarter ended September 30, 2010)
2.2
Amendment No. 1 to Agreement and Plan of Merger, dated as of April 15, 2011, by and among Stericycle, Inc., SAMW Acquisition Corp., Healthcare Waste Solutions, Inc. and Joseph Mayernik as shareholder representative
99.1
Press release issued by Stericycle on April 18, 2011
2
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: April 20, 2011.
Stericycle, Inc.
By
/s/ FRANK J.M. TEN BRINK
Frank J.M. ten Brink
Executive Vice President and
Chief Financial Officer
3
Exhibit 2.2
EXECUTION COPY
Amendment No. 1 to Merger Agreement
THIS AMENDMENT NO. 1 TO MERGER AGREEMENT (this “Amendment”) is dated effective as of April 15, 2011, by and among Stericycle, Inc., a Delaware corporation (“Buyer”), SAMW Acquisition Corp., a Delaware corporation (“Transitory Subsidiary”), Healthcare Waste Services, Inc., a Delaware corporation (“Target”), and solely in his capacity as representative for the Stockholders and In the Money Optionholders (defined below) pursuant to this Agreement, Joseph Mayernik (“Shareholders Representative”). Each of Buyer, Transitory Subsidiary, Target and Shareholders Representative is referred to herein individually, as a “Party” and collectively, as the “Parties”.
WHEREAS, the Parties entered into an Agreement and Plan of Merger, dated as of September 24, 2010 (the "Merger Agreement"), whereby the Transitory Subsidiary will be merged with and into the Target in a transaction whereby the Target will become a wholly owned subsidiary of the Buyer;
WHEREAS, Parties desire to amend the Merger Agreement in certain respects as more specifically set forth below; and
WHEREAS, capitalized terms not defined herein shall have the meanings given to them in the Merger Agreement.
NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereto hereby agree as follows:
1.
Amendment. Any reference to the “Merger Agreement” in the Merger Agreement (including any documents referred to therein and herein) shall refer to the Merger Agreement as amended by this Amendment.
2.
Merger Consideration. The parties hereby amend the definition of “Merger Consideration” in §1 of the Merger Agreement to read in its entirety as follows:
“Merger Consideration” means $237,000,000”
3.
Subsidiary. The parties hereby amend the definition of “Subsidiary” in §1 of the Merger Agreement to strike the last sentence and replace it with a sentence to read as follows:
“For purposes of Target’s representations and warranties in §3, the term “Subsidiary” shall include Health Care Waste Services Corp. as of the Closing Date.”
4.
Closing Tax Benefit. The parties hereby amend the definition of “Closing Tax Benefit” in §1 of the Merger Agreement to read in its entirety as follows:
“Closing Tax Benefit” means (i) forty (40%) of the sum of the total payments hereunder to holders of In the Money Options, less (ii) $120,000.”
5.
Capital Lease Representation. Target represents that the aggregate amount of its capitalized leases does not exceed $900,000 as of the Closing Date.
6.
Capitalization and Indebtedness Representations. Target represents that as of the Closing Date (i) the certified stockholder list delivered to Buyer at Closing is true and accurate and (ii) that the Closing Merger Consideration Payment Schedule delivered by Target to Buyer prior to the Closing includes a true and accurate list of all Target Indebtedness.
7.
In the Money Options. The parties hereby amend §2(c)(iv)(H) of the Merger Agreement to read in its entirety as follows:
“Buyer will cause the Surviving Corporation to deliver (i) that portion of the Closing Merger Consideration due to In the Money Optionholders, pursuant to the Closing Merger Consideration Payment Schedule, to the Surviving Corporation’s payroll vendor for distribution to In the Money Optionholders and (ii) that portion of the Closing Merger Consideration due to the Stockholders to the Paying Agent in the manner provided below in §2(e).”
8.
Additional Consideration. The Shareholder Representative, upon receiving any Additional Consideration (as defined in the Paying Agent Agreement), shall allocate such amount between the In the Money Optionholders and the Stockholders pro rata according to the number of shares held of record at Closing or the number of underlying shares which would have been issued upon exercise of options, as the case may be, and then shall deliver, or cause to be delivered, (i) that portion of any such Additional Consideration, including without limitation any Escrow Funds distribution and Change of Control Payments pursuant to §5(j) of the Merger Agreement, due to In the Money Optionholders to the Surviving Corporation for further distribution by its payroll vendor to In the Money Optionholders and (ii) that portion of any Additional Consideration due to the Stockholders to the Paying Agent for distribution to the Stockholders.
9.
Net Merger Consideration. The parties hereby amend §2(c)(iv)(E) of the Merger Agreement to read in its entirety as follows:
“Buyer will pay the following amounts: (i) $800,000 shall be paid to Rehrig Pacific Company, Inc., a Delaware corporation, the LLC Dissolution Payments; (ii) $2,000,000 shall be paid to MNC Holdings, LLC, a Delaware limited liability company, pursuant to a transaction described in §5(n)(ii); and (iii) $300,000 shall be paid to HWS Shareholder Representative, LLC, a Delaware limited liability company, for a Shareholder Representative expense reserve fund.”
10.
Paying Agent and Payroll Vendor. The parties hereby amend §2(e)(ii)(A) of the Merger Agreement to read in its entirety as follows:
Buyer will first allocate the Closing Merger Consideration between the In the Money Optionholders and the Stockholders pursuant to a Closing Merger Consideration Payment Schedule delivered by Target to Buyer prior to the Closing and shall then furnish to (i) the Surviving Corporation for further distribution by its payroll vendor that portion of the Closing Merger Consideration due to the In the Money Optionholders, and (ii) Mellon Investor Services LLC (operating with the service name BNY Mellon Shareowner Services), a New Jersey limited liability company (the “Paying Agent”) that portion of the Closing Merger Consideration due to the Stockholders.
11.
Limitation on Buyer Indemnification Claims. The parties hereby amend §8(f)(i) of the Merger Agreement to read in its entirety as follows:
“except for any claim relating to: (A) a failure to comply with the requirements of the New York Business Integrity Commission or (B) the payments made pursuant to §2(c)(iv)(E)(ii) and (iii) for which no threshold shall apply, no claim shall be made with respect to any Loss (or series of related or similar Losses) unless and until the aggregate amount of all such Losses exceeds $1,000,000, and then only to the extent of such excess;
12.
Ratification. Except as expressly amended by this Amendment, the Merger Agreement and the schedules and exhibits thereto shall remain in full force and effect. None of the rights, interests and obligations existing and to exist under the Merger Agreement are hereby released, diminished or impaired, and the parties hereby reaffirm all covenants, representations and warranties in the Merger Agreement.
13.
Execution in Counterparts. For the convenience of the Parties, this Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
14.
Governing Law. This Amendment shall be governed by and construed in accordance with the terms of the Merger Agreement.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, Parties have executed this Amendment effective as of the date written above.
Buyer:
Stericycle, Inc.
a Delaware corporation
By:
/s/ Frank J.M. ten Brink
Name:
Frank ten Brink
Title:
Executive Vice President and
Chief Financial Officer
Acquisition Sub:
SAMW Acquisition Corp.
a Delaware corporation
By:
/s/ Frank J.M. ten Brink
Name:
Frank ten Brink
Title:
Vice President
The Company:
Healthcare Waste Solutions, Inc.
a Delaware corporation
By:
/s/ Joseph Mayernik
Name:
Joseph Mayernik
Title:
President
Shareholder Representative:
By:
/s/ Joseph Mayernik
Joseph Mayernik
Exhibit 99.1
FOR IMMEDIATE RELEASE
For further information contact:
Frank J.M. ten Brink at (847) 607-2012
STERICYCLE, INC. COMPLETES ACQUISITION OF
HEALTHCARE WASTE SOLUTIONS, INC.
Lake Forest, Illinois, April 18, 2011—Stericycle, Inc. (NASDAQ:SRCL) announced today that it had completed its pending acquisition of Healthcare Waste Solutions, Inc. (“HWS”) following an agreement with the U.S. Department of Justice and the State of New York providing clearance for the transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
We acquired HWS, a portfolio company of Altaris Capital Partners, LLC, by a cash merger in which HWS became a wholly-owned subsidiary of ours. HWS will add approximately $45 million in annualized revenues. We anticipate that it will take the remainder of 2011 to fully integrate the HWS acquisition. We anticipate that the fully integrated acquisition will be accretive in 2012 by approximately $0.04 per share prior to any transaction and transition expenses.
Prior to closing, we and HWS agreed to reduce the total merger consideration payable by us in cash from $245.0 million to $237.0 million, subject to the various adjustments, including a reduction for HWS’s indebtedness as of the closing date, provided for in the merger agreement.
Safe Harbor Statement: Statements in this press release may contain forward-looking statements that involve risks and uncertainties, some of which are beyond our control (for example, general economic conditions). Our actual results could differ significantly from the results described in the forward-looking statements. Factors that could cause such differences include changes in governmental regulation of medical waste collection and treatment and increases in transportation and other operating costs, as well as the other factors described in our filings with the U.S. Securities and Exchange Commission. As a result, past financial performance should not be considered a reliable indicator of future performance, and investors should not use historical trends to anticipate future results or trends. We make no commitment to disclose any subsequent revisions to forward-looking statements.