|
Item 1.01
|
Entry into a Material Definitive Agreement.
|
On November 6, 2016, Insight
Enterprises, Inc., a Delaware corporation (“Insight”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Datalink Corporation, a Minnesota corporation (“Datalink”), and Reef Acquisition Co., a
Minnesota corporation and a wholly owned subsidiary of Insight (“Merger Sub”).
Pursuant to the Merger Agreement, and subject to
the terms and conditions thereof, Merger Sub will merge with and into Datalink, with Datalink as the surviving corporation and a wholly owned subsidiary of Insight (the “Merger”), and each share of common stock of Datalink (the
“Datalink Common Stock”), other than those shares owned by Insight and Merger Sub, and any shares seeking appraisal rights, will be converted into the right to receive $11.25 in cash (the “Merger Consideration”). The
transaction is not subject to any financing condition. Insight intends to fund the transaction through a combination of cash on hand and borrowings under its existing revolving credit facilities.
In general, as a result of the Merger, at the closing of the transaction (i) each share of restricted stock of Datalink will be cancelled in
exchange for the Merger Consideration, (ii) options to purchase Datalink Common Stock pursuant to Datalink’s stock plans that are in the money will be cashed out at closing and (iii) options that are out of the money will be cancelled for no
consideration. Each restricted stock unit (“RSU”) and performance stock unit (“PSU”) of Datalink (whether vested or unvested) will be cancelled at closing in exchange for a lump sum cash payment equal to the product of the
number of shares of Datalink Common Stock subject to such RSU or PSU and the Merger Consideration.
The obligation of Insight and Datalink
to consummate the Merger is subject to the satisfaction or waiver of closing conditions set forth in the Merger Agreement, including, among others (i) the approval of Datalink’s shareholders, (ii) the expiration or termination of any waiting
period applicable under the Hart-Scott Rodino Act and the receipt of antitrust approval in Germany, (iii) the absence of a “Company Material Adverse Effect” (as defined in the Merger Agreement) with respect to Datalink, and (iv) the
receipt of the consent of Datalink’s auditors to the inclusion of their report on Datalink’s financial statements to be included in a Form 8-K to be filed by Insight.
Each of Insight, Datalink and Merger Sub has made customary representations and warranties and covenants in the Merger Agreement, including
covenants to use their respective reasonable best efforts to effect the transaction, including securing required regulatory approvals. In addition, Datalink has agreed to other customary covenants, including, among others, covenants to conduct
its business in the ordinary course during the interim period between the execution of the Merger Agreement and the closing of the Merger, and not to solicit takeover proposals or, subject to certain exceptions, not to enter into discussions
concerning, or provide confidential information in connection with, a takeover proposal.
Page 2 of 9
Pages
The Merger Agreement contains termination rights for each of Insight and Datalink, including,
among others, if the Merger has not been consummated by April 25, 2017. Upon termination of the Merger Agreement under specified circumstances, Datalink would be required to pay Insight a termination fee of $7.5 million (the
“Termination Fee”), including upon: (i) a termination by Insight following a change in the recommendation by the board of directors of Datalink; (ii) a termination by Datalink in order to enter into an agreement with respect to a
superior proposal, subject to the satisfaction of certain conditions; or (iii) a termination by Insight or Datalink due to (x) the Merger not being consummated by April 25, 2017, (y) Datalink failing to obtain shareholder approval of the
Merger, or (z) a breach of the Merger Agreement by Datalink, so long as before the date of such termination a takeover proposal has been publicly announced (and not publicly withdrawn without qualification at least ten days prior to the date of
termination or, if terminated because of a failure to obtain the approval of Datalink’s shareholders, at least ten days prior the shareholder meeting) and within twelve months of the date of such termination Datalink has entered into a
definitive agreement for a takeover proposal that is subsequently consummated and, in the case of a termination under clause (z), so long as the circumstances underlying such termination arose after the date of such takeover proposal or the
announcement of such intention or expression of potential interest to the board of directors of Datalink with respect to any takeover proposal.
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 hereto as Exhibit 2.1 and incorporated herein by reference.
The Merger Agreement has been included to provide investors and security holders with information regarding the terms of the Merger. It is not
intended to provide any other factual information about Insight or Datalink. The representations, warranties, covenants and agreements contained in the Merger Agreement, which were made only for purposes of that agreement and as of specific
dates, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual
risk between the parties to the Merger Agreement instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and security
holders. Investors and security holders should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of Insight, Datalink, or Merger Sub or
any of their respective 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 Insight’s or Datalink’s public disclosures.
Page 3 of 9
Pages
Voting Agreement
On November 6, 2016, concurrently with the execution of the Merger Agreement, Datalink’s directors entered into a Voting Agreement
with Insight and Datalink (the “Voting Agreement”), pursuant to which, among other things and subject to the terms and conditions therein, each Datalink director agreed to (1) appear at the Datalink shareholders meeting to be counted
present thereat for purposes of calculating a quorum and (2) vote or cause to be voted, in person or by proxy, all of such director’s existing shares in favor of the approval of the Merger Agreement and against any action, agreement or
transaction that could reasonably be expected to impede, interfere with or delay the consummation of the Merger. As of November 6, 2016, the shareholder parties to the Voting Agreement own approximately 7% of the total outstanding Datalink
Common Stock.
The foregoing description of the Voting Agreement does not purport to be complete and is subject to, and qualified in its
entirety by, the full text of such agreement, a copy of which is attached hereto as Exhibit 99.1, and incorporated herein by reference.