ITEM 1.01
Entry Into A Material Definitive Agreement
.
On August 18, 2016, Pentair plc (Pentair) entered into a Share Purchase Agreement (the Purchase Agreement) with Emerson Electric
Co. (Emerson), pursuant to which Pentair agreed to sell its Valves & Controls business (the Business) to Emerson (the Transaction).
Pursuant to the Purchase Agreement and subject to the terms and conditions set forth therein, Pentair will sell the Business to Emerson for an aggregate
purchase price of $3.15 billion in cash, subject to certain customary adjustments.
The closing of the Transaction is subject to the satisfaction of
certain conditions, including, among others: (1) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and certain other competition laws (the Competition
Laws) and (2) the accuracy of representations and warranties of, and performance of covenants by, the other party (in each case, subject to certain qualifications, if applicable). Subject to the satisfaction or waiver of the conditions
set forth in the Purchase Agreement, Pentair expects the Transaction to close late in 2016 or early in 2017.
The Purchase Agreement contains customary
representations, warranties and covenants of Pentair and Emerson, including, among other things, covenants (1) with respect to the conduct of the Business during the period between the execution of the Purchase Agreement and consummation of the
Transaction, and (2) regarding using reasonable best efforts to obtain governmental and regulatory approvals and to take the actions necessary to consummate the Transaction. The Purchase Agreement also contains certain indemnification
rights with respect to, among other things, breaches of representations, warranties or covenants by either party.
The Purchase Agreement contains certain
customary termination rights for both Pentair and Emerson, including in the event that (1) the Transaction has not been consummated on or prior to February 18, 2017 (subject to extension in certain circumstances); provided, that the terminating
party may not be in material breach of the Purchase Agreement, or (2) any governmental entity that must grant permission under any Competition Law for the consummation of the transaction denies, or applies certain burdensome conditions to, any such
permission or otherwise prohibits the consummation of the Transaction. Upon termination of the Purchase Agreement under specified antitrust related circumstances, Emerson will pay to Pentair a cash reverse termination fee.
There are representations and warranties contained in the Purchase Agreement which were made by the parties to each other as of specific dates. The assertions
embodied in these representations and warranties were made solely for purposes of the Purchase Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating its terms. Moreover,
certain representations and warranties may not be accurate or complete as of any specified date because they are subject to a contractual standard of materiality that is different from certain standards generally applicable to shareholders or were
used for the purpose of allocating risk between the parties rather than establishing matters as facts. Based upon the foregoing reasons, investors should not rely on the representations and warranties as statements of factual information.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This
Current Report on Form 8-K contains statements that Pentair believes to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical
fact are forward-looking statements. Without limitation, any statements preceded or followed by or that include the words targets, plans, believes, expects, intends,
will, likely, may, anticipates, estimates, projects, should, would, positioned,
strategy, future or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks,
uncertainties, assumptions and other factors, some of which are beyond Pentairs control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the
ability to successfully complete the Transaction on anticipated terms and timetable; overall global economic and business conditions, including worldwide demand for oil and gas; the ability to achieve the benefits of Pentairs restructuring
plans; the ability to successfully identify, finance, complete and integrate acquisitions, including the ability to successfully integrate and achieve the expected benefits of the acquisition of ERICO Global Company; competition and pricing
pressures in the markets Pentair serves; the strength of housing and related markets; volatility in currency exchange rates and commodity prices; inability to generate savings from excellence in operations initiatives consisting of lean enterprise,
supply management and cash flow practices; increased risks associated with operating foreign businesses; the ability to deliver backlog and win future project work; failure of markets to accept new product introductions and enhancements; the impact
of changes in laws and regulations, including those that limit U.S. tax benefits; the outcome of litigation and governmental proceedings; and the ability to achieve Pentairs long-term strategic operating goals. Additional information
concerning these and other factors is contained in Pentairs filings with the U.S. Securities and Exchange Commission, including Pentairs 2015 Annual Report on Form 10-K. All forward-looking statements speak only as of the date of this
report. Pentair assumes no obligation, and disclaims any obligation, to update the information contained in this report.