UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
W
ashington,
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 (Dat
e of ear
liest event reported):
October
10
, 2017
_______________________
CRYOLIFE, INC.
(Exact name of registrant as specified in its charter)
_________________________
Florida
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1-13165
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59-2417093
|
(State or Other Jurisdiction
of Incorporation)
|
(Commission File Number)
|
(IRS Employer
Identification No.)
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1655 Roberts Boulevard, N.W., Kennesaw, Georgia 30144
(Address of principal executive office) (zip code)
Registrant's telephone number, including area code: (770) 419-3355
_____________________________________________________________
(Former name or former address, if changed 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 (see General Instruction A.2. below):
☐
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.
☐
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Item 1.01
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Entry into a Material Definitive Agreement
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Securities Purchase
Agreement
On
October
10
, 2017
,
CryoLife, Inc.
,
(
“CryoLife” or
the
“
Company
”)
,
entered into an agreement
to acquire
shares of JOTEC
AG (
“
JOTEC
”)
, a
Swiss
public limited corporation
,
pursuant to
a Securities Purchase Agreement
(the “Purchase Agreement”)
, by and among CryoLife,
CryoLife Germany HoldCo GmbH, a German
limited company
and wholly-owned subsidiary of CryoLife
(“Parent”),
Jolly Buyer
Acquisition
GmbH
, a
Swiss
limited company
and
whol
ly-o
wned subsidiary of
Parent
(“
Buyer
”)
,
the security
holders of JOTEC who are party to the Purchase Agreement,
and
Lars Sunnanväder
in
his
capacity as the
representative of
such security
holders of JOTEC
. Pursuant to the
Purchase Agreement
,
the Buyer will acquire at least 94% of the outstanding shares of JOTEC,
and
up to all of the shares of JOTEC
. CryoLife’s and
JOTEC’s
board
s
of directors each
have
approved the
Purchase
Agreement.
Und
er the terms of the Purchase
Agreement, CryoLife will pay an aggregate of
up to
$
225
.0 million in consideration, consisting of
up to
$
168
.
75
million in cash and
$
56.25
million
in shares
of CryoLife
’s common
stock
, represent
ed by
up to
2
,
682,403
shares
of CryoLife
’s common stock
.
The
cash portion of the
acquisition
consideration shall consist of
a
cash amount
to
be paid to
the
security
holders of
JOTEC who are party to the Purchase Agreement, and cash to be paid to holders of shareholder loans
extended
to JOTEC for such shareholder loans
.
A portion of the
acquisition
consideration
may
also be used to pay off
JOTEC’s
outstanding indebtedness and certain transaction costs
of
JOTEC
and its security
holders in connection with
the
acquisition
.
The equity
portion of the
acquisition
consideration shall
be issued pursuant to
a private placement under
Regulation S
promulgated under the Securities Act of 1933, as amended
(“Regulation S”)
. The
value of the shares
of CryoLife’s common stock to be issued
as equity
acquisition
consideration
is calculated
based on a
60 trading
day volume-weighted average
trading
price of
CryoLife’s
common stock
for
6
0 consecutive trading days
immediately
preceding
the
October
10
, 2017
signing date of the
Purchase
Agreement
.
Such shares of CryoLife’s com
mon stock will be subject to a six
-month lockup and transfer restrictions as provided under Regulation S
.
The aggregate
acquisition
consideration
payable in the transaction
is subject to certain adjustments, including amounts based on
JOTEC’s
cash
-
on
-
hand
and indebtedness
as of the
closing of the acquisition
, with an audit of these
adjustments
occurring after the closing pursuant to the
Purchase
Agreement
.
Pursuant to the
Purchase
Agreement, $
22
.
5
million
in cash
will be held
in escrow
as
partial
security for the
indemnification obligations
of
the
JOTEC
securit
y
holder
s
who are party to the Purchase Agreement
.
T
he
funds remaining in the indemnification escrow account
will be released
approximately eighteen months
from the date of closing
of the
acquisition
, less the aggregate amount of any pending
and unresolved
claims as of such date
.
The
Purchase
Agreement contains
customary representations, warranties and covenants
made
by the security holders of JOTEC
who are
party to the Purchase Agreement,
and CryoLife
, Parent and Buyer
.
JOTEC’s
security
holders
who are party to the Pu
rchase Agreement
agreed to indemnify
CryoLife
and its affiliates
for
certain matters, including breaches of representations, warranties and covenants included in the
Purchase
Agreement, up to the
$22
.
5
million escrow fund
, subject to certain exceptions
pursuant to which CryoLife and its affiliates may recover indemnified
losses from recipients of
acquisition
consideration in amounts in excess of the escrow fund
.
The closing of the
acquisition
is
subject to customary closing conditions for transactions of this type, including, among other things,
termination
and/or amendment
of certain
agreements
,
the accuracy of the representations and warranties
,
and compliance with the covenants set forth in the
Purchase
Agreement.
The foregoing description of the
Purchase
Agreement does not purport to be complete and is qualified in its entirety by reference to the
Purchase
Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The
Purchase
Agreement has been attached to this Current Report on Form 8-K to provide investors with information regarding its terms. The
Purchase
Agreement is not intended to provide any other factual information about
CryoLife
,
JOTEC
or any of their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the
Purchase
Agreement were made only for purposes of the
Purchase
Agreement as of the specific dates therein, were solely for the benefit of the parties to the
Purchase
Agreement, may be subject to limitations agreed upon by such contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among such parties to the
Purchase
Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to such contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the
Purchase
Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the
Purchase
Agreement, which subsequent information may or may not be fully reflected in
CryoLife’s
public disclosures.
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Item 2.02
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Results of Operations & Financial Conditions
|
On
October 10, 2017, t
he Company
issued a press release announcing
the execution of the Purchase Agreement, providing an update as to the Company’s preliminary results for the third quarter of 2017, and
providing that an update to
the Company’s guidance for the remainder of 2017
with be provided during the Company’s third quarter conference call
. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
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Item 3.02
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Unregistered Sales of Equity Securities
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The information set forth in Item 1.01 above with respect to the issuance of shares of
the Company’s
common stock as part of the
acquisition
consideration is incorporated into this Item 3.02 by reference. The shares of common stock have not been registered under the Securities Act or any state securities laws. The
shares will be issued pursuant to a private placement under
Regulation S
promulgated under the Securities Act
.
The shares of common stock may not be offered or sold in the United
States
absent registration or exemption from registration under the Securities Act and any applicable state securities laws. Neither this Current Report on Form 8-K nor any of the exhibits attached hereto is an offer to sell or the solicitation of an offer to buy shares of common stock or other securities of
the Company
.
Item 7.01
|
Regulation FD Disclosure
|
On
October
10
, 2017
,
the Company
issued a press release announcing the execution of the
Purchase
Agreement
.
A
copy of
the press release
is
furnished
as Exhibit 99.1 hereto and incorporated herein by reference.
The information in Item
s 2.02 and
7.01 of this Current Report on Form 8-K
, including Exhibit 99.1 attached hereto,
is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to Item
2.02 or
7.01 of this Current Report on Form 8-K.
Commitment Letter
In connection with the Purchase Agreement, the Company entered into a debt commitment letter(the “Commitment Letter”), dated as of October 10, 2017, with Deutsche Bank AG New York Branch (“DBNY”) and Deutsche Bank Securities Inc. (together with DBNY, “DB”), Capital One, National Association (“CONA”), and Fifth Third Bank (“Fifth Third” and, together with DB and CONY, collectively, the “Commitment Parties”), pursuant to which, among other things, the Commitment Parties have committed to provide the Company with a senior secured term loan in an aggregate principal amount of $225,000,000 (the “Term Loan Facility”) to finance, in part, the acquisition of JOTEC, and a $30,000,000 revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facility”). The Company and each of its existing and subsequently acquired or formed domestic subsidiaries (subject to certain exceptions and exclusions) will guarantee the obligations under the Credit Facility (the “Guarantors”). The Credit Facility will be secured by a security interest in substantially all existing and after-acquired real and personal property (subject to certain exceptions and exclusions) of the Company and the Guarantors. The proceeds from the Term Loan Facility, together with the Company’s cash-on-hand, will be sufficient to finance the aggregate cash consideration to JOTEC’s security holders who are party to the Purchase Agreement and associated fees and expenses and to repay certain existing Company and JOTEC debt. Pursuant to the Purchase Agreement, JOTEC has agreed to use commercially reasonable efforts to provide cooperation to the Company in connection with the Term Loan Facility. The Commitment Parties’ commitment to provide the Credit Facility is subject to certain conditions, including: the negotiation and execution of definitive documentation consistent with the Commitment Letter; the consummation of the acquisition of JOTEC substantially concurrently with the initial funding under the Term Loan Facility; delivery of certain unaudited and pro forma financial statements; subject to certain limitations, the absence of a material adverse effect on JOTEC; the accuracy of specified representations and warranties of the security holders who are parties to the Purchase Agreement and specified representations and warranties of the Company to be set forth in the definitive loan documents; and other customary closing conditions. The Financing would replace the Company’s existing credit facility.
Item 9.01
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Financial Statements and Exhibits
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(d)
Exhibits
.
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Exhibit No.
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Description
|
2.1
*
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Securities Purchase Agreement, dated as of October 10, 2017, by and among CryoLife, Inc., CryoLife Germany HoldCo GmbH, Jolly Buyer Acquisition GmbH, JOTEC AG, each of the security holders identified therein, and Lars Sunnanväder as the representative of such security holders
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99.1
**
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Press Release of CryoLife, Inc., dated October 10, 2017
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* The schedules and exhibits to the Securities Purchase Agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. CryoLife will furnish copies of any such schedules and exhibits to the Securities and Exchange Commission upon request.
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** Furnished herewith, not filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, CryoLife, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CRYOLIFE, INC.
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Date:
October 10, 2017
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By:
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/s/ D. Ashley Lee
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Name:
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D. Ashley Lee
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Title:
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Executive Vice President, Chief Operating Officer and Chief Financial Officer
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