Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On
April 14, 2019, Catalent Pharma Solutions, Inc. (Buyer), a Delaware corporation and a wholly owned subsidiary of Catalent, Inc., a Delaware corporation (Catalent and, together with Buyer and its other subsidiaries, the
Company), entered into an Agreement and Plan of Merger (the Merger Agreement) with Catalent Holdco I Inc., a Delaware corporation and a wholly owned subsidiary of Buyer (Merger Sub), Paragon Bioservices, Inc., a
Delaware corporation (Paragon), Pearl Shareholder Representative, LLC, as representative of the Company Securityholders (as defined in the Merger Agreement), and, solely with respect to Section 4.12 of the Merger Agreement (solely
with respect to the Equity Financing (as defined therein)) and Section 8.19 of the Merger Agreement, Catalent. The respective boards of directors of Catalent, Buyer, Merger Sub and Paragon have unanimously approved the Merger Agreement.
The Merger Agreement provides for the acquisition of Paragon by Buyer pursuant to the merger of Merger Sub with and into Paragon, with Paragon
continuing as the surviving company and a wholly owned subsidiary of Buyer (the Merger). The aggregate purchase price payable by Buyer pursuant to the Merger Agreement is $1.2 billion in cash, subject to customary escrow
arrangements and a purchase price adjustment related to, among other things, the amount of Paragons working capital and other adjustments (as adjusted, the Closing Payment). Catalent has agreed to guarantee to Paragon the complete
and punctual payment, observance, performance and discharge of the obligations of Buyer under the Merger Agreement.
The Merger Agreement contains customary representations, warranties, and covenants of Paragon and Buyer. From the date of the Merger Agreement
until the closing of the transactions contemplated thereby (the Merger Closing), Paragon is required to operate its business in the ordinary course and to comply with certain covenants regarding the operation of its business. The Company
has obtained representation and warranty insurance, subject to exclusions, policy limits and certain other terms and conditions, to obtain coverage for any loss resulting from any breach of certain representations and warranties made by Paragon
pursuant to the Merger Agreement.
The Merger Closing is subject to customary closing conditions, including, among others, (i) the
absence of any governmental order restraining, enjoining or otherwise making illegal the consummation of the transactions contemplated by the Merger Agreement, (ii) the expiration or termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the HSR Act) applicable to the Merger, (iii) the accuracy of the parties representations and warranties contained in the Merger Agreement (subject to certain materiality
qualifications), (iv) the parties compliance with the covenants and agreements contained in the Merger Agreement in all material respects, and (v) the absence of a material adverse effect with respect to Paragon. The Merger Agreement
contains certain termination rights for Paragon and Buyer and, subject to certain limitations set forth therein, may be terminated by either Paragon or Buyer if the Merger Closing has not occurred on or before August 14, 2019. The Company
currently anticipates that the Merger Closing will occur in the fourth quarter of the Companys fiscal 2019, although no assurance can be given in that regard.
The foregoing summary 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, which is filed as Exhibit 2.1 hereto and incorporated herein by reference. The Merger Agreement has been filed to provide investors and securityholders with information regarding
its terms and conditions. It is not intended to provide any other information about Paragon, Buyer, or Catalent. The Merger Agreement contains representations, warranties, and covenants of the parties thereto made to and solely for the benefit of
each other, and such representations, warranties, and covenants may be subject to materiality and other qualifiers applicable to the contracting parties that differ from