Introductory Note
On October 31, 2022, Pzena Investment Management, Inc., a
Delaware corporation (the “Company” or “Pzena”), completed the
transactions contemplated by the Agreement and Plan of Merger,
dated as of July 26, 2022 (the “Merger Agreement”), by and among
the Company, Pzena Investment Management, LLC, a Delaware limited
liability company (“PIM,
LLC”), and Panda Merger Sub, LLC, a Delaware limited
liability company and a wholly owned subsidiary of PIM, LLC
(“Merger Sub”). At
the closing, the Company merged with and into Merger Sub (the
“Merger”), with
Merger Sub surviving the Merger.
Item 1.01. |
Entry into a Material Definitive Agreement.
|
On October 31, 2022, PIM, LLC (the “Borrower”) and certain
subsidiaries of the Borrower entered into a $200,000,000 credit
agreement (the “Credit
Agreement”) with the lenders party thereto, JPMorgan Chase
Bank, N.A. (“JPM”),
as an administrative agent, JPM and Regions Bank as joint lead
arrangers, the other guarantors party thereto (together with Pzena,
the “Loan
Parties”).
The Credit Agreement provides for a term loan facility in an
aggregate principal amount of $175,000,000 (the “Term Loan”) and revolving
commitments in an aggregate principal amount of $25,000,000 (the
“Revolving
Commitments”). The outstanding loans under the Credit
Agreement will mature and be due and payable five years after the
closing date of the Credit Agreement.
The Credit Agreement contains a total leverage financial covenant
and also contains customary affirmative covenants for a transaction
of this nature, including, among other things, covenants relating
to (i) maintenance of adequate financial and accounting books
and records, (ii) delivery of financial statements and other
information, (iii) preservation of existence of Borrower and
subsidiaries, (iv) payment of taxes and claims,
(v) compliance with laws, (vi) maintenance of insurance,
(vii) use of proceeds, (viii) maintenance of properties,
and (xi) conduct of business.
The Credit Agreement also contains customary negative covenants for
a transaction of this nature, including, among other things,
covenants relating to (i) debt, (ii) liens,
(iii) investments, (iv) negative pledges,
(v) dividends and restricted junior debt payments,
(vi) restriction on fundamental changes, (vii) sale of
assets, (viii) transactions with affiliates,
(ix) restrictive agreements, and (x) changes in fiscal
year. The Credit Agreement also contains various customary events
of default (subject to certain grace periods, to the extent
applicable)
The above description of the Credit Agreement does not purport to
be complete.
Item 2.01. |
Completion of Acquisition or Disposition of Assets.
|
The information set forth in the Introductory Note and in Items
3.03, 5.01 and 5.02 of this Current Report is incorporated herein
by reference.
On October 31, 2022, Pzena completed the transactions
contemplated by the Merger Agreement. Pursuant to the Merger
Agreement, the Company merged with and into the Merger Sub, with
Merger Sub surviving the Merger.
At the effective time of the Merger (the “Effective Time”), (1) each
issued and outstanding share of Class A common stock, par
value $0.01 per share, of the Company (each, a “Class A Share”), other than
certain excluded shares, was converted into the right to receive
$9.60 in cash, without interest (the “Merger