Item 1.01 Entry into a Material Definitive Agreement.
On March 2, 2024, Cadence Design Systems, Inc., a Delaware corporation ("Cadence"), entered into a Share Purchase Agreement (the "Purchase Agreement") with the shareholders of BETA CAE Systems International AG, a Swiss company limited by shares (together with its subsidiaries, "BETA CAE" and such shareholders, collectively, the "Sellers"), to purchase from the Sellers the entire issued share capital of BETA CAE (such transaction, the "Acquisition").
Pursuant to the terms of, and subject to the conditions specified in, the Purchase Agreement, upon consummation of the Acquisition ("Completion"), Cadence will pay to the Sellers aggregate consideration based on an enterprise value of $1.24 billion (the "Purchase Price"). 60% of the Purchase Price will be paid in the form of cash consideration, subject to customary purchase price adjustments and holdback and escrow arrangements in accordance with the Purchase Agreement. Cadence intends to fund the cash consideration through a combination of cash on hand and borrowings under existing and/or new debt facilities. 40% of the Purchase Price will be paid in the form of shares of Cadence's common stock, par value $0.01 per share ("Cadence Stock"). The number of shares of Cadence Stock to be issued in connection with the Acquisition (such shares, the "Stock Consideration") will be determined using a per share value calculated as the average of the daily volume weighted average sale price per share of Cadence Stock on Nasdaq for each of the thirty (30) consecutive trading days ending on and including the third trading day immediately prior to the date of Completion.
Cadence intends to issue the Stock Consideration in reliance upon the exemptions from registration afforded by Section 4(a)(2), Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act"), and/or Regulation S promulgated under the Securities Act. Cadence has also agreed to file a registration statement on Form S-3 (the "Registration Statement") promptly following Completion covering the resale of the Stock Consideration by the Sellers.
The Purchase Agreement contains warranties, covenants, closing conditions and indemnities customary for acquisitions of this nature. Among other conditions, Completion is conditioned on the expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and receipt of other required approvals under antitrust and foreign direct investment laws of certain other specified jurisdictions. Completion is currently expected to occur in the second quarter of 2024.
The Purchase Agreement also provides for customary termination rights for the parties, including the right to terminate the Purchase Agreement due to the failure to obtain required regulatory approvals on or prior to May 31, 2024 (subject to two automatic extensions until November 29, 2024, the "Longstop Date"). Under the terms of the Purchase Agreement, Cadence will be required to pay a reverse termination fee of up to $60 million in the event the Purchase Agreement is terminated due to the failure to obtain such required regulatory approvals on or prior to the Longstop Date.
The foregoing summary of the Purchase 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 Purchase Agreement, which will be filed as an exhibit to the earlier to be filed of (i) Cadence's Quarterly Report on Form 10-Q for the quarter ending March 31, 2024 and (ii) the Registration Statement.

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Cadence Design Systems Inc. published this content on 05 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 March 2024 14:12:17 UTC.