Item 1.01. Entry into a Material Definitive Agreement.
On August 1, 2022, EVO Payments, Inc., a Delaware corporation ("EVO Payments"),
entered into an Agreement and Plan of Merger (the "Merger Agreement") with
Global Payments Inc., a Georgia corporation ("Global Payments"), and Falcon
Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Global
Payments ("Merger Subsidiary").
Merger Agreement
Pursuant to the Merger Agreement, and subject to the terms and conditions
thereof, Merger Subsidiary will merge with and into EVO Payments (the "Merger"),
with EVO Payments surviving the Merger as a wholly owned subsidiary of Global
Payments. Subject to the terms and conditions set forth in the Merger Agreement,
at the effective time of the Merger (the "Effective Time"), each share of
Class A Common Stock of EVO Payments, par value $0.0001 per share ("Class A
Common Stock") outstanding immediately prior to the Effective Time (including
each share of Class A Common Stock issued upon (a) the Exchange and (b) the
Conversion as described in further detail below) will be converted into the
right to receive $34.00 in cash, without interest (such amount per share, the
"Merger Consideration"), other than (i) those shares of Class A Common Stock
owned by EVO Payments as treasury stock or otherwise, Global Payments or Merger
Subsidiary, (ii) any shares of Class A Common Stock owned by any wholly owned
subsidiary of Global Payments (other than Merger Subsidiary) or of EVO Payments
(in each case, other than any such shares held in a fiduciary, representative or
other capacity on behalf of third parties) and (iii) any shares as to which
appraisal rights have been properly exercised, and not withdrawn, in accordance
with the Delaware General Corporation Law.
The Merger Agreement also provides that, at the Effective Time, each outstanding
EVO Payments restricted stock unit award with respect to Class A Common Stock
that is not subject to performance-vesting conditions, and each outstanding
unvested EVO Payments stock option, will generally be converted into a
corresponding restricted stock unit or option award with respect to shares of
Global Payments common stock, no par value ("Global Payments Common Stock"),
adjusted based on the Equity Award Exchange Ratio. EVO Payments
performance-vesting restricted stock unit awards will be converted into
time-vesting restricted stock unit awards with respect to Global Payments Common
Stock, with the number of shares of EVO Payments Class A Common Stock subject to
the award prior to conversion determined as described in the Merger Agreement.
Each such converted Global Payments equity award will be subject to the same
terms and conditions (including vesting, exercisability and treatment upon
termination terms) as applied to the corresponding EVO Payments equity award.
Notwithstanding the foregoing, each outstanding EVO Payments equity award held
by certain employees of EVO Payments whose employment is terminated without
cause, or who resign for good reason, at the Effective Time, shall be vested and
canceled in exchange for a cash payment equal to the Merger Consideration
multiplied by the number of shares of EVO Payments Class A Common Stock
underlying the award. Outstanding vested EVO Payments stock options will be
canceled in exchange for a cash payment equal to the Merger Consideration less
the applicable exercise price, with any vested stock options with an exercise
price that is equal to or greater than the Merger Consideration canceled for no
consideration. For purposes of the Merger Agreement, the "Equity Award Exchange
Ratio" means the quotient of (A) the Merger Consideration divided by (B) the
average of the closing sale prices of one share of Global Payments Common Stock
on the New York Stock Exchange as reported by The Wall Street Journal for the
fifteen consecutive full trading days ending on the trading day immediately
preceding the closing of the Merger.
If the Merger is consummated, the Class A Common Stock will be delisted from the
NASDAQ stock exchange and deregistered under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
Each of EVO Payments, Global Payments and Merger Subsidiary has made customary
representations and warranties and covenants in the Merger Agreement, including,
among others, covenants to use their respective reasonable best efforts to (i)
take all actions necessary to effect the Merger, including using reasonable best
efforts to take all actions to obtain required regulatory approvals, subject to
the limitation that no action will be required if such action, individually or
in the aggregate with any other action, would reasonably be expected to
materially impair the benefits that Global Payments expects to achieve from the
Merger and the transactions contemplated by the Merger Agreement and, (ii) in
the case of EVO Payments, obtain approval of its stockholders. In addition, EVO
Payments has agreed to other customary covenants, including, among others,
covenants to conduct its business in the ordinary course and to refrain from
taking certain specific actions during the interim period between the execution
of the Merger Agreement and the Effective Time.
The obligations of the parties to consummate the Merger are subject to the
satisfaction or waiver of customary closing conditions set forth in the Merger
Agreement, including, among others, (i) the adoption of the Merger Agreement by
the EVO Payments stockholders, (ii) the expiration or termination of any waiting
period applicable under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, as well as the receipt of certain additional regulatory
approvals outside of the United States, (iii) the absence of any applicable law
or order by a court or other governmental authority of competent jurisdiction in
effect restraining, enjoining or otherwise prohibiting the Merger, (iv) the
absence of a "Material Adverse Effect" (as defined in the Merger Agreement) with
respect to EVO Payments, (v) the other party's representations and warranties
being true and correct (subject to certain customary materiality exceptions) and
the other party having performed in all material respects its obligations under
the Merger Agreement, (vi) the completion of (x) the Exchange and the Conversion
(as described in further detail below) and (y) transactions contemplated by the
Blueapple Sale Agreement (as described in further detail below) and (vii) the
TRA Amendment being in full force and effect (as described in further detail
below). The Merger is not conditioned on Global Payments or any other party
obtaining debt financing.
--------------------------------------------------------------------------------
The Merger Agreement provides that EVO Payments must comply with
customary non-solicitation restrictions, including, among others, certain
restrictions on its ability to solicit alternative Acquisition Proposals (as
defined in the Merger Agreement) from third parties, to provide non-public
information to third parties and to engage in negotiations with third parties
regarding alternative Acquisition Proposals. Subject to certain customary
"fiduciary out" exceptions, the EVO Payments board of directors is required to
recommend that the EVO Payments stockholders adopt the Merger Agreement and to
call a meeting of the EVO Payments stockholders to vote on a proposal to adopt
the Merger Agreement.
Either EVO Payments or Global Payments may terminate the Merger Agreement prior
to the Effective Time in certain circumstances, including, among others, (i) by
mutual agreement, (ii) by either party if the Merger is not completed on or
before May 1, 2023 (subject to two automatic three-month extensions in certain
circumstances if required regulatory approvals have not been obtained by such
date), (iii) by either party if a governmental authority of competent
jurisdiction has issued a final non-appealable order or law permanently
prohibiting the Merger , (iv) by either party if EVO Payments' stockholders fail
to adopt the Merger Agreement upon a vote taken thereon, and (v) by either party
if the other party breaches its representations, warranties or covenants in the
Merger Agreement or otherwise breaches its obligations under the Merger
Agreement such that the applicable condition to the consummation of the Merger
is not satisfied, subject in certain cases, to the right of the breaching party
to cure the breach and payment of termination fees as described below. In
addition, subject to the conditions and applicable termination fees as
prescribed in the Merger Agreement, prior to obtaining approval of the EVO
Payments stockholders, (x) EVO Payments may terminate the Merger Agreement in
order to enter into a definitive agreement with a third party to effect the
transaction contemplated by a Superior Proposal (as defined in the Merger
Agreement), and (y) Global Payments may terminate the Merger Agreement in the
event of an Adverse Recommendation Change (as defined in the Merger Agreement)
with respect to the Merger or if EVO Payments breaches, in any material respect,
its covenants not to solicit alternative Acquisition Proposals.
In addition, the Merger Agreement provides that EVO Payments must pay Global
Payments a $100 million termination fee if Global Payments terminates the Merger
Agreement in the event of an Adverse Recommendation Change, or if EVO Payments
terminates the Merger Agreement to enter into a definitive agreement with a
third party to effect the transaction contemplated by a Superior Proposal, as
set forth in, and subject to the conditions of, the Merger Agreement. EVO
Payments must also pay Global Payments a $100 million termination fee if the
Merger Agreement is terminated in certain specified circumstances where an
alternative Acquisition Proposal to the Merger has been made and not withdrawn
at least three business days prior to the EVO Payments stockholders' meeting
and, within twelve (12) months following such termination, EVO Payments enters
into a definitive agreement in respect of an alternative transaction or an
alternative transaction is consummated (whether or not the same transaction
contemplated by the alternative Acquisition Proposal as that referred to above).
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, a copy of which is filed as
Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
The Merger Agreement has been attached to provide investors and security holders
with information regarding its terms and is not intended to provide any factual
information about EVO Payments, Merger Subsidiary or Global Payments. The
representations, warranties and covenants in the Merger Agreement were made only
for the purpose of the Merger Agreement and solely for the benefit of the
parties to the Merger Agreement as of specific dates. Such representations,
warranties and covenants may have been made for the purposes of allocating
contractual risk between the parties to the Merger Agreement instead of
establishing these matters as facts, may or may not be accurate as of any
specific date, and may be subject to important limitations and qualifications
(including exceptions thereto set forth in the disclosure letter agreed to by
the contracting parties) and may therefore not be complete. The representations,
warranties and covenants in the Merger Agreement may also be subject to
standards of materiality applicable to the contracting parties that may differ
from those applicable to investors. Investors 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 to
the Merger Agreement or any of their respective subsidiaries or affiliates.
Moreover, information concerning the subject matter of the representations,
warranties and covenants may change after the date of the Merger Agreement,
which subsequent information may or may not be fully reflected in EVO Payments'
public disclosures.
Voting and Support Agreements
As an inducement to Global Payments entering into the Merger Agreement, on
August 1, 2022, (x) MDCP Cardservices II LLC, Madison Dearborn Capital Partners
VI-C, L.P. and MDCP Cardservices LLC (collectively, the "MDP Entities"), and
(y) Mr. James G. Kelly, EVO Payments' Chief Executive Officer (together with the
MDP Entities, the "Stockholders"), who collectively beneficially own shares
representing approximately 22% of the voting power of EVO Payments, entered into
Voting and Support Agreements with Global Payments, Merger Subsidiary and EVO
Payments (the "Voting Agreements"), pursuant to which the Stockholders have
agreed to, among other things, (i) vote their shares in favor of the matters to
be
--------------------------------------------------------------------------------
submitted to EVO Payments' stockholders in connection with the Merger, (ii) vote
their shares against any action, proposal, transaction or agreement that could
reasonably be expected to impede, interfere with, delay, discourage, adversely
affect or inhibit the adoption of the Merger Agreement or the timely
consummation of transactions contemplated by the Merger, subject to the terms
and conditions set forth in the Voting Agreement and (iii) exchange, in
accordance with the terms of that certain Exchange Agreement, dated as of
May 22, 2018 by and among EVO Payments, EVO Investco, LLC and the holders of
common stock of EVO Payments and other persons party thereto (as amended on
November 5, 2018, the "Exchange Agreement"), automatically and without further
action on the part of any party, all of the Stockholder's Paired Interests (as
defined in the Exchange Agreement) in accordance with the terms of
Section 2.04(a) and Section 2.01(f)(i) of the Exchange Agreement, effective
immediately prior to and conditioned upon the Closing (the "Exchange").
Following the Exchange, the shares of Class A Common Stock issued upon such
exchange will be converted into the right to receive the Merger Consideration
pursuant to, and in accordance with the terms of, the Merger Agreement.
Additionally, as an inducement to Global Payments entering into the Merger
Agreement, pursuant to its Voting Agreement, the MDP Entities each agreed to
irrevocably and unconditionally convert all shares of Series A Convertible
Preferred Stock of EVO Payments, par value $0.0001 (the "Series A Convertible
Preferred Stock") held by each such MDP Entity into Class A Common Stock,
. . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
2.1 Agreement and Plan of Merger, dated as of August 1, 2022, by and
among EVO Payments, Inc., Global Payments Inc. and Falcon Merger Sub
Inc.†
10.1 Voting Agreement, dated as of August 1, 2022, by and among EVO
Payments, Inc., Global Payments Inc., Falcon Merger Sub Inc., James G.
Kelly and the James G. Kelly Grantor Trust Dated January 12, 2012
10.2 Voting Agreement, dated as of August 1, 2022, by and among EVO
Payments, Inc., Global Payments Inc., Falcon Merger Sub Inc., MDCP
Cardservices II LLC, Madison Dearborn Capital Partners VI-C, L.P. and
MDCP Cardservices LLC
10.3 Common Unit Purchase Agreement, dated as of August 1, 2022, by and
between Global Payments Inc., EVO Payments, Inc. and Blueapple, Inc.
10.4 Amendment No. 1 to the Tax Receivable Agreement, dated as of
August 1, 2022, by and among EVO Payments, Inc., OpCo, Blueapple,
Inc., Madison Dearborn Capital Partners VI-B, L.P., Madison Dearborn
Capital Partners VI Executive-B, L.P., Madison Dearborn Capital
Partners VI-C, L.P. and MDCP Cardservices LLC
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
† Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The
registrant hereby undertakes to furnish supplementally copies of any of the
omitted schedules upon request by the SEC.
Forward Looking Statements
This communication contains "forward-looking statements" as that term is defined
under the Private Securities Litigation Reform Act of 1995 and other securities
laws, regarding Global Payments and EVO Payments, including, but not limited to,
statements about the strategic rationale and benefits of the proposed
transaction between Global Payments and EVO Payments, including future financial
and operating results, Global Payments' or EVO Payments' plans, objectives,
expectations and intentions and the expected timing of completion of the
proposed transaction. You can generally identify forward-looking statements by
the use of forward-looking terminology such as "anticipate," "believe,"
"continue," "could," "estimate," "expect," "explore," "evaluate," "forecast,"
"intend," "may," "might," "plan," "potential," "predict," "project," "seek,"
"should," "targeted," "will," or "would," or the negative thereof or other
variations thereon or comparable terminology. These forward-looking statements
are based on each of the companies' current plans, objectives, estimates,
expectations and intentions and inherently involve significant risks and
uncertainties, many of which are beyond Global Payments' or EVO Payments'
control. Although we believe the expectations reflected in any forward-looking
statements are based on reasonable assumptions, we can give no assurance that
our expectations will be attained, and therefore actual results and the timing
of events could differ materially from those anticipated in such forward-looking
statements as a result of these risks and uncertainties, which include, without
limitation, risks and uncertainties associated with: Global Payments' and EVO
Payments' ability to complete the potential transaction on the proposed terms or
on the anticipated timeline, or at all, including risks and uncertainties
related to securing the necessary regulatory and EVO Payments stockholders'
approvals and the satisfaction of other closing conditions to consummate the
proposed transaction; the occurrence of any event, change or other circumstance
that could give rise to the termination of the definitive merger agreement
relating to the proposed transaction; failure to realize the expected benefits
of the proposed transaction; significant transaction costs and/or unknown or
inestimable liabilities; the risk that EVO Payments' business will not be
integrated successfully, including with respect to implementing systems to
prevent a material security breach of any internal systems or to successfully
manage credit and fraud risks in business units, or that such integration may be
more difficult, time-consuming or costly than expected; Global Payments' ability
to obtain the expected financing to consummate the proposed transaction, and the
continued availability of capital and financing for Global Payments following
the proposed transaction; risks related to future opportunities and plans for
the combined company, including the uncertainty of expected future regulatory
filings, financial performance and results of the combined company following
completion of the proposed transaction; disruption from the proposed
transaction, making it more difficult to conduct business as usual or maintain
relationships with customers, employees or suppliers, including as it relates to
EVO Payments' ability to successfully renew existing client contracts on
favorable terms or at all and obtain new clients; failing to comply with the
applicable requirements of Visa, Mastercard or other payment networks or card
schemes or changes in those requirements; the ability of EVO Payments to retain
and hire key personnel; the diversion of management's attention from ongoing
business operations; the business, economic and political conditions in the
markets in which EVO Payments operate; the impact of new or changes in current
laws, regulations, credit card association rules or other industry standards,
including privacy and cybersecurity laws and regulations; effects relating to
the announcement of the proposed transaction or any further announcements or the
consummation of the potential transaction on the market price of EVO Payments'
common stock; the risk of potential stockholder litigation associated with the
potential transaction, including resulting expense or delay; regulatory
initiatives and changes in tax laws; the impact of the COVID-19 pandemic on the
operations and financial results of EVO Payments or the combined company;
general economic conditions; and other risks and uncertainties affecting Global
Payments and EVO Payments, including those described from time to time under the
caption "Risk Factors" and elsewhere in Global Payments' and EVO Payments'
Securities and Exchange Commission ("SEC") filings and reports, including Global
Payments' Annual Report on Form 10-K for the year ended December 31, 2021, EVO
Payments' Annual Report on Form 10-K for the year ended December 31, 2021 and
Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and future
filings and reports by either company. Moreover, other risks and uncertainties
of which Global Payments or EVO Payments are not currently aware may also affect
each of the companies' forward-looking statements and may cause actual results
and the timing of events to differ materially from those anticipated. Global
Payments and EVO Payments caution investors that such
--------------------------------------------------------------------------------
forward-looking statements are not guarantees of future performance and that
undue reliance should not be placed on such forward-looking statements. The
forward-looking statements made in this communication are made only as of the
date hereof or as of the dates indicated in the forward-looking statements and
reflect the views stated therein with respect to future events as at such dates,
even if they are subsequently made available by Global Payments or EVO Payments
on their respective websites or otherwise. Neither Global Payments nor EVO
Payments undertakes any obligation to update or supplement any forward-looking
statements to reflect actual results, new information, future events, changes in
its expectations or other circumstances that exist after the date as of which
the forward-looking statements were made.
Additional Information and Where to Find It
This communication is being made in connection with the proposed transaction
between Global Payments and EVO Payments. In connection with the proposed
transaction, EVO Payments intends to file a proxy statement with the SEC. EVO
Payments may also file other relevant documents with the SEC regarding the
proposed transaction. The information in the preliminary proxy statement will
not be complete and may be changed. The definitive proxy statement will be
delivered to stockholders of EVO Payments. This communication is not a
substitute for any proxy statement or any other document that may be filed with
the SEC in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF EVO PAYMENTS ARE URGED TO READ THE PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS
WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR
ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of the
preliminary proxy statement and the definitive proxy statement (in each case, if
and when available) and other documents containing important information about
EVO Payments and the proposed transaction once such documents are filed with the
SEC through the website maintained by the SEC at http://www.sec.gov. Copies of
the documents filed with the SEC by EVO Payments will be available free of
charge on EVO Payments' website at www.evopayments.com under the heading
"Investors" or, alternatively, by directing a request by telephone or mail to
EVO Payments at (770) 336-8463 or Ten Glenlake Parkway, South Tower, Suite 950,
Atlanta, Georgia, 30328, Attention: Investor Relations.
Participants in the Solicitation
EVO Payments, its directors and certain of its executive officers and employees
may be deemed to be participants in the solicitation of proxies from EVO
Payments' stockholders in connection with the proposed transaction. Information
regarding the persons who may, under the rules of the SEC, be deemed
participants in the solicitation of EVO Payments stockholders in connection with
the proposed transaction, including a description of their direct or indirect
interests, by security holdings or otherwise, will be set forth in the proxy
statement when it is filed with the SEC. Information about these persons is
included in EVO Payments' annual proxy statement and in other documents
subsequently filed with the SEC, and will be included in the proxy statement
when filed.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses
EVO PAYMENTS, INC. 
