Insight Enterprises, Inc. (NasdaqGS:NSIT) entered into a definitive agreement to acquire PCM, Inc. (NasdaqGM:PCMI) from a group of shareholders for approximately $440 million on June 23, 2019. Insight will acquire PCM for $35 per share in cash. Each outstanding option to purchase a PCM Share under PCM's stock plans, whether vested or unvested, will be cancelled in exchange for the right to receive an amount in cash equal to the excess, if any, of the per share merger consideration over the exercise price of such option and each restricted stock unit (RSU) outstanding under PCM's stock plans, whether vested or unvested, will be cancelled in exchange for the right to receive an amount in cash equal to the per share merger consideration plus any accrued and unpaid dividend equivalents with respect to such RSU.

Insight will fund the acquisition through cash on hand and borrowings under a new asset based loan revolving credit facility. Insight entered into a debt commitment letter, dated as of June 23, 2019, with JPMorgan Chase Bank, N.A. pursuant to which, JPMorgan has committed to provide a senior secured revolving credit facility in an aggregate principal amount of up to $1.5 billion. The proceeds from the debt financing may be used to finance the merger, refinance certain existing indebtedness of Insight and PCM, pay fees and expenses incurred in connection with the merger, the debt financing and the refinancing and finance other working capital needs and/or other general corporate purposes. Following the transaction, PCM will operate as a wholly owned subsidiary of Insight and its shares will cease to be listed on the Nasdaq. In the event of a termination of the merger agreement under specified circumstances, PCM will be required to pay Insight a termination fee of $16.6 million.

The transaction is subject to certain customary closing conditions, including regulatory approvals, the expiration or earlier termination of the waiting period applicable under the Hart-Scott Rodino Act and the receipt of antitrust approval or clearance under any other applicable antitrust or competition law and approval of PCM's shareholders in a meeting to be held on August 26, 2019. The consummation of the merger is not subject to Insight's receipt of financing. The Board of Directors of Insight and PCM have unanimously approved the transaction. The Board of Directors of PCM unanimously recommended that PCM's stockholders vote in favor of the transaction. B. Riley FBR, Inc. delivered to the Board of Directors of PCM, a written opinion, dated June 23, 2019, as to the fairness, from a financial point of view, of the merger consideration to be received by PCM's stockholders. As of June 23, 2019, stockholder's representing approximately 23% of the PCM Shares issued and outstanding at such time, entered into a voting agreement with Insight and PCM to vote in favor of the transaction. As of July 26, 2019, the transaction was granted an early termination notice. On August 26, 2019, the transaction was approved by the shareholders of PCM.

The transaction is expected to close in the second half of 2019. As of July 26, 2019, the merger is expected to be completed within five months from the signing of the merger agreement. The transaction is expected to be materially accretive to earnings, adding more than $0.7 in 2020 adjusted EPS. J.P. Morgan Securities LLC acted as financial advisor and Stephen Kotran of Sullivan & Cromwell LLP acted as legal advisor to Insight. Ryan J. Bernath and Chobun Hieblinger of B. Riley FBR, Inc. acted as financial advisors and Craig S. Mordock of Sheppard, Mullin, Richter & Hampton LLP and Morris, Nichols, Arsht & Tunnell LLP acted as legal advisors to PCM. Alan F. Denenberg of Davis Polk & Wardwell LLP advising J.P. Morgan Securities LLC as financial adviser to Insight Enterprises. The Proxy Advisory Group, LLC, acted as PCM's proxy solicitor for a fee not expected to exceed $20,000. B. Riley received a fee of $0.5 million as a result of the delivery of its fairness opinion. Additionally, if a sale transaction, including the merger, is consummated during the term of B. Riley's engagement or within six months following the termination thereof, or if PCM receives a proposal or enters into an agreement with respect to a potential sale transaction within six months after the termination of B. Riley's engagement and such sale transaction is subsequently consummated at the same $35 per share acquisition price, then B. Riley will receive an advisory fee of $3.32 million, which fee will be reduced by $0.5 million already paid.