HGGC LLC entered into a definitive agreement to acquire Monotype Imaging Holdings Inc. (NasdaqGS:TYPE) (‘Monotype') from Gilead Capital LP, RGM Capital, LLC, Trigran Investments, Inc., BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc. and others for approximately $820 million on July 25, 2019. Under the agreement, HGGC will acquire all outstanding common shares, restricted shares, restricted stock units and performance stock units of Monotype for $19.85 per share in cash. Each Monotype stock option, whether vested or unvested will be converted into the right to receive the excess of the $19.85 per share offer price over the applicable exercise price of the option. Following completion of the transaction, Monotype will become a privately-held company and shares of Monotype's common stock will no longer be listed on any public market. HGGC intends to fund all of its payment obligations in connection with the transaction with a combination of committed debt and equity financing and available cash of Monotype and its subsidiaries. Deutsche Bank Securities Inc. will be the left lead arranger on the debt financing for the transaction. HGGC has received a debt commitment letter entered into on July 25, 2019, for the purpose of debt financing in an aggregate amount of up to $625 million, consisting of (i) a $440 million senior secured first lien term loan facility, (ii) a $135 million senior secured second lien term loan facility and (iii) a $50 million senior secured first lien revolving credit facility. HGGC has also received an equity commitment letter, pursuant to which the guarantors have severally committed to contribute to Parent an aggregate amount of up to $275 million in cash for the purpose of funding a portion of the aggregate merger consideration. Monotype's Board of Directors, with the assistance of its financial advisor, will conduct a 30-day 'go-shop' process from July 25, 2019, during which it will actively initiate, solicit, encourage and evaluate alternative acquisition proposals, and potentially enter into negotiations with any parties that offer alternative acquisition proposals. Monotype will have the right to terminate the merger agreement to accept a superior proposal, subject to the terms and conditions of the merger agreement. As per the agreement, Monotype may be required to pay a fee of up to $24.75 million while HGGC may be required to pay a fee of $49.5 million in the event of termination of the transaction under certain circumstances. Monotype expects it will remain headquartered in Woburn, Massachusetts.

The transaction is subject to, among other customary closing conditions, approval by the holders of a majority of the shares of Monotype common stock, the expiration or termination of any applicable waiting periods under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 and the receipt of all clearances, approvals and/or authorizations required by German antitrust laws. There are no financing contingencies contemplated under the terms of the merger agreement. Monotype's Board of Directors unanimously approved the transaction and recommends shareholders to adopt the agreement. The acquisition is subject to regulatory clearances. As on August 16, 2019, the U.S. Federal Trade Commission granted the early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. As of August 20, 2019, Gilead Capital LP has expressed its concern regarding the transaction and believes that the offer price of $19.85 per share is inadequate. As of August 30, 2019, the German Federal Cartel Office approved the transaction. As of October 9, 2019, the transaction received approval from Monotype's stockholders. The transaction is expected to close in the fourth quarter of 2019.

J.P. Morgan Securities LLC served as financial advisor to Monotype and provided a fairness opinion to the Monotype Board with respect to the transaction. For services rendered in connection with the merger and the delivery of its opinion, the Monotype has agreed to pay J.P. Morgan a fee of approximately $13 million, of which $2 million became payable upon delivery of the opinion and the remainder will be payable only upon the completion of the merger. John M. Mutkoski, Joseph L. Johnson, Andrew H. Goodman, Andrea Agathoklis Murino, Joel Lehrer, Will Pearce, Janet Andolina, Jackie Klosek, Jacob Osborn, Deborah Birnbach, Natascha George and Lillian Kim of Goodwin Procter LLP acted as legal advisors to Monotype. Deutsche Bank Securities Inc. acted as financial advisor to HGGC. Travis L. Nelson, P.C., Joshua M. Zachariah, P.C., Rodin Hai-Jew, Joseph K. Halloum, Sonali Jindal and Kristen Derhaag of Kirkland & Ellis LLP acted as legal advisors to HGGC. Innisfree M&A Inc. acted as the proxy solicitor to Monotype as part of the transaction and at a total cost of $0.02 million plus reasonable expenses. Computershare Investor Services acted as the transfer agent to Monotype as part of the transaction.

HGGC, LLC completed the acquisition of Monotype Imaging Holdings Inc. (NasdaqGS:TYPE) from Gilead Capital LP, RGM Capital, LLC, Trigran Investments, Inc., BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc. and others on October 11, 2019. As a result of the transaction completion, Monotype is now a privately held company and its common stock has ceased trading on the NASDAQ Stock Market. Effective upon completion of the merger, the following persons were appointed to serve as directors of Monotype Imaging Holdings: Richard F. Lawson, Bill Conrad, David Chung, Scott E. Landers and Steven Young. The following persons, who were directors of Monotype Imaging Holdings prior to the completion of the merger, are no longer directors of Monotype Imaging Holdings: Eileen A. Campbell, Gay W. Gaddis, Roger J. Heinen., Pamela F. Lenehan, Peter J. Simone, Timothy B. Yeaton and Denise F. Warren. Effective upon completion of the merger, the following persons continued to serve as officers of Monotype Imaging Holdings: Scott E. Landers, Christopher Brooks, Benjamin W.L. Semmes, Steven R. Martin, Janet M. Dunlap and Brett S. Zucker.