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Some of the most interesting discussion in the filing:
At a meeting held on December 7, 2024, the Revance Board unanimously (i) determined that the A&R Merger Agreement, providing for the Offer and the Merger in accordance with Section 251(h) of the DGCL upon the terms and subject to the conditions set forth in the A&R Merger Agreement, and the Transactions contemplated by the A&R Merger Agreement are advisable and in the best interests of Revance and Revance’s stockholders; (ii) approved the execution and delivery of the A&R Merger Agreement by Revance, the performance by Revance of its covenants and other obligations thereunder, and the consummation of the Offer and the Merger upon the terms and subject to the conditions set forth in the A&R Merger Agreement; (iii) resolved to recommend that Revance’s stockholders tender their Shares to Merger Sub pursuant to the Offer, upon the terms and subject to the conditions set forth in the A&R Merger Agreement; and (iv) resolved that the Merger shall be effected under Section 251(h) of the DGCL. The Revance Board consulted with members of Revance management and representatives from Centerview and Skadden at various times, and considered a number of reasons, including the following non-exhaustive list of material reasons (not in any relative order of importance) that the members of the Revance Board participating in the decision believe support their unanimous decision and recommendation.
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Business, Financial Condition and Prospects. The Revance Board considered certain factors, including, but not limited to, the current and historical financial condition, results of operations, business, market dynamics, competitive position, assets and prospects, as well as the long-range plan, of Revance and the execution risks associated with executing the long-range plan of Revance as a stand-alone company, including the impact of Revance entering into the Sixth Amendment and ANZ Agreement. Revance weighed the certainty of its stockholders realizing an upfront payment of $3.10 per Share in cash in the Offer and the Merger against the risks and uncertainties associated with Revance and its business as a stand-alone company (including the risk factors set forth in Revance’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, filed with the SEC on November 7, 2024 and its other public filings). The Revance Board also considered that given the Company’s forecasted liquidity based on the Company’s current operating plan and excluding any impact from the pending consummation of the Merger, there was substantial doubt about Revance’s ability to continue as a going concern and that in order to mitigate the substantial doubt to continue as a going concern, the Company may be required to refinance its debt, conduct additional offerings, restructure operations, sell assets or reduce operating expenses.
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Market Dynamics. The Revance Board considered changes in the dynamics of the aesthetic injectable market and Revance’s performance and positioning in the market, including, among other things, (i) Revance’s ability to compete in an increasingly competitive neurotoxin and hyaluronic acid filler landscape, including several new entrants and additional expanded indications expected in both the Botulinum Toxin and Hyaluronic Acid Filler market, (ii) relatively flat growth in the US Hyaluronic Acid Filler Market, (iii) the slower than anticipated commercial trajectory of DAXXIFY® in both the cervical dystonia and glabellar lines indications, (iv) overall aesthetic injectable market headwinds, including frequency of patient visits softening and spend per visit down, (v) the trend toward increasing pricing pressure from aesthetic account consolidation and (vi) anticipated challenges with attracting and retaining top talent.
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Financial Risks. The Revance Board considered the financial risk due to the size of Revance’s current debt and nearing maturities, which constrained Revance’s ability to fund DAXXIFY® clinical trials in therapeutics indications, ex-U.S. opportunities and further investment in U.S. aesthetics and therapeutics commercial infrastructure. Further, material operating expense reductions would likely be required to extend the cash runway of the Company which would further challenge revenue growth. The Revance Board also considered potential debt restructuring options, but all such options were likely to incur significant costs, carried significant risk or require significant equity dilution.
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Cash Consideration; Certainty of Value. The Revance Board considered the fact that the Offer Price and Merger Consideration payable to Revance’s stockholders in the Offer and the Merger will consist entirely of cash, which will provide Revance stockholders with immediate liquidity and certainty of value. The
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Revance Board believed this certainty of value was in the best interest of stockholders, especially when viewed against the risks and uncertainties associated with Revance’s stand-alone strategy and the potential impact of such risks and uncertainties on the trading price of Shares.
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Negotiation Process. The Revance Board considered the fact that the terms of the Transactions were the result of robust, arms’ length negotiations conducted by Revance with the knowledge and at the direction of the Revance Board and with the assistance of independent financial and legal advisors. The Revance Board also considered that Revance engaged with multiple parties on their interests in pursuing a strategic transaction (as more fully described above in the section titled “—Background of the Offer and the Merger”). Additionally, the Revance Board considered the enhancements that Revance and its advisors were able to obtain as a result of negotiations with Crown, including the increase in Crown’s price per share to be paid at Closing from the October 30 Proposal and negotiating terms in the A&R Merger Agreement that increased the likelihood of completing the Offer and consummating the Merger. Finally, the Revance Board considered (i) Crown’s view of the then current value of Revance based on Revance’s recent performance, (ii) market conditions and Crown’s view of the impact of Revance entering into the Sixth Amendment and ANZ Distribution Agreement and (iii) Crown’s unwillingness to commence the tender offer to the Original Merger Agreement given Crown’s view of the change in value of Revance.
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Potentially Interested Counterparties. The Revance Board considered, with the assistance of Revance management and advisors, the low likelihood that other strategic counterparties would engage with Revance on the same or a similar timeframe as Crown and on contractual terms and conditions superior to those contained in the A&R Merger Agreement. Following entry into the Original Merger Agreement, the Revance Board considered the fact that additional outreach to strategic counterparties would have violated the terms of the Original Merger Agreement and could therefore jeopardize a potential transaction with Crown and result in risks of leak and disruption to the existing process or to Revance’s employees and business and that, in the event a third-party became interested in pursuing a transaction on terms more favorable to Revance and its stockholders than those contemplated by the A&R Merger Agreement, the Revance Board would be able to respond to such a proposal due to the A&R Merger Agreement’s customary “fiduciary out” provisions. Under those provisions, Revance has the ability to terminate the A&R Merger Agreement and accept and enter into a definitive A&R Merger Agreement with respect to an unsolicited Superior Proposal (as defined in the A&R Merger Agreement) provided that Revance pays the termination fee to Crown. The Revance Board also considered the fact that any “don’t ask don’t waive” provision contained in Revance’s confidentiality agreements with other potentially interested parties would cease to be effective upon the execution of the A&R Merger Agreement and the announcement of the Transactions.
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Strategic Alternatives. The Revance Board, with the assistance of Revance management and advisors, engaged in a comprehensive evaluation of strategic alternatives, including acquisitions of Revance or components of its business, additional capital raising, a merger, partnerships, collaborations and equity investments. During this process, Revance has engaged with over a dozen third parties across strategics and financial sponsors to determine interests in pursuing a transaction. As of August 11, 2024, Crown was the only party to submit a proposal in connection with a strategic transaction. As of the date hereof, Revance has not received any offer or proposal that constitutes a Superior Proposal or could reasonably be expected to lead to a Superior Proposal under the Original Merger Agreement.
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Certain Management Projections. The Revance Board considered certain forecasts for Revance prepared by members of senior management, which reflected an application of various assumptions and scenarios of Revance’s management. The November Projections reflected Revance operating as a stand-alone business, in the absence of a deal with Crown, and incorporated management’s latest view of the market. These projections were provided to the Revance Board in connection with its consideration of the Offer and the Merger and to Centerview in connection with rendering their fairness opinions to the Revance Board. For further discussion, see “—Certain Financial Projections.”
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Centerview’s Fairness Opinion and Related Analysis. The Revance Board considered the opinion of Centerview rendered to the Revance Board on December 7, 2024, which was subsequently confirmed by delivery of a written opinion dated such date that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the
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review undertaken by Centerview in preparing its opinion, the Merger Consideration to be paid to the holders of Shares (other than as specified in such opinion) pursuant to the A&R Merger Agreement was fair, from a financial point of view, to such holders, as more fully described below ”
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