Item 2.01 |
Completion of Acquisition or Disposition of Assets. |
On January 12, 2023 (the “Effective Date”), Semtech Corporation, a Delaware corporation (“Semtech”), completed the previously announced acquisition of Sierra Wireless, Inc., a corporation existing under the Canada Business Corporations Act (“Sierra Wireless”), pursuant to the Arrangement Agreement, dated as of August 2, 2022 (the “Arrangement Agreement”), by and among Semtech, 13548597 Canada Inc., a corporation formed under the Canada Business Corporations Act, and a wholly-owned subsidiary of Semtech (the “Purchaser”), and Sierra Wireless. Pursuant to terms and conditions of the Arrangement Agreement, Purchaser, among other things, acquired all of the issued and outstanding common shares of Sierra Wireless (the “Arrangement”). The Arrangement was implemented by way of a plan of arrangement (the “Plan of Arrangement”) in accordance with the Canada Business Corporations Act.
Arrangement Consideration
Pursuant to the Arrangement Agreement and Plan of Arrangement, at the effective time of the Arrangement (the “Effective Time”), each common share of Sierra Wireless that was issued and outstanding immediately prior to the Effective Time was transferred to the Purchaser in consideration for the right to receive US$31.00 per share of Sierra Wireless’ common shares (“Per Share Consideration”), in an all-cash transaction representing a total enterprise value of approximately US$1.2 billion. The cash consideration was funded with a combination of cash on hand and borrowings under Semtech’s New Term Loan Facility (defined below).
Treatment of Sierra Wireless’ Incentive Securities
At the Effective Time, (i) each option to purchase common shares of Sierra Wireless (“Option”) that was outstanding immediately prior to the Effective Time (whether vested or unvested) was deemed to have vested and was deemed to be assigned and surrendered by the holder of such Option to Sierra Wireless in exchange for, in respect of each Option for which the Per Share Consideration exceeds the applicable exercise price, an amount in cash from Sierra Wireless equal to the Per Share Consideration less the applicable exercise price in respect of such Option, less any applicable withholdings, and (ii) (A) each restricted stock unit and phantom restricted stock unit (“RSU”) outstanding immediately prior to the Effective Time (whether vested or unvested) was deemed to have vested; and (B) each performance stock unit (“PSU” and together with the Options and RSUs, the “Incentive Securities”) outstanding immediately prior to the Effective Time (whether vested or unvested) was deemed to have vested at the applicable vesting percentage and, in each case, transferred by the holder of such RSU or PSU to Sierra Wireless in exchange for an amount in cash equal to the Per Share Consideration with such amounts to be paid to the applicable holders net of any applicable withholdings and each such RSU and PSU was immediately cancelled.
The foregoing summary of the Arrangement Agreement and the transactions contemplated thereby does not purport to be a complete description of all the parties’ rights and obligations under the Arrangement Agreement and is qualified in its entirety by reference to the full text of the Arrangement Agreement, a copy of which was filed as Exhibit 2.1 to Semtech’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 3, 2022 (the “August 8-K”) and is incorporated herein by reference.
The Arrangement Agreement filed as Exhibit 2.1 to the August 8-K, is intended to provide investors and stockholders with information regarding the terms of the Arrangement. It is not intended to provide any other factual information about Semtech or Sierra Wireless. The representations, warranties, covenants and agreements contained in the Arrangement Agreement, which were made only for purposes of that agreement and as of specific dates, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Arrangement Agreement instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and stockholders. Moreover, information concerning the subject matter of the representations and warranties may have changed after the date of the Arrangement Agreement, which subsequent information may or may not have been fully reflected in Semtech’s or Sierra Wireless’ public