Each Supplemental Indenture provides, among other things, that, from and after the Notes Effective Date (as defined below), (a) the right of holders of the Notes to convert each $1,000 principal amount of such Notes into shares of Former TechTarget common stock shall be changed into a right to convert such principal amount of such Notes into the Reference Property (as defined below) and (b) New TechTarget shall, as the successor company to Former TechTarget, succeed to the obligations of Former TechTarget under the Indentures and the Notes as provided in the applicable Supplemental Indenture. Reference Property in the context of the Transactions is defined in each Supplemental Indenture as one share of New TechTarget common stock and $11.6955 in cash.
The consummation of the Transactions constitutes a Fundamental Change, a Make-Whole Fundamental Change and a Specified Corporate Event (each as defined in the applicable Indenture) under each of the Indentures. The effective date of the Fundamental Change, Make-Whole Fundamental Change and Specified Corporate Event in respect of each series of Notes is December 2, 2024 (the “Notes Effective Date”).
As a result of the Fundamental Change, each holder of Notes will have the right to require the Company to repurchase its Notes, pursuant to the terms and procedures set forth in the applicable Indenture, for a cash repurchase price equal to the Fundamental Change Repurchase Price (as defined in the applicable Indenture). In addition, as a result of the Fundamental Change, Make-Whole Fundamental Change and Specified Corporate Event, holders of the Notes will, subject to the terms of the Indentures, have a right to convert their Notes into Reference Property commencing on the Notes Effective Date and ending at the close of business on the business day immediately preceding the related Fundamental Change Repurchase Date (as defined in the applicable Indenture).
The foregoing description of the Supplemental Indentures does not purport to be complete and is qualified in its entirety by reference to the full text of the applicable Supplemental Indenture, copies of which are attached hereto as Exhibit 4.1 and Exhibit 4.2 and are incorporated herein by reference.
Credit Facility
On December 2, 2024, New TechTarget, as borrower, and Former TechTarget, as guarantor, entered into a $250 million unsecured five-year revolving credit facility (the “Credit Facility”) with Informa Group Holdings Limited, an affiliate of Informa, as administrative agent (the “Administrative Agent”), and the lenders from time to time party thereto (such agreement, the “Credit Agreement”).
The Credit Facility expires on December 2, 2029 (the “Maturity Date”) and is guaranteed by New TechTarget’s existing and future material wholly-owned domestic subsidiaries, subject to customary exceptions. The Credit Facility also contains an expansion option permitting New TechTarget to request incremental commitments of up to the greater of (A) $125 million and (B) 100.0% of Consolidated EBITDA (as defined in the Credit Agreement) of the trailing four fiscal quarters plus an unlimited amount, so long as the Consolidated Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 2.50:1.00, from lenders that elect to make such incremental commitments available, upon the satisfaction of certain conditions.
Borrowings under the Credit Facility bear interest at New TechTarget’s option as follows: (1) SOFR Loans (as defined in the Credit Agreement) bear interest at a variable rate equal to the Term SOFR (as defined in the Credit Agreement) plus a margin of between 2.50% and 3.00% per annum, depending on New TechTarget’s Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) plus a 0.10% credit spread adjustment; and (2) ABR Loans (as defined in the Credit Agreement) bear interest at a variable rate equal to the highest of (a) the Federal funds rate (as published by the Federal Reserve Bank of New York from time to time) plus 1/2 of 1.0%, (b) the “prime rate” appearing in the “Money Rates” section of The Wall Street Journal and (c) the Daily SOFR Rate (as defined in the Credit Agreement) plus 1.00%, plus in each case a margin of between 1.50% and 2.00% per annum, depending on New TechTarget’s Consolidated Total Net Leverage Ratio. In no event will SOFR Loans or ABR Loans bear interest at a rate lower than 0.0%. New TechTarget is required to pay to the Administrative Agent on the Closing Date a funding fee equal to 0.75% of the aggregate principal amount of the commitments under the Credit Facility. In addition, New TechTarget is required to pay a commitment fee of between 0.30% and 0.50% per annum (depending on New TechTarget’s Consolidated Total Net Leverage Ratio) based on the average daily unused amount of commitments under the Credit Facility.
The Credit Facility requires New TechTarget to maintain (i) a Consolidated Total Net Leverage Ratio of 3.00 to 1.00 or less; provided, that the maximum Consolidated Total Net Leverage Ratio will, at New TechTarget’s election, be increased to 3.50 to 1.00 for the four consecutive fiscal quarters following the consummation of any Permitted Acquisition (as defined in the Credit Agreement) by New TechTarget in which the aggregate cash consideration exceeds $150 million and (ii) a Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of at least 3.00 to 1.00. The Consolidated Total Net Leverage Ratio and Consolidated Interest Coverage Ratio will be tested beginning with the first full fiscal quarter ending after the completion of the Transactions.
Borrowings under the Credit Facility are prepayable at New TechTarget’s option in whole or in part without premium or penalty. Amounts borrowed under Credit Facility may be repaid and reborrowed from time to time prior to the Maturity Date. There is no scheduled amortization under the Credit Facility.
New TechTarget’s obligations under the Credit Facility are unsecured. The Credit Agreement contains customary representations, warranties, conditions precedent, events of default, indemnities and affirmative and negative covenants, including covenants that, among other things, restrict the ability of New TechTarget and certain of its subsidiaries to: incur liens; incur indebtedness; make investments; sell or otherwise dispose of New TechTarget’s or certain of its subsidiaries’ assets; enter into certain mergers or consolidations; enter into sale and lease back transactions; and use proceeds of borrowings under the Credit Facility for other than permitted purposes. These covenants are subject to a number of important exceptions and qualifications. Certain changes of control with respect to New TechTarget would constitute an event of default under the Credit Facility; provided, that the Transactions shall not constitute a change of control. Upon the occurrence and during the continuance of an event of default, the lenders may terminate any unfunded commitments and declare the outstanding advances and all other obligations under the Credit Facility immediately due and payable.
The foregoing summary is qualified in its entirety by reference to the full text of the Credit Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.01 |
Completion of Acquisition or Disposition of Assets |
The disclosures under the Introductory Note and Item 3.01 of this Current Report on Form 8-K are incorporated herein by reference.
Item 2.04. |
Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement. |
The disclosures under Item 1.01 of this Current Report on Form 8-K under the caption “Supplemental Indentures” are incorporated herein by reference.
Item 3.01 |
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
On December 2, 2024, Former TechTarget (i) notified the Nasdaq Global Market (“Nasdaq”) of the consummation of the Transactions and (ii) requested that Nasdaq (a) suspend trading of shares of Former TechTarget common stock effective as of prior to the open of the trading day on December 3, 2024, and (b) file with the SEC a Form 25 Notification of Removal from Listing and/or Registration to delist and deregister all shares of Former TechTarget common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, shares of Former TechTarget common stock will no longer be listed on Nasdaq. Former TechTarget intends to file with the SEC a certification on Form 15 under the Exchange Act, requesting the suspension of Former TechTarget’s reporting obligations under Sections 13 and 15(d) of the Exchange Act after the Form 25 becomes effective.