Item 2.01 Completion of Acquisition or Disposition of Assets.
Completion of the Merger
On the Closing Date, FLOW completed its previously announced Merger with Parent and Merger Sub. As provided in the Merger Agreement, Merger Sub was merged with and into FLOW, with FLOW surviving the Merger as a wholly owned subsidiary of Parent.
As a result of the Merger, each share of common stock, par value $0.01 per share, of the Company (the “Company Common Stock”), issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than shares of Company Common Stock held by the Company as treasury shares, owned by Parent or Merger Sub and shares owned by stockholders of the Company who have properly demanded and perfected appraisal rights in compliance with Delaware law prior to the Effective Time) was automatically canceled and converted into the right to receive cash in an amount equal to $86.50 per share, without interest (the “Per Share Price”).
At the Effective Time, each outstanding option to purchase a share of Company Common Stock (an “Option”), whether vested or unvested, was cancelled and converted into the right to receive an amount in cash, without interest and less applicable taxes, equal to (1) the excess, if any, of the Per Share Price (less the exercise price per share attributable to such Option) multiplied by (2) the total number of shares of Company Common Stock issuable upon exercise in full of such Option.
At the Effective Time, each outstanding share of restricted stock (a “Restricted Share”), was fully vested, cancelled and converted into a right to receive an amount in cash, without interest and less applicable taxes, equal to (1) the total number of shares of Company Common Stock subject to such Restricted Share multiplied by (2) the Per Share Price.
At the Effective Time, each outstanding restricted stock unit (“Restricted Stock Unit”), whether vested or unvested, was canceled and converted into the right to receive an amount in cash, without interest and less applicable taxes, equal to (1) the total number of shares of Company Common Stock subject to such Restricted Stock Unit prior to the Effective Time multiplied by (2) the Per Share Price.
At the Effective Time, each outstanding performance-based restricted stock unit (a “PSU”) immediately prior to the Effective Time, to the extent unvested, vested in accordance with the following provisions: (i) if the applicable performance period had not been completed, the PSU vested at the target level of performance (or, with respect to the PSUs that vested on the basis of the Company’s operating income margin, at 325% of the target level of performance and with respect to the PSUs that vested on the basis of the Company’s total shareholder return and were issued in 2020 or 2021, at 200% of the target level of performance) and (ii) if the applicable performance period had been completed, the PSU vested at the actual level of performance, as determined in accordance with the terms of each outstanding award agreement. All such vested PSUs were canceled and converted into the right to receive an amount in cash, without interest and less applicable taxes, equal to (1) the total number of shares of Company Common Stock subject to such vested PSU prior to the Effective Time multiplied by (2) the Per Share Price.
The foregoing summary description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the terms of the Merger Agreement, a copy of which was filed as Exhibit 2.1 to FLOW’s Current Report on Form 8-K filed by FLOW with the U.S. Securities and Exchange Commission (the “Commission”) on December 15, 2021, and as described in the definitive proxy statement filed by FLOW with the Commission on February 1, 2022, the terms of which are incorporated herein by reference.
The total amount of funds required to complete the Merger and related transactions and to pay related fees and expenses was approximately $4.1 billion, which was funded through a combination of cash on hand, equity contributions from funds associated with Lone Star, as well as proceeds from debt financing.