Business Context and Reporting Period
This Form 8-K, dated August 12, 2015, reports that Fidelity National Information Services, Inc. (FIS) entered into a definitive Merger Agreement to acquire SunGard, a Delaware corporation, and SunGard Capital Corp. II (SCCII). The transaction involves a series of mergers resulting in SunGard becoming a wholly-owned subsidiary of FIS.
Key Financial Metrics and Transaction Terms
- Consideration: SunGard and SCCII shareholders will receive an aggregate of 44,663,899 shares of FIS common stock and $2,288,700,000 in cash.
- Debt Assumption: FIS will assume, repay, or refinance approximately $4.6 billion of SunGard's outstanding debt as of June 30, 2015.
- Financing: FIS secured a $6.9 billion bridge facility commitment from Bank of America and Wells Fargo Bank, including a $4.3 billion backstop facility.
- Stockholder Support: Sponsor Stockholders holding approximately 84% of SunGard and SCCII voting stock have entered into Support and Standstill Agreements to vote in favor of the merger.
Material Changes and Deal Structure
The filing details a complex multi-step merger structure involving three merger subsidiaries of FIS. Upon consummation, outstanding SunGard Class A common stock and SCCII common stock will be cancelled with no consideration. Class L common stock and SCCII preferred stock will be converted into the mixed stock and cash consideration. Unvested equity awards will generally convert into FIS RSUs, while vested awards will be cashed out or converted based on the merger consideration value.
Guidance, Risks, and Conditions
Closing Conditions: The transaction is subject to customary conditions, including stockholder approval of SunGard and SCCII, regulatory approvals (including antitrust), effectiveness of the Form S-4 registration statement, and NYSE listing approval.
Termination Rights: Either party may terminate if the merger is not consummated by June 30, 2016, or if a governmental authority prohibits the deal. FIS may terminate if stockholder approval is not obtained within 25 business days of the Form S-4 effectiveness or if SunGard materially breaches representations.
Risks: Forward-looking statements highlight risks regarding the failure to complete the transaction, inability to achieve anticipated synergies, regulatory hurdles, and general economic or market conditions.
Investor Verification Checklist
- Verify the final approval status of the Form S-4 registration statement by the SEC.
- Confirm receipt of all necessary regulatory and antitrust approvals.
- Monitor the outcome of the SunGard and SCCII stockholder votes.
- Review the final terms of the $6.9 billion bridge facility and any permanent financing arrangements.
- Assess the impact of assuming $4.6 billion in debt on FIS's leverage ratios and liquidity.