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. The filing also details support agreements with major SunGard stockholders and a financing commitment letter.
Key Financial Metrics and Transaction Terms
- Total 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 all of SunGard's outstanding debt, totaling approximately $4.6 billion 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: Support and Standstill Agreements were signed with Sponsor Stockholders representing approximately 84% of the outstanding SunGard and SCCII shares.
Material Changes and Transaction Structure
The filing announces a material change in FIS's corporate structure through the acquisition of SunGard. The transaction structure involves multiple merger steps: Merger Sub 1 merges with SunGard; the surviving entity merges into Merger Sub 2; Merger Sub 3 merges with SCCII; and the surviving entity merges into the Follow-On 1 Surviving Company. Outstanding unvested options and appreciation units of SunGard and SCCII will fully vest immediately prior to closing, while vested equity awards will be converted into merger consideration. Unvested RSUs will convert into FIS RSUs.
Guidance, Risks, and Closing Conditions
The consummation of the Mergers is subject to customary closing conditions, including:
- Requisite approval by SunGard and SCCII stockholders.
- Receipt of regulatory approvals and expiration of waiting periods under antitrust laws (e.g., Hart-Scott Rodino Act).
- Effectiveness of the Form S-4 registration statement filed with the SEC.
- Listing approval of FIS common stock on the New York Stock Exchange.
Risks and Contingencies: The agreement includes termination rights if the merger is not consummated by June 30, 2016, or if a governmental authority prohibits the transaction. Forward-looking statements in the filing highlight risks regarding the failure to achieve anticipated synergies, regulatory hurdles, market conditions, and cybersecurity threats.
Investor Verification Checklist
- Verify the final approval status of the merger by SunGard and SCCII stockholders.
- Monitor the effectiveness of the Form S-4 registration statement and the Form S-4 consent solicitation/prospectus.
- Track regulatory approval status, specifically regarding antitrust reviews under the Hart-Scott Rodino Act.
- Confirm the final terms of the $6.9 billion bridge facility and the refinancing of SunGard's $4.6 billion debt.
- Review the final number of FIS shares to be issued, as the 44,663,899 figure is subject to adjustments for unvested RSUs.