BILL Holdings, Inc. Form 8-K Summary
Business Context and Reporting Period
BILL Holdings, Inc. filed a Current Report on Form 8-K regarding a material definitive agreement entered into on July 16, 2021. The transaction involves the acquisition of Invoice2go, Inc., a Delaware corporation, through a two-step merger. A joint announcement was issued on July 19, 2021.
Transaction Terms and Key Financial Metrics
- Aggregate consideration: Approximately $625 million, subject to customary purchase price adjustments.
- Cash consideration: Approximately 25% of the purchase price, subject to adjustments.
- Share consideration: The remainder payable through BILL common stock, options and restricted stock units. The number of shares will be based on BILL’s average daily volume-weighted average sales price over the 20 consecutive trading days ending on the third trading day before closing.
- Employee awards: BILL will grant $30.0 million of restricted stock units under its 2019 Equity Incentive Plan to certain continuing Invoice2go employees.
- Escrow: BILL will deposit $62.5 million of the cash consideration into an escrow account for 18 months to partially secure indemnification obligations.
- The filing does not provide revenue, profit, cash flow, operating margin, debt, liquidity or other operating-performance metrics for BILL or Invoice2go.
Material Changes Versus the Prior Comparable Period
The filing does not report period-over-period operating or financial results. The material development is BILL’s agreement to acquire Invoice2go for approximately $625 million, funded primarily with BILL equity and approximately 25% cash.
Conditions, Outlook and Risks
- Closing is subject to customary conditions, including Invoice2go stockholder approval, expiration or termination of the applicable Hart-Scott-Rodino waiting period, accuracy of representations and warranties, covenant compliance and the absence of a material adverse effect.
- BILL’s obligations also depend on stockholders holding at least 95% of Invoice2go’s outstanding shares executing joinder agreements, continued effectiveness of specified key-employee agreements and retention of 90% of Invoice2go employees offered continued employment.
- The transaction was expected to close by November 12, 2021, with a possible extension to January 12, 2022 by mutual agreement if only the HSR waiting-period condition remained outstanding.
- The agreement could be terminated by mutual consent, failure to close by the applicable deadline, uncured material breach or failure of Invoice2go stockholders to approve the transaction within 24 hours after signing.
- Invoice2go equityholders and warrantholders agreed to indemnify BILL for specified matters, including breaches, purchase-price calculation inaccuracies, litigation, equityholder claims, pre-closing taxes and certain fraud claims.
- Key risks include failure to obtain approvals, regulatory delays or conditions, failure to satisfy closing conditions, transaction costs and liabilities, employee and customer retention issues, litigation, integration challenges, failure to realize anticipated benefits and competitive pressures. The filing specifically notes the challenge of integrating Invoice2go alongside recently acquired DivvyPay, Inc.
Important Facts for Investors to Verify
- Whether Invoice2go stockholder approval and the required 95% joinder threshold were obtained.
- Whether HSR and other regulatory conditions were satisfied and when the transaction closed.
- The final purchase price, cash-versus-equity mix and number of BILL shares and awards issued after adjustments.
- The effect of the acquisition, including purchase accounting, goodwill, intangible assets, transaction costs and any resulting dilution.
- Whether the $62.5 million escrow was released or used for indemnification claims.
- Subsequent filings containing the definitive Merger Agreement, resale registration statement and financial statements or pro forma information for Invoice2go.