Business Context and Reporting Period
This Form 8-K, dated February 2, 2015, reports that SS&C Technologies Holdings, Inc. ("SS&C") entered into a definitive Merger Agreement to acquire Advent Software, Inc. ("Advent"). The transaction involves a merger of a wholly-owned SS&C subsidiary with Advent, resulting in Advent becoming a wholly-owned subsidiary of SS&C.
Key Financial Metrics and Transaction Terms
- Merger Consideration: $44.25 in cash per outstanding share of Advent common stock.
- Equity Treatment: Vested equity awards convert to cash; unvested awards convert to SS&C stock awards based on an exchange ratio.
- Financing Structure: SS&C intends to fund the transaction using cash on hand and new debt/equity facilities totaling approximately $3.53 billion in committed capacity:
- Senior Secured Credit Facilities: $2.63 billion aggregate principal (including $2.08 billion Term Loan B-1, $400 million Term Loan B-2, and $150 million Revolving Credit Facility).
- Senior Unsecured Notes: Up to $500 million (with a bridge loan facility available if issuance is less).
- Equity Securities: Up to $400 million gross proceeds (with a bridge loan facility available if issuance is less).
- Termination Fee: $80 million payable by Advent to SS&C if Advent terminates the agreement to accept a superior proposal.
- Expense Reimbursement: Up to $12.5 million for out-of-pocket fees and expenses if the agreement is terminated under certain circumstances.
Material Changes and Conditions
The filing does not report historical financial performance changes for SS&C or Advent but details the material change in corporate structure pending the Merger. Key conditions precedent to closing include:
- Approval by holders of a majority of outstanding Advent stock.
- Expiration or termination of the Hart-Scott-Rodino waiting period.
- No legal restraints prohibiting the consummation of the Merger.
- No "Company Material Adverse Effect" experienced by Advent since the agreement date.
- Performance of obligations by both parties.
Notably, closing is not subject to a vote of SS&C stockholders nor conditioned on the receipt of financing, though financing commitments are in place.
Management Commentary, Risks, and Contingencies
Voting Support: SS&C secured a Voting Agreement with Stephanie DiMarco and related trusts, holders of approximately 2,867,887 shares of Advent stock, to vote in favor of the Merger.
Risks and Uncertainties: The filing includes a cautionary statement regarding forward-looking statements. Risks include the inability to obtain financing, failure to satisfy regulatory approvals, integration challenges, and general economic conditions. The transaction is subject to customary termination rights.
Unusual Items: The agreement includes a "fiduciary out" provision allowing Advent to terminate the agreement to accept a superior proposal, subject to a $80 million termination fee and a three-business day notice period for SS&C to match the offer.
Investor Verification Checklist
- Verify the final approval status of the Merger by Advent stockholders.
- Confirm the successful closing of the $2.63 billion Senior Secured Credit Facilities and the $500 million Notes issuance.
- Monitor regulatory approvals, specifically the expiration of the Hart-Scott-Rodino waiting period.
- Review the definitive Proxy Statement/Prospectus for detailed financial projections and synergy estimates not included in this 8-K.
- Assess the impact of the $80 million termination fee contingency on the deal's stability.