Business Context and Reporting Period
This Form 8-K, dated June 3, 2013, reports that Salesforce, Inc. entered into a definitive agreement to acquire ExactTarget, Inc. The transaction involves a cash tender offer followed by a merger, with completion expected in Salesforce's second fiscal quarter of 2014 (ending July 31, 2013).
Key Financial Metrics and Transaction Terms
- Offer Price: $33.75 per share in cash, net to the seller.
- Financing: Bank of America, N.A. has committed to a $300.0 million term loan to fund the offer price and related fees.
- Termination Fee: ExactTarget is required to pay Salesforce $78.24 million if the agreement is terminated under specified circumstances.
- Support Agreements: Stockholders holding approximately 20% of ExactTarget's outstanding shares have agreed to tender their shares and vote in favor of the merger.
Material Changes and Transaction Structure
The filing details a two-step acquisition process. First, a wholly owned subsidiary of Salesforce (Merger Sub) will commence a cash tender offer to purchase all outstanding ExactTarget shares. Second, following the offer, Merger Sub will merge with ExactTarget. If the tender offer results in ownership exceeding 90% of outstanding shares, a "short form" merger will be executed. Otherwise, a stockholder vote will be required, which Salesforce guarantees to win due to its voting control.
Guidance, Risks, and Contingencies
The transaction is subject to customary conditions, including the valid tender of more than 50% of outstanding shares and the expiration of the Hart-Scott-Rodino Antitrust waiting period. Key risks identified include:
- Failure to satisfy closing conditions or obtain governmental approvals.
- Uncertainty regarding the number of shares tendered by ExactTarget stockholders.
- Potential material adverse changes to ExactTarget's business.
- Challenges in integrating ExactTarget's business and achieving expected financial results.
The filing contains forward-looking statements regarding the timing and benefits of the transaction, which are subject to significant uncertainties.
Investor Verification Checklist
- Verify the final tender offer materials (Schedule TO) and ExactTarget's recommendation statement (Schedule 14D-9) once filed with the SEC.
- Confirm the actual number of shares tendered to ensure the >50% condition is met.
- Monitor regulatory approval status under the Hart-Scott-Rodino Act.
- Review the final terms of the $300 million term loan, including covenants and interest rates, once finalized.
- Assess the impact of the $78.24 million termination fee contingency on ExactTarget's balance sheet if the deal fails.