Business Context and Reporting Period
This Form 8-K filing by Houlihan Lokey, Inc. (HLI) reports a significant corporate event dated July 29, 2019, with the transaction closing on August 1, 2019. The filing details an underwritten public offering of the company's Class A common stock conducted by an affiliate of ORIX Corporation USA.
Key Financial Metrics and Transaction Details
- Shares Sold: 3,377,935 shares of Class A common stock.
- Proceeds: The offering generated net proceeds of approximately $154.1 million for ORIX before expenses.
- Company Proceeds: The Company did not receive any proceeds from this sale.
- Ownership Change: Following the offering, ORIX no longer beneficially owns any shares of Class A or Class B common stock of the Company.
Material Changes and Corporate Actions
The primary material change is the complete divestiture of ORIX's equity stake in Houlihan Lokey, Inc. Consequently, the following agreements have terminated in accordance with their terms:
- The Stockholders' Agreement dated August 18, 2015.
- The Registration Rights Agreement dated August 18, 2015.
Additionally, the Company entered into an Underwriting Agreement with J.P. Morgan Securities LLC. This agreement includes a 60-day lock-up provision preventing the Company from selling or transferring Class A Common Stock or related securities without the Underwriter's written consent.
Outlook, Risks, and Management Commentary
Management noted that the one remaining ORIX nominee on the Company's board of directors will not be required to resign immediately following the offering. The Company and the HL Voting Trust have waived this requirement until the board identifies a replacement or determines otherwise. The filing includes standard forward-looking statement disclaimers regarding risks and uncertainties that could affect future results.
Key Facts for Investor Verification
- Verify that the Company received zero proceeds from the $154.1 million transaction, as funds went entirely to the selling shareholder (ORIX).
- Confirm the termination of the Stockholders' and Registration Rights Agreements and the implications for future governance.
- Monitor the 60-day lock-up period ending approximately September 27, 2019, during which the Company is restricted from selling additional shares.
- Track the timeline for the replacement of the remaining ORIX nominee on the board of directors.