Business Context and Reporting Period
This Form 8-K, filed on June 3, 2009, by NetApp, Inc., reports the entry into a material definitive agreement. The filing details Amendment No. 1 to the Agreement and Plan of Merger originally dated May 20, 2009, between NetApp, Inc. and Data Domain, Inc.
Key Financial Metrics and Transaction Terms
The filing does not provide NetApp's standalone revenue, profit, cash flow, or debt metrics. The primary financial data relates to the amended acquisition terms for Data Domain:
- Aggregate Merger Consideration: Increased from $25 per share to $30 per share.
- Cash Consideration: Fixed at $16.45 per share of Data Domain common stock.
- Stock Consideration: Variable based on NetApp's "Closing Average" stock price, ranging from 0.6370 to 0.7783 shares of NetApp stock per Data Domain share.
- Stock Issuance Cap: NetApp stock issued in the merger is capped at 19.5% of NetApp's outstanding shares immediately prior to closing. Any excess stock consideration is converted to cash.
Material Changes Versus Prior Period
The material change reported is the increase in the total consideration offered to Data Domain stockholders. The aggregate price per share was raised by $5.00, from $25.00 to $30.00, effective June 3, 2009. All other terms of the original Merger Agreement remain in full force and effect.
Guidance, Outlook, and Risks
Management Commentary and Outlook: NetApp and Data Domain issued joint press releases announcing the amendment. The company plans to file a Registration Statement on Form S-4 and a Proxy Statement/Prospectus containing further details.
Risks and Contingencies:
- Tax Status: The filing explicitly states that the parties can make no assurances that the transaction will qualify as a tax-free reorganization under the Internal Revenue Code.
- Regulatory Approval: The transaction is subject to the approval of Data Domain stockholders and the filing of necessary SEC documents.
- Variable Consideration: The final mix of cash and stock depends on NetApp's stock price performance in the days immediately preceding the merger closing.
Important Facts for Investor Verification
- Verify the final "Closing Average" of NetApp stock to determine the exact stock-to-cash ratio at closing.
- Confirm whether the transaction ultimately qualifies as a tax-free reorganization.
- Review the upcoming Form S-4 and Proxy Statement/Prospectus for detailed financial impacts and pro forma data.
- Monitor the 19.5% stock issuance cap to assess potential dilution or increased cash outflow if the cap is triggered.