Business Context and Reporting Period
Company: Diebold, Incorporated (Diebold)
Filing Date: November 23, 2015
Event: Entry into a Material Definitive Agreement (Business Combination Agreement) with Wincor Nixdorf Aktiengesellschaft (Wincor Nixdorf).
Diebold intends to form a combined enterprise with Wincor Nixdorf through a voluntary public takeover offer (Exchange Offer) for 100% of Wincor Nixdorf's outstanding ordinary shares. The agreement was unanimously approved by the boards of both companies.
Key Financial Metrics and Transaction Terms
This filing details the terms of the proposed acquisition rather than historical financial performance. Key transaction metrics include:
- Consideration per Share: €38.98 in cash plus 0.434 new common shares of Diebold per Wincor Nixdorf ordinary share.
- Equity Issuance: Diebold will issue common shares up to 19.91% of its total outstanding common shares at the time of entry and issuance.
- Minimum Tender Requirement: Diebold must receive at least 67.6% of all issued Wincor Nixdorf ordinary shares (including shares already held or subject to transfer rights) to consummate the offer.
- Reverse Termination Fees:
- €20 million: Failure to obtain SEC effectiveness of Form S-4 by the end of the acceptance period (unless caused by Wincor Nixdorf or required modifications).
- €30 million: Failure of the market material adverse change condition.
- €50 million: Failure to receive all antitrust approvals by November 21, 2016.
Note: The filing text does not provide specific values for Diebold's current revenue, profit, cash flow, margins, debt, or liquidity.
Material Changes and Closing Conditions
The consummation of the Business Combination is subject to customary closing conditions, including:
- Receipt of all antitrust approvals on or before November 21, 2016.
- Authorization for listing Diebold common shares on the New York Stock Exchange and the Frankfurt Stock Exchange.
- Declaration of effectiveness of the registration statement on Form S-4 with no stop orders in effect.
- Absence of legal restraints preventing the completion of the Exchange Offer.
- Absence of a material adverse change for either party or a violation of law (e.g., bribery, corruption, antitrust).
- Absence of a competing superior proposal.
Guidance, Outlook, and Risks
Management Commentary and Governance: Following the closing, Diebold will appoint Wincor Nixdorf's CEO, Eckard Heidloff, and two supervisory board members (Drs. Alexander Dibelius and Dieter Düsedau) to its board of directors. Mr. Heidloff will also be appointed as Diebold's president upon election.
Risks and Contingencies: The filing highlights significant risks, including the uncertainty of regulatory approvals, the ability to successfully integrate the businesses, potential disruption to management time, and the risk of termination if conditions are not met. The agreement may be terminated if the Exchange Offer is not consummated by November 21, 2016, or if material obligations are violated and not cured within five business days.
Forward-Looking Statements: The document contains forward-looking statements regarding synergies, pro forma revenue, targeted operating margins, and accretion to earnings. These are based on current expectations and involve risks that may cause actual results to differ materially.
Investor Verification Checklist
- Verify the status of antitrust approvals required by November 21, 2016.
- Confirm the effectiveness of the Form S-4 registration statement for the Diebold shares to be issued.
- Monitor the percentage of Wincor Nixdorf shares tendered to ensure the 67.6% minimum threshold is met.
- Review the full Business Combination Agreement (Exhibit 2.1) for detailed covenants and termination rights.
- Assess the potential impact of the reverse termination fees (up to €50 million) on Diebold's liquidity if the deal fails.
- Check for any material adverse changes in the business operations of either party during the interim period.