Item 1.01.
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Entry into a Material Definitive Agreement.
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On December 11, 2020, Pluralsight, Inc., a Delaware corporation (“Pluralsight” or the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Pluralsight Holdings, LLC, a Delaware limited liability company and subsidiary of the Company (“Pluralsight Holdings” and, together with Pluralsight, the “Pluralsight Parties”), Lake Holdings, LP, a Delaware limited partnership (“Parent I”), Lake Guarantor, LLC, a Delaware limited liability company (“Parent II” and together with Parent I, the “Parent Entities”), Lake Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of Parent I (“Merger Sub I”) and Lake Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of Parent II (“Merger Sub II” and together with Merger Sub I, the “Merger Subs” and, together with the Parent Entities, the “Buyer Parties”), providing for the merger of Merger Sub II with and into Pluralsight Holdings (the “Holdings Merger”), with Pluralsight Holdings continuing as the surviving entity in the Holdings Merger. The Merger Agreement also provides for the merger of Merger Sub I with and into the Company (the “Company Merger” and, together with the Holdings Merger, the “Mergers”), with Pluralsight continuing as the surviving corporation in the Company Merger. The Parent Entities and the Merger Subs are affiliates of Vista Equity Partners Fund VII, L.P., a Cayman Islands exempted limited partnership (“Vista Fund VII”). Capitalized terms used herein but not otherwise defined have the meaning set forth in the Merger Agreement.
The Transaction Committee (the “Transaction Committee”) of the Pluralsight board of directors (the “Pluralsight Board”) unanimously approved the Merger Agreement and recommended that the Pluralsight Board adopt and approve the Merger Agreement, and thereafter the Pluralsight Board unanimously adopted and approved the Merger Agreement and resolved to recommend that the Company’s stockholders vote to adopt and approve the Merger Agreement and the Company Merger. Both the Transaction Committee and the Pluralsight Board determined that the transactions contemplated by the Merger Agreement, including the Company Merger, are fair to, and in the best interests of, the Company and its stockholders.
At the effective times of the Mergers:
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(i)
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each share of class A common stock of Pluralsight (the “Company Common Stock”) outstanding as of immediately prior to the effective times of the Mergers (except as otherwise provided in the Merger Agreement) will be cancelled and automatically converted into the right to receive cash in an amount equal to $20.26, without interest; and
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(ii)
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each common unit of Pluralsight Holdings (the “Holdings Units”) outstanding as of immediately prior to the effective times of the Mergers (except as otherwise provided in the Merger Agreement) will be cancelled and automatically converted into the right to receive cash in an amount equal to $20.26, without interest.
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In addition, at the effective times of the Mergers, each share of class B common stock of Pluralsight (the “Class B Common Stock”) or Class C common stock of Pluralsight (the “Class C Common Stock” and, together with the Company Common Stock and the Class B Common Stock, the “Company Capital Stock”), which correspond on a one-for-one basis with the Holdings Units, outstanding as of immediately prior to the effective times of the Mergers (except as otherwise provided in the Merger Agreement) will be cancelled and automatically converted into the right to receive cash in an amount equal to $0.0001, without interest, as provided in the amended and restated certificate of incorporation of Pluralsight.
The Merger Agreement also provides that, at the effective times of the Mergers:
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(i)
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each Vested Company Option, Vested Company RSU, Vested Company PSU, Vested Holdings Incentive Unit and Vested Holdings RSU (the “Vested Awards”) will be cancelled and automatically converted into the right to receive an amount in cash equal to the product of (1) the aggregate number of shares of Company Common Stock or Holdings Units subject to such Vested Award, multiplied by (2) $20.26 (or, for each Vested Company Option, the excess, if any, of such amount over such Vested Company Option’s per share exercise price), without interest thereon, subject to any required withholding of taxes; and
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(ii)
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each Unvested Company Option, Unvested Company RSU, Unvested Company PSU, Unvested Holdings Incentive Unit and Unvested Holdings RSU (the “Unvested Awards”) will be cancelled and replaced with a right to receive an amount in cash, without interest, equal to the product of (1) the aggregate number of shares of Company Common Stock or Holdings Units subject to such Unvested Award (or, for each Unvested
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