Item 1.01 Entry into a Material Definitive Agreement.
On July 29, 2014, XPO Logistics, Inc., a Delaware corporation ("XPO"), entered
into a definitive Agreement and Plan of Merger (the "Merger Agreement") with New
Breed Holding Company, a Delaware corporation ("New Breed"), Nexus Merger Sub,
Inc., a Delaware corporation and wholly owned subsidiary of XPO ("Merger Sub"),
and NB Representative, LLC, solely in its capacity as the representative for New
Breed's stockholders. Pursuant to the terms of Merger Agreement, Merger
Subsidiary will be merged with and into New Breed (the "Merger"), with New Breed
continuing as the surviving corporation and an indirect wholly owned subsidiary
of XPO. The Merger Agreement provides that XPO will pay an aggregate
consideration of approximately $615 million in cash to acquire New Breed on a
cash-free, debt-free basis, assuming an agreed-upon working capital balance as
of the closing of the Merger.
The completion of the Merger is subject to customary closing conditions,
including the expiration or termination of the waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. XPO's and Merger Sub's
obligations to consummate the Merger are not subject to any condition related to
the availability of financing.
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the actual terms of
the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and
incorporated herein by reference. The Merger Agreement has been included to
provide investors with information regarding its terms and is not intended to
provide any financial or other factual information about New Breed or XPO. In
particular, the representations, warranties and covenants contained in the
Merger Agreement (1) were made only for purposes of that agreement and as of
specific dates, (2) were solely for the benefit of the parties to the Merger
Agreement, (3) may be subject to limitations agreed upon by the parties,
including being qualified by confidential disclosures made for the purposes of
allocating contractual risk between the parties to the Merger Agreement instead
of establishing those matters as facts and (4) may be subject to standards of
materiality applicable to the contracting parties that differ from those
applicable to investors. Moreover, information concerning the subject matter of
the representations, warranties and covenants may change after the date of the
Merger Agreement, which subsequent information may or may not be fully reflected
in public disclosures by XPO. Accordingly, investors should read the
representations and warranties in the Merger Agreement not in isolation but only
in conjunction with the other information about XPO that is included in reports,
statements and other filings it makes with the U.S. Securities and Exchange
Item 3.02 Unregistered Sales of Equity Securities
In connection with the execution of the Merger Agreement, XPO and Louis DeJoy,
Chief Executive Officer of New Breed, have entered into a subscription agreement
(the "Subscription Agreement") pursuant to which Mr. DeJoy has agreed to
purchase $30 million of XPO common stock for cash at a per share price equal to
(1) the closing price of XPO's common stock on the New York Stock Exchange on
July 29, 2014 with respect to 50% of such purchase and (2) the closing price of
XPO's common stock on the New York Stock Exchange on the trading day immediately
preceding the closing date of the Merger with respect to the remaining 50% of
such purchase. The Subscription Agreement will terminate automatically if the
Merger Agreement is terminated. The XPO common stock to be issued under the
Subscription Agreement will be issued pursuant to Section 4(a)(2) of the U.S.
Securities Act of 1933, as amended, and Regulation D promulgated by the U.S.
Securities and Exchange Commission thereunder.
Item 8.01 Other Events
In connection with the execution of the Merger Agreement, XPO and New Breed have
entered into an amended and restated employment agreement with Louis DeJoy, who
is expected to continue as Chief Executive Officer of New Breed. The amended and
restated employment agreement will be effective conditioned upon the effective
time of the Merger and provide for the terms of Mr. DeJoy's continued employment
with New Breed and XPO following the completion of the Merger.
On July 29, 2014, XPO issued a press release announcing the execution of the
Merger Agreement and XPO's acquisition on July 29, 2014 of all of the ownership
interests of Simply Logistics Inc. dba Atlantic Central Logistics ("ACL"), a
non-asset based provider of last mile logistics with 14 East Coast locations.
The full text of the press release is furnished as Exhibit 99.1 to this Current
Report on Form 8-K and is incorporated by reference herein.
Also, on July 29, 2014, in connection with the Merger Agreement, XPO entered
into a commitment letter (the "Commitment Letter") with Credit Suisse Securities
(USA) LLC and Credit Suisse AG, Morgan Stanley Senior Funding, Inc., Deutsche
Bank AG New York Branch and Deutsche Bank Securities Inc. and Citigroup Global
Markets, Inc. (collectively, the "Commitment Parties"). The Commitment Letter
provides that, subject to the conditions set forth therein, the Commitment
Parties will commit to provide a $430 million first lien term loan credit
facility and a $215 million second lien term loan credit facility to a wholly
owned subsidiary of the Company, and the proceeds of each facility may solely be
used (a) to repay existing indebtedness of New Breed, (b) to pay the
consideration for the acquisition of New Breed and (c) to pay related
transaction costs. The commitment is subject to various conditions, including
(i) the absence of a material adverse effect having occurred with respect to XPO
and its subsidiaries, (ii) the execution of satisfactory definitive
documentation and (iii) other customary closing conditions. Any permanent debt
or equity financing obtained by the Company on or prior to the closing of the
Merger will reduce the amount of the commitment. Under the terms of the
Commitment Letter, the Company will not be an obligor on the facilities.
Item 9.01 Financial Statements and Exhibits.
Exhibit Description of Document
2.1* Agreement and Plan of Merger, dated as of July 29, 2014, by and among
New Breed Holding Company, XPO Logistics, Inc., Nexus Merger Sub, Inc.
and NB Representative, LLC, in its capacity as the Representative†
99.1* XPO Logistics, Inc. Press Release, dated July 29, 2014
† Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. XPO
hereby undertakes to furnish supplemental copies of any of the omitted
schedules upon request by the U.S. Securities and Exchange Commission
* Previously filed.
Forward Looking Statements
This document includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact are, or may be deemed to be, forward-looking
statements. In some cases, forward-looking statements can be identified by the
use of forward-looking terms such as "anticipate," "estimate," "believe,"
"continue," "could," "intend," "may," "plan," "potential," "predict," "should,"
"will," "expect," "objective," "projection," "forecast," "goal," "guidance,"
"outlook," "effort," "target" or the negative of these terms or other comparable
terms. However, the absence of these words does not mean that the statements are
not forward-looking. These forward-looking statements are based on certain
assumptions and analyses made by us in light of our experience and our
perception of historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate in the
These forward-looking statements are subject to known and unknown risks,
uncertainties and assumptions that may cause actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. Factors that might cause or contribute to a material
difference include, but are not limited to, those discussed in XPO's filings
with the SEC
and the following: economic conditions generally; competition;
XPO's ability to find suitable acquisition candidates and execute its
acquisition strategy; the expected impact of the acquisition of New Breed and
ACL, including the expected impact on XPO's results of operations; the ability
to obtain the requisite regulatory approvals and the satisfaction of other
conditions to consummation of the transaction; the expected closing date for the
acquisition of New Breed; XPO's ability to raise debt and equity capital; XPO's
ability to attract and retain key employees to execute its growth strategy,
including retention of New Breed's and ACL's management teams; litigation,
including litigation related to misclassification of independent contractors;
the ability to develop and implement a suitable information technology system;
the ability to maintain positive relationships with XPO's network of third-party
transportation providers; the ability to retain XPO's and acquired companies'
largest customers; XPO's ability to successfully integrate New Breed, ACL and
other acquired businesses and realize anticipated synergies and cost savings;
rail and other network changes; weather and other service disruptions; and
governmental regulation. All forward-looking statements set forth in this
document are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated will be realized
or, even if substantially realized, that they will have the expected
consequences to, or effects on, XPO's businesses or operations. Forward-looking
statements set forth in this document speak only as of the date hereof, and XPO
undertakes no obligation to update forward-looking statements to reflect
subsequent events or circumstances, changes in expectations or the occurrence of
unanticipated events except to the extent required by law.