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Item 1.01
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Entry
Into A Material Definitive Agreement.
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On March
13, 2021, Aegion Corporation, a Delaware corporation (the “Company”), Carter Intermediate Inc., a Delaware corporation
(“Parent”), and Carter Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of Parent (“Merger
Sub”), entered into Amendment No. 1 (the “Amendment”) to the previously announced Agreement and Plan of Merger,
dated as of February 16, 2021 (the “Original Merger Agreement,” and, as amended by the Amendment, the “Merger
Agreement”), by and among the Company, Parent and Merger Sub.
The Merger
Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge
with and into the Company (the “Merger” and, together with the other transactions contemplated by the Merger Agreement,
the “Transactions”), with the Company continuing as the surviving corporation in the Merger and as a wholly-owned
subsidiary of Parent.
The Amendment
increases the merger consideration payable to holders of Aegion common stock by providing that, at the effective time of the Merger,
each share of common stock, par value $0.01 per share, of the Company (the “Common Stock”), issued and outstanding
as of immediately prior to the effective time of the Merger (other than shares of Common Stock (i) held in the treasury of the
Company or owned by any direct or indirect wholly-owned subsidiary of the Company, (ii) owned by Merger Sub, Parent or any direct
or indirect wholly-owned subsidiary of Parent or (iii) for which appraisal rights have been properly demanded in writing in accordance
with the General Corporation Law of the State of Delaware) will be cancelled and automatically converted into the right to receive
$27.00 in cash, without interest and subject to applicable withholding (the “Merger Consideration”). Under the Original
Merger Agreement, the Merger Consideration was $26.00 in cash, without interest.
The Amendment
also increases, from $30 million to $40 million, the termination fee the Company will be required to pay to Parent if the Merger
Agreement is terminated (i) by Parent or the Company due to the Merger not occurring by August 16, 2021 (the “Outside Date”)
or by Parent due to the Company’s material breach of the Merger Agreement and, in each case, an acquisition proposal has
been publicly made or made known to the Board of Directors of the Company (the “Company Board”) prior to the Company
stockholders’ meeting (if held) or the termination of the Merger Agreement (if the Company stockholders’ meeting is
not held), and within 12 months of termination the Company consummates a transaction with respect to such acquisition proposal
(or any acquisition proposal that would have otherwise constituted an acquisition proposal if announced or made known to the Company
Board prior to termination of the Merger Agreement), (ii) by either party due to a failure to receive the necessary approval from
the Company’s stockholders and an acquisition proposal has been publicly made prior to the Company stockholders’ meeting
and within 12 months of termination the Company consummates a transaction with respect to such acquisition proposal (or any acquisition
proposal that would have otherwise constituted an acquisition proposal if announced or made known to the Company Board prior to
termination of the Merger Agreement), (iii) by the Company to enter into an agreement with respect to a superior proposal from
a competing buyer, (iv) by Parent due to the Company Board changing its recommendation in response to a superior proposal from
a competing buyer or by (v) Parent for the Company’s breach, in any material respect, of its covenant not to solicit acquisition
proposals from third parties.
The Amendment
also increases, from $60 million to $70 million, the termination fee Parent will be required to pay to the Company if the Merger
Agreement is terminated by the Company if (i) the mutual closing conditions and Parent’s closing conditions (other than
those to be satisfied at closing) have been satisfied, (ii) the Company certifies to Parent in writing that the Company’s
closing conditions (other than those to be satisfied at closing) have been satisfied or are waived and that the Company stands
ready to close for three business days immediately thereafter, (iii) the Company remains ready to close for such three day business
period and (iv) Parent and Merger Sub fail to consummate the Merger within such three business day period.
The Amendment
also amends the definition of “Superior Proposal” in the Original Merger Agreement to expressly require the Company
Board to take into account (i) the financing (in addition to the legal, financial, regulatory and other) aspects of an acquisition
proposal in the Company Board’s determination of whether such acquisition proposal amounts to a superior proposal and (ii)
the anticipated timing to consummate the Transactions, and all legal, financial, regulatory, financing and other aspects, of an
acquisition proposal as factors in the Company Board’s determination of whether or not such acquisition proposal is a superior
proposal.
Parent
has also, contemporaneously with the execution of the Amendment, delivered to the Company (i) an amended equity commitment letter
entered into with New Mountain Partners VI, L.P. (“New Mountain”) to cover the additional aggregate Merger Consideration
required to be paid by Parent in connection with the Merger as a result of the Amendment and which, together with the debt financing
commitment delivered by Parent in connection with signing of the Original Merger Agreement, commit sufficient funds to Parent
to consummate the Transactions and (ii) an amended limited guarantee in favor of Parent,
pursuant to which New Mountain has guaranteed certain of Parent’s obligations, including payment of any termination fee
Parent is required to pay pursuant to the terms of the Merger Agreement up to the amount of the increased termination fee provided
for in the Amendment.
All other
material terms of the Merger Agreement, which was previously filed by the Company as Exhibit 2.1 to the Current Report on Form
8-K dated February 17, 2021, remain the same.
The foregoing
summary description of the Amendment is subject to and qualified in its entirety by reference to the Amendment, a copy of which
is filed as Exhibit 2.1, and the terms of which are incorporated herein by reference.