Item 2.01. Completion of Acquisition or Disposition of Assets.
As previously disclosed, on July 26, 2016, the Company entered into an Agreement and Plan of Merger (the
Merger Agreement
) with
Laboratory Corporation of America Holdings, a Delaware corporation (
LabCorp
) and Savoy Acquisition Corp., a Delaware corporation and direct wholly owned subsidiary of LabCorp (
Purchaser
).
Pursuant to the Merger Agreement, on August 9, 2016, Purchaser commenced a tender offer to purchase all outstanding shares of the Companys common
stock, including the associated preferred stock purchase rights (the
Shares
) at a price of $2.40 per share, net to the seller in cash, without interest and subject to applicable tax withholding, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated August 9, 2016, and in the related Letter of Transmittal (which, together with all amendments and supplements thereto, collectively constitute the
Offer
).
On September 7, 2016, LabCorp announced that the offering period of the Offer had expired at 12:01 a.m., Eastern time, on September 7, 2016 and
that as of such time, based on the information provided by the depositary for the Offer, 82,901,857 Shares were validly tendered and not withdrawn prior to the expiration of the offering period (including Shares tendered through notices of
guaranteed delivery), representing approximately 69% of the outstanding Shares as of such time (or approximately 67% of outstanding Shares excluding notices of guaranteed delivery), which Shares were sufficient to have met the minimum condition of
the Offer and to enable the Merger (as defined below) to occur under Delaware law without a vote of the Companys stockholders. On September 7, 2016, Purchaser accepted for payment, and paid for, all Shares validly tendered and not
properly withdrawn during the offering period (the
Offer Acceptance Time
).
On September 7, 2016 pursuant to the terms of the
Merger Agreement and following the completion of the offering period, Purchaser merged with and into the Company (the
Merger
) upon the filing on such date of a certificate of merger with the Secretary of State of the State of
Delaware (the
Effective Time
), with the Company continuing as the surviving corporation and a direct wholly owned subsidiary of LabCorp. In the Merger, Shares not tendered and
accepted for payment in the Offer (other than Shares owned by LabCorp, Purchaser or the Company and Shares held by stockholders who are entitled to demand, and who properly perfect their
appraisal rights with respect to such Shares) were converted into the right to receive the same $2.40 per Share, net to the holder in cash, without interest and subject to applicable tax withholding, paid in the Offer (the
Merger
Consideration
).
Each of the Companys stock options (
Company Option
) that were outstanding and unexercised as of
immediately prior to the Effective Time and held by an individual who, as of the Effective Time, was an active employee, director or consultant of the Company, accelerated and became fully vested and exercisable effective immediately prior to the
Effective Time. As of the Effective Time, each Company Option that was then outstanding and unexercised was cancelled and converted into the right to receive cash (without interest) in an amount equal to the product of (i) the total number of
Shares subject to the vested portion of such Company Option immediately prior to the Effective Time (taking into account any acceleration of vesting), multiplied by (ii) the excess, if any, of (x) the Merger Consideration over (y) the
exercise price payable per Share under such Company Option. No holder of a Company Option that had an exercise price per Share that was equal to or greater than the Merger Consideration was entitled to any payment with respect to such cancelled
Company Option before or after the Effective Time.
Pursuant to the Merger Agreement, each restricted stock unit providing for settlement in Shares
(
Company RSU
) that was outstanding as of immediately prior to the Effective Time and held by an individual who, as of the Effective Time, was an active employee, director or consultant of the Company, accelerated and became fully
vested effective immediately prior to the Effective Time. In lieu of any issuance of Shares in settlement of such Company RSU, as of the Effective Time, each Company RSU that was outstanding was cancelled and converted into the right to receive cash
(without interest) in an amount equal to the product of (i) the total number of Shares issuable in settlement of the vested portion of such Company RSU immediately prior to the Effective Time (taking into account any acceleration of vesting)
multiplied by (ii) the Merger Consideration.
Each award of Shares that was subject to vesting or forfeiture or repurchase by the Company
(
Company Restricted Stock Award
) that was outstanding as of immediately prior to the Offer Acceptance Time accelerated and became fully vested such that the Companys right of reacquisition or repurchase, as applicable,
lapsed in full effective immediately prior to the Offer Acceptance Time. As of the Offer Acceptance Time, each Share underlying each Company Restricted Stock Award was treated as an outstanding Share for purposes of the Merger Agreement, including
for purposes of tendering pursuant to the Offer.
The total consideration to be paid is expected to be approximately $300 million, of which
approximately $200 million has been paid by Purchaser in accordance with the terms of the Offer for Shares that were validly tendered and not properly withdrawn in the offering period. These amounts exclude fees and expenses related to the
Offer and the Merger. LabCorp provided Purchaser with sufficient funds to purchase all Shares accepted for payment in the offering period of the Offer and all shares purchased in the Merger.
The foregoing description of the Merger Agreement and the related transactions does not purport to be complete and is qualified in its entirety by reference
to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the SEC on July 27, 2016, and is incorporated herein by reference.