Item 2.01.
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Completion of Acquisition or Disposition of Assets.
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As previously disclosed, CDI Corp., a Pennsylvania
corporation (the
Company
), entered into an Agreement and Plan of Merger (the
Merger Agreement
), dated July 31, 2017, with Nova Intermediate Parent, LLC, a Delaware limited liability company
(
Parent
), and Nova Merger Sub, Inc., a Pennsylvania corporation and a wholly owned subsidiary of Parent (
Merger Sub
). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof,
on August 14, 2017, Parent and Merger Sub commenced a cash tender offer (the
Offer
) to purchase all of the Companys outstanding shares of common stock, par value $0.10 per share (the
Shares
), at a
purchase price of $8.25 per share (the
Offer Price
), net to the seller in cash, without interest thereon and less any applicable withholding taxes.
The Offer and withdrawal rights expired as scheduled at 9:00 a.m., Philadelphia, Pennsylvania time on Tuesday, September 12, 2017 (the
Expiration Date
). Based on information provided to the Company by Computershare Trust Company, N.A., the depositary for the Offer (the
Depositary
), as of the expiration of the Offer, a total of 15,504,481 Shares
were validly tendered and not validly withdrawn pursuant to the Offer (not including 321,104 Shares tendered pursuant to notices of guaranteed delivery), representing approximately 78% of the then issued and outstanding Shares on a fully diluted
basis. The Minimum Tender Condition and all other Offer Conditions (each as defined in the Merger Agreement) having been satisfied, Merger Sub accepted for payment all Shares that were validly tendered and not validly withdrawn pursuant to the
Offer.
On September 13, 2017, pursuant to the terms of the Merger Agreement and in accordance with Section 321(d) of the Pennsylvania Business
Corporation Law of 1988, as amended, Merger Sub merged with and into the Company with the Company being the surviving corporation (the
Merger
). Upon completion of the Merger, the Company became a direct wholly owned subsidiary of
Parent.
At the effective time of the Merger (the
Effective Time
) and pursuant to the terms and conditions of the Merger Agreement,
each Share issued and outstanding immediately prior to the Effective Time was canceled and converted into the right to receive the Offer Price, without interest and less any applicable withholding taxes, except for Shares held by the Company
(including Shares held by the Company as treasury stock), Parent, or any of their respective subsidiaries or Shares with respect to which dissenters rights have been properly and validly perfected pursuant to Subchapter D of Chapter 15 of the
Pennsylvania Business Corporation Law of 1988, as amended. The Shares will no longer be listed on the New York Stock Exchange (the
NYSE
).
The foregoing summary description of the transactions contemplated by the Merger Agreement does not purport to be complete and is qualified in its entirety by
reference to the Merger Agreement, which was filed as Exhibit 2.1 to the Current Report on Form
8-K
filed by the Company with the Securities and Exchange Commission (the
SEC
) on
August 1, 2017, which is incorporated herein by reference.
Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance
Sheet Arrangement of a Registrant.
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On the Closing Date, the Company and certain of its subsidiaries entered into a Credit Agreement with PNC Bank, National Association, as administrative agent
(the
Administrative Agent
) and collateral agent, and the certain other parties thereto (the
Credit Agreement
). The Credit Agreement provides for a five-year $150,000,000 senior secured revolving credit facility,
which credit facility includes a $15,000,000 Canadian sub-facility.
At the Companys option, the principal balance of U.S. loans outstanding under
the Credit Agreement will bear interest at a rate equal to (i) LIBOR plus an applicable margin equal to 2.50% or (ii) a base rate (the
Base Rate
) that is the greatest of: (i) the rate of interest determined from time to time by
the Administrative Agent as its prime rate as in effect on such day, (ii) the sum of (x) the Federal Funds Open Rate, plus (y) 1/2 of 1.00% per annum, and (iii) the sum of (x) LIBOR plus (y) 1.00%, plus an applicable margin equal to
1.50%. The principal balance of Canadian loans outstanding under the Credit Agreement will bear interest at a rate equal to the rate of interest determined from time to time by the Administrative Agent as its reference rate as in effect
on such day plus an applicable margin equal to 1.50%.
The Company borrowed $100,000,000 under the Credit Agreement on the Closing Date. The Credit
Agreement includes covenants requiring the Company to maintain certain financial ratios. The Company used the proceeds of the revolving loans funded on the Closing Date to (i) fund a portion of the consideration for the Merger, (ii) refinance prior
debt, and (iii) pay fees, expenses and other transaction costs. The Company may use proceeds of loans under the revolving credit facility after the Closing Date for working capital purposes.