Item 2.01
Completion of Acquisition or Disposition of Assets.
As previously announced, on August 14, 2018, KMG entered into an Agreement and Plan of Merger (Merger Agreement) with Cabot Microelectronics Corporation, a Delaware corporation (Cabot Microelectronics), and Cobalt Merger Sub Corporation, a Texas corporation and wholly owned subsidiary of Cabot Microelectronics (Merger Sub), providing for the acquisition of KMG by Cabot Microelectronics. On November 15, 2018, Cabot Microelectronics completed the acquisition of KMG. Pursuant to the Merger Agreement, Merger Sub merged with and into KMG, with KMG becoming a direct, wholly owned subsidiary of Cabot Microelectronics (the Merger).
At the effective time of the Merger (the Effective Time), each outstanding share of KMG common stock, par value $0.01 per share (KMG Common Stock), other than (i) any shares of KMG Common Stock held by KMG, Cabot Microelectronics and their subsidiaries at the Effective Time and (ii) shares subject to a KMG Equity Award (as defined below), was automatically converted into the right to receive the following consideration (collectively, the Merger Consideration), without interest:
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$55.65 in cash (the Cash Consideration); and
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0.2000 shares of common stock of Cabot Microelectronics, par value $0.001 per share (CMC Common Stock).
Immediately prior to closing, each restricted stock unit award and performance stock award relating to shares of KMG Common Stock (each, a KMG Equity Award) granted prior to August 14, 2018 vested (with any applicable performance targets deemed satisfied at the level specified in the applicable award agreement) and were cancelled in exchange for the Merger Consideration in respect of each share of KMG Common Stock underlying the applicable KMG Equity Award. In addition, at the Effective Time, each KMG Equity Award granted on or following August 14, 2018 was converted into a corresponding award relating to shares of CMC Common Stock and will continue to vest post-closing in accordance with the terms of the applicable award agreement (which will include vesting on a qualifying termination of employment).
The aggregate amount paid by Cabot Microelectronics as Merger Consideration was approximately $901 million in cash and approximately 3.2 million shares of CMC Common Stock.
The issuance of CMC Common Stock in connection with the Merger was registered under the Securities Act of 1933, as amended, pursuant to Cabot Microelectronics registration statement on Form S-4 (File No. 333-227301) (as amended, the Registration Statement) filed with the SEC and declared effective on October 9, 2018. The definitive proxy statement/prospectus, dated October 9, 2018, of Cabot Microelectronics and KMG that forms part of the Registration Statement contains additional information about the Merger and the other transactions contemplated in connection therewith.
The foregoing description of the Merger Agreement and the Merger is not intended to be complete and is subject to and qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to KMGs Current Report on Form 8-K filed with the SEC on August 17, 2018 and which is incorporated herein by reference.