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After (1) requesting and receiving advice from representatives of Citi, including as to (x) the financial capabilities of Blackstone and Party A, (y) whether Blackstone and Party A were the persons most likely to place an attractive valuation on the Company, to have substantial available capital to effect such an acquisition and to have the market experience and sophistication to timely complete such an acquisition, and (z) Citi’s perspectives on recent comparable transactions, and (2) taking into account the potential risks of conducting a broader auction process as noted by representatives of management and Skadden with respect to various matters that the board believed to be relevant, the board determined to pursue negotiations with Blackstone and Party A in lieu of conducting a broader auction process at that time | 1 |
Prior to obtaining the required company stockholder approval, our board may, in certain circumstances, (i) withdraw, withhold, qualify or modify, or propose publicly to withdraw, withhold, qualify or modify, in a manner adverse to the Parent Entities, the recommendation of our board recommending that our stockholders approve the merger; (ii) not include the company board recommendation in the proxy statement; (iii) authorize, adopt, approve or recommend, or publicly propose to authorize, adopt, approve or recommend, any acquisition proposal or (iv) take any formal action or make any recommendation or public statement in connection with a tender offer or exchange offer (we refer to any of the actions described in clauses (i) through (iv) as an “adverse recommendation change”), subject to complying with specified notice and other conditions set forth in the merger agreement | 0 |
In arriving at its fairness determination, Citi considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it | 0 |
Attendance at the special meeting alone will not be sufficient to revoke a previously authorized proxy | 0 |
Citi prepared these analyses for purposes of providing its opinion to the board as to the fairness, from a financial point of view, to the holders (other than the Company, the Parent Entities or Merger Sub) of our issued and outstanding common stock, as of the date of the written opinion, of the $39 | 0 |
The board then authorized representatives of Citi and Skadden to engage with Blackstone and representatives of Simpson Thacher to negotiate improvements to the terms of the updated Blackstone proposal | 1 |
During the afternoon of Sunday, March 31, 2024, the independent directors of the board met virtually, without Mr | 1 |
Although none of the target companies in the selected precedent transactions are directly comparable to the Company and none of the selected precedent transactions are directly comparable to the transactions contemplated by the merger agreement, the selected precedent transactions were chosen because certain aspects of the selected precedent transactions, including the 10-year U | 0 |
The Parent Entities have informed us that they currently believe that the funds to be borrowed under the potential debt financing would be secured by, among other things, a first priority mortgage lien on certain properties that are wholly owned by the Company, certain escrows and reserves and such other pledges and security required by the lenders to secure and perfect their interests in the applicable collateral, and that such debt financing would be conditioned on the merger being completed and other customary conditions for similar financings | 0 |
HireRight, however, cannot assure that the Effective Time will occur by any particular date, if at all | 0 |
Blackstone informed representatives of Citi that, based on publicly available information, its preliminary valuation of the Company would be in the range of $35-36 per share of the Company common stock, in cash | 1 |
The board then authorized Citi to have informal discussions with Blackstone, Party A, and Party B to ascertain how they would value the Company based on publicly available information, but made it clear to Citi, and instructed Citi to inform Blackstone, Party A and Party B, that no decision had been made to market the Company | 1 |
Thereafter and continuing on Sunday, April 7, 2024, the Company, with the assistance of Citi and Skadden, and Blackstone, with the assistance of Simpson Thacher, continued to negotiate the terms of the proposed merger agreement and other transaction documents and exchanged and discussed various drafts of the documents | 1 |
The unlevered free cash flows and the range of terminal values were then discounted to present values reflecting implied enterprise values for the Partnership, as of December 31, 2023, using mid-year convention and discount rates ranging from 10 | 0 |
The following summary, however, does not purport to be a complete description of the financial analyses performed by Citi, nor does the order of analyses described represent relative importance or weight given to those analyses by Citi | 0 |
At this meeting, the board and the Company’s management again discussed the financial projections, the bases on which they were prepared, and various potential risks and rewards of continuing to pursue the Company’s stand-alone business plan | 1 |
12 per share of the Company common stock, in cash (representing an approximately 25% premium to the closing price of the Company common stock on Friday, April 5, 2024), assumed that no further dividends would be paid by the Company, and indicated that this was Blackstone’s best and final offer (we refer to such proposal, reflecting the updated price, as the “final Blackstone proposal”) | 1 |
The Sponsor Shares are not entitled to receive the Merger Consideration and will, immediately prior to the Closing, be contributed, directly or indirectly, to Parent (or any direct or indirect parent company thereof) pursuant to the terms of the applicable Support Agreement and will be treated as Owned Company Shares | 0 |
The Parent Entities have informed us that they currently are pursuing obtaining approximately $3 | 0 |
Blackstone and Party A were invited to schedule diligence sessions with Company management and tours of the Company’s properties | 1 |
Accordingly, your vote is very important regardless of the number of shares of common stock that you own | 0 |
Given that the initial Party A proposal provided for a price per Company Common Share of $37 | 1 |
Stockholders and beneficial owners considering seeking appraisal should be aware that the fair value of their shares of Company Common Stock as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration that they would receive pursuant to the Merger Agreement if they did not seek appraisal of their shares of Company Common Stock | 0 |
00 per share (representing an approximately 22% premium to the closing price of the Company common stock on that date), which assumed that the Company did not declare any further dividends on the Company common stock | 1 |
certain matters set forth in the confidential disclosure letter to the Merger Agreement | 0 |
In the draft amendment to the Partnership LPA, Blackstone proposed that the Partnership would redeem Partnership units only for cash (and would not exercise its right to pay for redeemed Partnership units in shares of the Company common stock), and that the value of Partnership Common Units would be determined by the General Partner in good faith rather than by reference to the trading price of the Company’s common stock (and that for ten days after the closing, the value of Partnership Common Units would be an amount equal | 1 |
No non-public information regarding the Company was shared at that time and no terms of any potential transaction were discussed | 1 |
Thereafter, each of Blackstone and Party A were told by representatives of Citi that the board would next be meeting on March 27, 2024 | 1 |
The board and the Company’s management regularly review the Company’s long-term strategic plan with the goal of maximizing stockholder value | 1 |
12 in cash per share to be received by such holders pursuant to the merger agreement | 0 |
During the term of the merger agreement, we may not pay dividends, except as necessary to preserve our tax status as a real estate investment trust or to avoid the incurrence of entity-level income or excise taxes, and any such dividends would result in an offsetting decrease to the common stock merger consideration | 0 |
8 billion of debt financing to be incurred by the Partnership and/or certain of its subsidiaries, which would be provided substantially concurrently with the closing of the merger | 0 |
00 per share of the Company common stock would prohibit the Company from paying any dividends in respect of the Company common stock prior to the consummation of a transaction | 1 |
After considering (i) Citi’s qualifications and experience advising, and familiarity with, multi-family real estate companies and (ii) Citi’s long-standing relationship with the Company, including the assistance Citi provided to the Company during its separation from Aimco, the board decided that the Company’s management should explore these questions with Citi and identify persons who would be likely to both place an attractive valuation on the Company at the highest price per share and have substantial available capital to effect such an acquisition | 1 |
For the avoidance of doubt, except to the extent expressly waived in the General Atlantic Support Agreement, all rights and obligations under the Tax Receivable Agreement shall remain in full force and effect | 0 |
The merger proposal must be approved by the affirmative vote of the holders of at least two-thirds of the outstanding shares of our common stock entitled to vote on the matter at the special meeting | 0 |
Party B informed representatives of Citi that it was not interested in exploring any potential acquisition of the Company at that time but that it was interested in continuing to seek opportunities to partner with the Company | 1 |
The board also asked, and the Company’s management answered, clarifying questions related to the financial projections | 1 |
On March 22, 2024, representatives of the Company and its advisors held separate calls with representatives of Blackstone and Party A, and their respective advisors, to discuss potential transaction structures | 1 |
Based on the foregoing and advice from Citi, (i) the board and the Company’s management believed that Blackstone, Party A, and Party B were the persons most likely to place an attractive valuation on the Company at the highest price per share and (ii) the board determined that it was unlikely other bidders existed with sufficient financial resources to acquire the Company at a valuation higher than the valuations likely to come from the three identified bidders | 1 |
12 per share of the Company common stock and that no dividends (other than those necessary to maintain REIT status or to avoid the incurrence of entity-level income or excise taxes, with the per share merger consideration to be decreased on a dollar-for-dollar basis in the event of any such dividend) be paid by the Company prior to the closing | 1 |
For each of the selected precedent transactions, Citi reviewed the per share transaction price payable in the selected precedent transaction and compared it against the applicable company’s consensus net asset value per share at the time of the transaction | 0 |
05, but that Blackstone’s offer continued to assume that the Company would not be permitted to issue dividends other than those necessary to maintain REIT status or to avoid the incurrence of entity-level income or excise taxes (with the per share purchase price being decreased by an amount equal to any such dividends) | 1 |
As part of these ongoing evaluations, the board and the Company’s management have, from time to time, considered various strategic alternatives, including: (i) executing the Company’s existing strategy as a stand-alone public company, (ii) opportunistically selling all or portions of the Company’s properties and purchasing other companies and/or additional properties on attractive terms, (iii) working with third-party sources of private capital in joint ventures to expand the Company’s portfolio with a lower cost of capital, and (iv) possibly selling the Company to, or combining the Company with, a third party | 1 |
During that time, representatives of each of Blackstone and Party A also conducted tours at most of the Company’s properties | 1 |
Representatives of Citi communicated to Blackstone that its revised valuation was insufficient and that it would need to improve its proposed price | 1 |
Also on April 3, 2024, representatives of Blackstone and Simpson Thacher, on behalf of Blackstone, submitted a markup of the disclosure schedules to the merger agreement, as well as drafts of an equity commitment letter and limited guarantee (which, together with the mark-up to the merger agreement submitted on April 1, 2024, we refer to collectively as the “initial Blackstone documentary submissions”) to representatives of Citi and Skadden | 1 |
Closing Conditions The consummation of the merger is subject to certain customary closing conditions, including, among others, (i) approval of the merger by the affirmative vote of the holders of at least two-thirds of the outstanding shares of our common stock entitled to vote on the merger (the “required company stockholder approval”), (ii) the absence of a law or order restraining, enjoining, rendering illegal or otherwise prohibiting the consummation of the merger, and (iii) the absence of a material adverse effect | 0 |
On Friday, March 29, 2024, Party A submitted a written, non-binding letter to representatives of Citi confirming the terms of the initial Party A proposal without any improvement on price and reiterated its request for a 45-day exclusivity period to further evaluate the transaction | 1 |
” Representatives from Citi also discussed the Company’s historical performance and stock price, and certain valuation methodologies that Citi believed would be appropriate to use if the board were to ask Citi to determine whether an offer in respect of the Company’s common stock was fair to the Company and its stockholders from a financial perspective | 1 |
Each of Blackstone, another strategic buyer in the real estate industry (which we refer to as “Party A”) and a sovereign wealth fund (which we refer to as “Party B”) were identified as being familiar with the Company’s operations, properties and platform and as having substantial available capital to effect an acquisition of the Company | 1 |
Among other matters, the Company’s management confirmed to the board that, as of such time, Blackstone had not discussed the terms of any post-closing employment of equity participation for the Company’s management (other than the fact that the Partnership would remain in place and that the Partnership units would remain outstanding) with any members of the Company’s management | 1 |
Members of the board asked questions and discussion ensued among the board, the Company’s management and representatives from Citi and Skadden related to the terms of the updated Blackstone proposal, the Company’s recourse if a transaction were not consummated, the terms of the updated Blackstone proposal relative to recent similar Blackstone transactions, and Blackstone’s track record in similar deals | 1 |
These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold | 0 |
Party B indicated that, had it been interested in acquiring the Company, its preliminary valuation of the Company would not have been at a premium to the trading price of the Company common stock, which at that time was in the low $30s per share | 1 |
Blackstone additionally indicated that its proposal was not subject to any financing contingency, that Blackstone had conducted extensive due diligence to date and that Blackstone was prepared to complete any remaining confirmatory due diligence, finalize documentation and announce a transaction prior to the opening of the stock market on Friday, April 5, 2024 | 1 |
Treatment of Equity Compensation Awards For our executive officers and directors, at the Effective Time, their HireRight equity compensation awards will be treated as follows: • Each Company Option granted under the 2018 Equity Plan, whether vested or unvested, will be converted into an option to purchase the same number of shares of common stock of the Surviving Corporation at the same per-share exercise price and subject to the same terms and conditions as the applicable Company Option (including vesting conditions); All of the Company Options granted under the 2021 Equity Plan held by our executive officers and directors have a per-share exercise price equal to or greater than the Merger Consideration, and such Company Options, whether vested or unvested, will be forfeited and cancelled for no consideration; With respect to Company RSUs, (i) any outstanding vested Company RSUs that have not yet settled as of the Effective Time (including any Company RSUs held by non-employee directors, which will become immediately vested on May 25, 2024) will be treated in the same manner as shares of Company Common Stock and (ii) any outstanding unvested Company RSUs (including each Company PRSU that on March 12, 2024 was converted to an unvested Company RSU based on the level of achievement of the applicable adjusted EBITDA performance conditions) will be converted into the right to receive an amount (without interest) in cash equal to the product of (A) the total number of shares of Company Common Stock subject to such Company RSU multiplied by (B) the Merger Consideration, which cash-based award will remain subject to the same vesting conditions as the applicable Company RSU; Each outstanding Company PRSU in respect of HireRight’s total stockholder return will be forfeited and cancelled for no consideration; and • Each other Company PRSU that is outstanding will be converted into the right to receive an amount (without interest) in cash equal to the product of (A) the total number of shares of Company Common Stock subject to such Company PRSUs multiplied by (B) the Merger Consideration, which cash-based award will remain subject to the same vesting conditions (including performance conditions) as the Company PRSUs | 1 |
0% of the Company’s equity value, shortened the period of time the Company would be able to terminate the merger agreement to accept a superior proposal while paying the lower fee from 60 days to 50 days, and shortened the period of time for the relevant acquisition proposal to be received from 45 days to 35 days after the signing of a merger agreement | 1 |
Blackstone additionally indicated that its proposal was not subject to any financing contingency, that Blackstone had conducted extensive due diligence to date and that Blackstone was prepared to negotiate and enter into definitive documents and complete any remaining confirmatory due diligence by the opening of market on Monday, April 1, 2024 should the Company be interested in proceeding | 1 |
The Parent Entities also expect certain of our mortgage loans to be repaid or remain outstanding | 0 |
” Also on Thursday, April 4, 2024, the full board was provided with the initial Blackstone documentary submissions | 1 |
Representations, Warranties and Covenants The merger agreement contains customary representations, warranties and covenants, including, among others, covenants by the Company to conduct its business in all material respects in the ordinary course of business and in a manner consistent with past practice, subject to certain exceptions, during the period between the execution of the merger agreement and the closing | 0 |
As part of executing on the board’s long-term strategic plan, the Company successfully (i) concluded all of its material contractual arrangements with Aimco, (ii) achieved and maintains an efficient cost structure, (iii) provided an efficient and effective way to invest in U | 1 |
Representatives of Citi referenced the materials that Citi circulated to the board in advance of the meeting and updated the directors on the final Blackstone proposal, in particular the increase in price to $39 | 1 |
On Wednesday, March 27, 2024, Party A submitted to a representative of Citi, an oral, non-binding proposal for a strategic transaction involving the Company, with a preliminary indicative price of $37 | 1 |
In response to questions from the board, (i) the Company’s management and representatives from Citi confirmed that pursuing a transaction in which the Partnership would also be acquired for cash would be significantly detrimental to an overall valuation of the Company given the terms of certain tax indemnification obligations the Partnership has to certain of its limited partners, and (ii) representatives from Skadden confirmed that holders of Partnership units would continue to have the redemption rights set forth in the Partnership LPA, and that the latest draft merger agreement from Blackstone contemplated a pre-closing amendment to the Partnership LPA to provide that, after a closing, the Partnership would not be able to redeem Partnership units other than for cash, and that the value of Partnership Common Units would be determined by the General Partner in good faith rather than by reference to the trading price of the Company’s common stock (and that for ten days after the closing, the value of Partnership Common Units would be an amount equal to the common stock merger consideration less the aggregate amount of distributions per Partnership Common Unit declared or paid to holders of Partnership Common Units during the period starting on the closing date and ending on the date a notice of redemption is received) | 1 |
ET on Sunday, April 7, 2024 if Blackstone and the Company did not sign a definitive agreement by such time | 1 |
Following the conclusion of the board meeting, the Company and Blackstone finalized and executed the merger agreement and limited guarantee | 1 |
If the Merger is consummated and certain conditions are met, stockholders (and certain beneficial owners of Company Common Stock) who continuously hold (or beneficially own, as the case may be) shares of Company Common Stock from the date of the making of the demand through the effective date of the Merger | 0 |
On March 18, 2024, the Company and Citi entered into a customary indemnity letter in favor of Citi in connection with the assistance it was providing to the Company | 1 |
In particular, the board directed its advisors to seek to (i) lower the price of the two-tier termination fee to facilitate competing bids if the Company were to enter into a definitive transaction agreement with Blackstone, (ii) increase the price per share of the Company common stock, and (iii) permit the Company to issue its regular quarterly dividend through the closing of any transaction | 1 |
During the course of February 2024, representatives of Citi had informal discussions with representatives of Blackstone and asked Blackstone for its views on the value of the Company | 1 |
Later in the day on Thursday, April 4, 2024, the board held a meeting at which all members of the board and representatives of the Company’s management, Citi and Skadden were in attendance | 1 |
Considine and management, to further discuss the non-binding proposals received to date | 1 |
On March 4, 2024, the Company entered into a confidentiality agreement with Party A, which included customary standstill provisions (which standstill terminated, in accordance with its terms, upon the Company’s entry into the merger agreement) | 1 |
During the course of April 3, 2024 and April 4, 2024, representatives from the Company’s management discussed with Skadden the markup of the merger agreement and related disclosure schedules received from Blackstone with representatives from Skadden | 1 |
If you fail to authorize a proxy to vote your shares or to vote at the special meeting, or fail to instruct your broker, bank or other nominee on how to vote, the effect will be that the shares of common stock that you own will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote “AGAINST” the merger proposal | 0 |
In October 2021, the Company entered into one of those joint ventures with affiliates of Blackstone, which the Company has previously disclosed in its filings with the SEC as the “Virginia” joint venture | 1 |
Representatives from Citi provided to the board additional preliminary financial analysis of the Company and the updated bids | 1 |
00 in the initial Blackstone proposal and then increased its price again to $39 | 1 |
The independent directors discussed, among other matters, the proposals from Blackstone and Party A, and the proposed transaction structure and process, including next steps | 1 |
Despite management’s execution of the board’s long-term strategic plan, the board remained aware that numerous | 1 |
From time to time since the Company’s separation from Aimco, various parties, including Blackstone, indicated to the Company that should an opportunity arise for such party to acquire properties from the Company and/or acquire the Company, such party would be inclined to consider such a transaction | 1 |
ability for third parties to submit, and the Company to enter into, an agreement with respect to a superior proposal by paying a termination fee, along with matching rights in favor of the buyer if any superior proposal were received, and (iii) that certain matters related to retention of employees through closing and treatment of certain existing employee benefits entitlements remained to be negotiated | 1 |
As described above, and subject to the provisions described below, the HireRight Board and Special Committee have made the recommendation that HireRight stockholders vote “FOR” the proposal to adopt the Merger Agreement | 0 |
The initial borrowings under the Debt Financing are subject to the satisfaction (or waiver by the Debt Financing Sources) of a number of limited conditions, including (i) the execution and delivery of executed definitive loan documentation and receipt of customary legal opinions and closing documents, notices and certificates (including a customary solvency certificate), (ii) the Merger shall have been consummated prior to or substantially concurrently with the initial borrowing under the Debt Financing in all material respects in accordance with the terms of the Merger Agreement, without giving effect to any modifications, amendments or express consents or waivers that are materially adverse to the interests of the Initial Incremental Lenders (as defined in the Debt Commitment Letter) (in their capacity as such) which have not been consented to by the Lead Arrangers (as defined in the Debt Commitment Letter) (such consent not to be unreasonably withheld, conditioned or delayed), (iii) from February 15, 2024, no Company Material Adverse Effect (as defined in the Merger Agreement) having occurred, (iv) delivery of certain historical and future financial statements of HireRight and its subsidiaries within the time periods specified in the Debt Commitment Letter, (v) payment of required fees and expenses and (vi) the making and accuracy in all material respects of the specified representations set forth in the Debt Commitment Letter and certain representations and warranties in the Merger Agreement | 0 |
The waiting period with respect to the notification and report forms expired at 11:59 pm Eastern Time on April 1, 2024 | 0 |
0%, reflecting estimates of the Company’s weighted average cost of capital selected by Citi utilizing its professional judgement and experience, and derived from Citi’s review of public filings, Bloomberg and FactSet Research Systems | 0 |
Thereafter, at the direction of the board, Citi representatives separately communicated to representatives of Blackstone and Party A that their respective proposed prices per share of the Company common stock were insufficient, that the board would next meet to consider valuations on April 4, 2024, that each of Blackstone and Party A would need to increase its price in a revised proposal if it was interested in acquiring the Company, and that there was no certainty that the board would decide to proceed | 1 |
25% as provided in the Company’s draft of the merger agreement) of the Company’s equity value, along with matching rights in favor of the buyer if any superior proposal were received, (ii) that the Company would not have the right to seek specific performance or damages from Blackstone but rather Blackstone would pay to the Company a reverse termination fee of 9% of the Company’s equity value as an exclusive remedy under certain circumstances, and (iii) that the Company would not be permitted to pay any dividends in respect of the Company common stock other than those necessary to maintain REIT status or to avoid the incurrence of entity-level income or excise taxes (with the per share merger consideration to be decreased on a dollar-for-dollar basis in the event of any such dividend) | 1 |
7 billion to be paid to the holders of our common stock (other than the excluded common stock), and holders of preferred stock, restricted stock awards and options | 0 |
On April 8, 2024, prior to the opening of trading hours, Blackstone and the Company issued a joint press release announcing the execution of the merger agreement | 1 |
On Saturday, April 6, 2024, Blackstone submitted a revised written non-binding proposal, providing for an offer price of $39 | 1 |
On Thursday, March 28, 2024, the Company uploaded a draft merger agreement and disclosure schedules related thereto, prepared with the assistance of representatives of Skadden and the Company’s management, to the data room, but access at that time was limited to Blackstone and its representatives pending confirmation as to whether Party A would increase its $37 | 1 |
The Merger Agreement provides that, upon the terms and subject to the conditions of the Merger Agreement, and the applicable provisions of the DGCL, at the Effective Time, Merger Sub will be merged with and into HireRight, whereupon the separate corporate existence of Merger Sub will thereupon cease, and HireRight will continue as the surviving corporation of the Merger (the “Surviving Corporation”) | 0 |
The following description of the Merger Agreement is a summary of the material terms and conditions of that document and is qualified by reference to the full text of the Merger Agreement, which is included as Annex A hereto | 0 |
Under the Maryland General Corporation Law, because shares of our common stock were listed on the New York Stock Exchange at the close of business on the record date, you do not have any appraisal rights, dissenters’ rights or the rights of an objecting stockholder in connection with the merger | 0 |
At this meeting, representatives from management of the Company presented to the board its financial projections, which are discussed in more detail in the section entitled “—Unaudited Prospective Financial Information—Financial Projections | 1 |
The merger agreement requires the Company to convene a stockholders’ meeting for the purpose of obtaining the required company stockholder approval | 0 |
It was believed that these benefits would result in a lower cost of capital and an increased valuation of the Company in the public markets | 1 |
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