UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement
In connection with the Merger (as defined below), R. R. Donnelley & Sons Company (the “Company”) solicited waivers and consents (the “Consent Solicitations”) from holders of its 6.000% Notes due 2024 (the “2024 Notes”), 6.125% Senior Secured Notes due 2026 (the “2026 Notes”) and 8.820% Debentures due 2031 (the “2031 Debentures” and, collectively with the 2024 Notes and the 2026 Notes, the “Debt Securities”) to waive certain provisions in and adopt certain proposed amendments to the 2024 Notes Indentures, the 2026 Notes Indenture and the 2031 Debentures Indenture (as each defined below), including with respect to:
| • | the 2024 Notes Indenture and the 2026 Notes Indenture to: (i) declare that the Merger (as defined below) does not constitute a Change of Control (as defined in each of the 2024 Notes Indenture and the 2026 Notes Indenture) under each of the 2024 Notes Indenture and the 2026 Notes Indenture and waive any obligation of the Company to make a change of control offer in connection with the Merger, (ii) amend the defined term “Change of Control” in each of the 2024 Notes Indenture and the 2026 Notes Indenture to include a carve-out for certain “Permitted Holders” and (iii) add to, amend, supplement or change certain other defined terms contained in each of the 2024 Notes Indenture and the 2026 Notes Indenture related to the foregoing; |
| • | the 2026 Notes Indenture, in addition to the foregoing, to: (i) modify certain restrictive covenants and defined terms, including those related to asset sales, restricted payments, incurrence of indebtedness and liens, and transactions with affiliates, among others, to expressly permit the Merger and the other transactions contemplated by the Merger Agreement (as defined below) (the “Merger Transactions”), (ii) eliminate certain conditions to the consummation of a merger solely with respect to the Merger Transactions, (iii) reduce the period during which an event of default may be declared in certain instances in connection with the Merger Transactions from two years to one year, and (iv) modify the Company’s obligations with respect to conducting quarterly conference calls to discuss results of operations; and |
| • | the 2024 Notes Indenture and the 2031 Debentures Indenture, in each case to amend the reporting covenant to conform with the corresponding covenant in the 2026 Notes Indenture, except such conforming amendments will not include any obligation to conduct quarterly conference calls, collectively the “Proposed Amendments.” |
The Company received the requisite consents from holders of each series of Debt Securities.
On February 7, 2022, the Company entered into (i) a Twelfth Supplemental Indenture, dated as of February 7, 2022 (the “2024 Notes Twelfth Supplemental Indenture”), to the Indenture, dated as of January 3, 2007 (the “2024 Notes Base Indenture”), between the Company and Wells Fargo Bank, National Association (as successor to LaSalle Bank National Association), as trustee (the “WF Trustee”), as supplemented by the Tenth Supplemental Indenture, dated as of March 20, 2014 (together with the 2024 Notes Base Indenture, the 2024 Notes Indenture”), between the Company and the WF Trustee, as trustee, governing the 2024 Notes, (ii) Supplemental Indenture No. 2, dated as of February 7, 2022 (the “2026 Notes Second Supplemental Indenture”), to the Indenture, dated as of April 28, 2021 (the “2026 Notes Base Indenture”), among the Company, the guarantors parties thereto, as guarantors (the “Guarantors”), and U.S. Bank Trust Company, National Association (as successor to U.S. Bank National Association), as trustee and notes collateral agent (the “US Bank Trustee”), as supplemented by Supplemental Indenture No. 1, dated as of May 10, 2021 (together with the 2026 Notes Base Indenture,
the “2026 Notes Indenture”), among the Company, the Guarantors, solely for the purposes of Article III, Section 4.1, Section 4.7, Section 4.8 and Section 4.13 only, RRD Netherlands LLC, and the U.S. Bank Trustee, as trustee and as notes collateral agent (together the “2026 Notes Indenture”), governing the 2026 Notes, and (iii) a Third Supplemental Indenture, dated as of February 7, 2022 (the “2031 Debentures Third Supplemental Indenture” and, collectively with the 2024 Notes Twelfth Supplemental Indenture and the 2026 Notes Second Supplemental Indenture, the “New Supplemental Indentures”), to the Indenture, dated as of November 1, 1990 (the “2031 Debentures Base Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (as successor trustee), as trustee (the “BNY Mellon Trustee” and, collectively with the WF Trustee and US Bank Trustee, the “Trustees”), as supplemented by the Supplemental Indenture, dated as of June 30, 1998 (together with the 2031 Debentures Base Indenture, the “2031 Debentures Indenture”), governing the 2031 Debentures, giving effect to the Proposed Amendments with respect to each series of Debt Securities.
Each New Supplemental Indenture is effective and constitutes a binding agreement between the Company, the Guarantors (where applicable) and the applicable Trustee. However, the Proposed Amendments will not become operative until immediately prior to the consummation of the Merger and will cease to be operative if the Merger is not consummated or, with respect to the 2024 Notes and 2031 Debentures, the consent consideration is not paid to the holders thereof that validly delivered and did not revoke such consents.
The Consent Solicitations were made at the request of Chatham Delta Parent, Inc. (“Parent”) pursuant to the terms of the previously announced Agreement and Plan of Merger (the “Merger Agreement”) entered into on December 14, 2021, by and among the Company, Parent and Chatham Delta Acquisition Sub, Inc. (“Acquisition Sub”). Under the terms of the Merger Agreement, Acquisition Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a direct or indirect wholly owned subsidiary of Parent.
Pursuant to the terms of the Merger Agreement, Parent is responsible for (i) paying all fees and expenses the Company incurs in connection with the Consent Solicitations and (ii) indemnifying the Company from and against any and all losses the Company incurs in connection with the Consent Solicitations.
The foregoing description of the New Supplemental Indentures does not purport to be complete and is qualified in its entirety by reference to each such document. Copies of the 2024 Notes Twelfth Supplemental Indenture, the 2026 Notes Second Supplemental Indenture and the 2031 Debentures Third Supplemental Indenture are filed as Exhibits 4.1, 4.2 and 4.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 8.01. Other Events.
On February 2, 2022, the Company issued a press release announcing the expiration of the Consent Solicitations with respect to the Debt Securities and the extension of the Consent Solicitations with respect to the Company’s 6.500% Notes due 2023 and 6.625% Debentures due 2029. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Use of Forward-Looking Statements
This communication includes certain “forward-looking statements” within the meaning of, and subject to the safe harbor created by, the federal securities laws, including statements related to the proposed Merger. These forward-looking statements are based on the Company’s current expectations, estimates and projections regarding, among other things, the expected date of closing of the Merger and the potential benefits thereof, its business and industry, management’s beliefs and certain assumptions made by the Company, all of which are subject to change. Forward-looking statements often contain words such as “expect,” “anticipate,” “intend,” “aims,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “considered,” “potential,” “estimate,” “continue,” “likely,” “target” or similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. By their nature, forward-looking statements address matters that involve risks and uncertainties because they relate to events and depend upon future circumstances that may or may not occur, such as the consummation of the Merger and the anticipated benefits thereof. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Important risk factors that may cause such a difference include (i) impediments to the completion of the Merger on anticipated terms and timing, including obtaining required stockholder and regulatory approvals and the satisfaction of other conditions to the completion of the Merger; (ii) significant transaction costs associated with the Merger; (iii) potential litigation relating to the Merger, including the effects of any outcomes related thereto; (iv) the risk that disruptions from the Merger will harm the Company’s business, including current plans and operations; (v) the ability of the Company to retain and hire key personnel; (vi) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger; (vii) legislative, regulatory and economic developments affecting the Company’s business; (viii) general economic and market developments and conditions; (ix) the evolving legal, regulatory and tax regimes under which the Company operates; (x) potential business uncertainty, including changes to existing business relationships, during the pendency of the Merger that could affect the Company’s financial performance; (xi) certain restrictions during the pendency of the Merger that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; (xii) continued availability of capital and financing and rating agency actions; (xiii) the ability of affiliates of Chatham Asset Management, LLC to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the Merger; (xiv) the
occurrence of any event, change or other circumstance that could give rise to the termination of the Merger, including in circumstances requiring the Company to pay expense reimbursements to affiliates of Chatham Asset Management, LLC under the Merger Agreement; (xv) unpredictability and severity of catastrophic events, including acts of terrorism, outbreak of war or hostilities, civil unrest, adverse climate or weather events or the COVID-19 pandemic or other public health emergencies, as well as the Company’s response to any of the aforementioned factors; (xvi) competitive responses to the Merger; (xvii) the risks and uncertainties pertaining to the Company’s business, including those detailed under the heading “Risk Factors” and elsewhere in the Company’s public filings with the U.S. Securities and Exchange Commission (the “SEC”); and (xviii) the risks and uncertainties described in the proxy statement filed in connection with the Merger and available from the sources indicated below (the “Proxy Statement”). These risks, as well as other risks associated with the Merger are more fully discussed in the Proxy Statement. While the list of factors presented here is, and the list of factors presented in the Proxy Statement are, considered representative, no such list should be considered to be a complete statement of all risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material impact on the Company’s financial condition, results of operations, credit rating or liquidity or ability to consummate the Merger. These forward-looking statements speak only as of the date they are made, and the Company does not undertake to and disclaims any obligation to publicly release the results of any updates or revisions to these forward-looking statements that may be made to reflect future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Important Additional Information and Where to Find It
In connection with the Merger, the Company has filed with the SEC and mailed to its stockholders the definitive Proxy Statement and may file certain other documents regarding the Merger with the SEC. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND RELATED MATTERS. Investors and stockholders may obtain, free of charge, copies of the Proxy Statement and other relevant documents filed with the SEC by the Company, once such documents have been filed with the SEC, through the website maintained by the SEC at www.sec.gov, through the Company’s investor relations website at investor.rrd.com or by contacting the Company’s investor relations department at the following:
Telephone: 630-322-7111
E-mail: investor.info@rrd.com
Attn.: Johan Nystedt
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| R.R. DONNELLEY & SONS COMPANY | ||
| By: | /s/ Terry D. Peterson | |
| Terry D. Peterson | ||
| Executive Vice President and Chief Financial Officer | ||
Date: February 7, 2022