UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On August 23, 2021, Stewart Information Services Corporation (the “Company”), entered into that certain Stock Purchase Agreement (the “Agreement”) by, between and among Informative Research, a California corporation (“IR”), the shareholders of IR listed on Exhibit A thereto (each a “Shareholder” and collectively, the “Shareholders”), and Sean Buckner, solely in the capacity of the Shareholder Representative (the “Shareholder Representative”), pursuant to which the Company will acquire all of the outstanding capital stock of IR. Following the transaction, IR will continue as a wholly-owned subsidiary of the Company.
Under the terms and conditions of the Agreement, the aggregate consideration to be paid to the Shareholders in the transaction will consist of $192 million in cash, subject to customary adjustments to reflect changes in indebtedness and transaction expenses. The transaction will be funded with the Company’s available resources.
The Company, Shareholders and IR have each made customary representations and warranties and agreed to customary covenants in the Agreement. The Company will obtain a representation and warranty insurance policy to insure against certain losses arising from breaches of, or inaccuracies in, the representations and warranties of the Shareholders and IR in the Agreement. Except with respect to losses arising from any breach of any Fundamental Representations (as defined in the Agreement), Extended Representations (as defined in the Agreement) or in the event of fraud, and subject to an indemnity escrow in the amount of $960,000 and continuing indemnification obligations with respect to certain customary matters, including, among others, certain tax matters, the Company will not have recourse against the Shareholders after the closing date with respect to breaches of the Shareholders’ or IR’s representations and warranties in the Agreement.
The transaction is subject to the satisfaction or waiver of customary closing conditions, including, among others, (a) the accuracy of the representations and warranties of each party (subject to specified materiality standards), (b) compliance by each party in all material respects with their respective agreements, covenants and obligations, (c) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (d) the entry into employment agreements with certain agreed executives of IR.
In addition, the Agreement includes customary covenants for a transaction of this sort, including a five-year non-solicitation covenant of the Shareholders with respect to certain employees or independent contractors and customers of IR and a five-year non-competition agreement not to engage in or with any business engaged directly or indirectly in the business of IR as currently conducted.
The representations, warranties, and covenants contained in the Agreement have been made solely for the benefit of the parties thereto. In addition, such representations, warranties, and covenants (a) have been made only for purposes of the Agreement, (b) are subject to certain materiality qualifications contained in the Agreement which may differ from what may be viewed as material by investors, (c) were made only as of the date of the Agreement or as of the prospective closing date or such other date as is specified in the Agreement, and (d) have been included in the Agreement for the purpose of allocating risk among the contracting parties rather than establishing matters as fact. Accordingly, the Agreement is included with this filing only to provide investors with information regarding the terms of the Agreement, and not to provide investors with any other factual information regarding the parties thereto or their respective businesses. Investors should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties to the Agreement or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Company that is or will be contained in, or incorporated by reference into, the Company’s Proxy Statement, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and other documents that the Company files with the U.S. Securities and Exchange Commission.
The foregoing description of the Agreement and the transactions contemplated thereby do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Agreement attached hereto as Exhibit 10.1.
ITEM 8.01. OTHER EVENTS.
On August 26, 2021, the Company issued a press release announcing the entry into a definitive agreement to acquire IR. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) EXHIBITS
| Exhibit No. | Description |
| 10.1 | Stock Purchase Agreement, dated August 23, 2021, by and among Informative Research, the shareholders of Informative Research listed on Exhibit A thereto, Sean Buckner, Solely in the capacity of the Shareholder Representative thereunder, and Stewart Information Services Corporation.* |
| 99.1 | Press release of Stewart Information Services Corporation August 26, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Annexes, schedules and certain exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Stewart Information Services Corporation hereby undertakes to furnish supplemental copies of any of the omitted annexes, schedules and exhibits upon request by the SEC.
SIGNATURE
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.
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STEWART INFORMATION SERVICES CORPORATION (Registrant) | ||
| By: | /S/ David C. Hisey | |
| (David C. Hisey, Chief Financial Officer, Secretary and Treasurer) | ||
Date: August 26, 2021