FORM 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 20, 2009
Voyager Learning Company
(Exact name of registrant as specified in its charter)
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| Delaware
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001-07680
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36-3580106 |
| (State or other jurisdiction of incorporation)
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(Commission File No.)
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(IRS Employer
Identification No.) |
1800 Valley View Lane, Suite 400, Dallas, TX 75234-8923
(Address of principal executive offices) (Zip Code)
(214) 932-9500
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
þ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Mergers
On June 20, 2009, Voyager Learning Company (“Voyager”) entered into an Agreement and
Plan of Mergers (the “Merger Agreement”) with Cambium-Voyager Holdings, Inc.
(“Holdco”) (formerly known as Cambium Holdings, Inc.), Vowel Acquisition Corp. (“Vowel
Merger Sub”), VSS-Cambium Holdings II Corp. (“Cambium”), Consonant Acquisition Corp.
(“Consonant Merger Sub”) and Vowel Representative, LLC (“Vowel Representative”),
solely in its capacity as stockholders’ representative, pursuant to which, subject to the
satisfaction or waiver of the conditions therein, Holdco will acquire all of the common stock of
each of Cambium and Voyager through the merger of a wholly owned subsidiary of Holdco, Consonant
Merger Sub, with and into Cambium (the “Cambium Merger”), and the simultaneous merger of a
second wholly owned subsidiary of Holdco, Vowel Merger Sub, with and into Voyager (the “Voyager
Merger” and, together with the Cambium Merger, the “Mergers”). Holdco will file a
registration statement to register its shares under the Securities Act of 1933, as amended (the
“Securities Act”), which registration must be declared effective prior to the mailing of a
proxy statement to Voyager’s stockholders in connection with a special stockholder meeting to be
held in order to vote on the Voyager Merger. The board of directors of Holdco will initially
consist of nine directors, five of which (including the chairperson) will be designated by Cambium,
and the remainder of which will be designated by Voyager.
Under the terms of the Merger Agreement, each holder of Voyager common stock outstanding
immediately prior to the effective time of the Mergers will be entitled to receive, for each share
of common stock of Voyager held, merger consideration equal to (i) at the election of the
stockholder, (x) one share of Holdco common stock or (y) $6.50 in cash; plus (ii) an amount in cash
equal to the amount of tax refunds received by Voyager prior to the closing of the Mergers (as
reduced by the amount of the Voyager tax refunds contractually required to be placed in escrow at
closing), divided by the total number of shares of Voyager common stock outstanding as of the
effective time of the Mergers; plus (iii) a contingent value right (“Contingent Value
Right” or “CVR”) to receive cash in an amount equal to the aggregate amount of certain
tax refunds received after the closing of the Mergers and certain other amounts deposited in escrow
on or after the closing date, as reduced by any payments to be made under the escrow agreement,
described below, with respect to agreed contingencies, a working capital adjustment and Vowel
Representative expenses, divided by the total number of shares of Voyager common stock outstanding
as of the effective time of the Mergers. Any amounts payable under the Contingent Value Rights
will be payable periodically commencing nine months after the closing and ending on or about
October 15, 2013 pursuant to the terms of a contingent value rights agreement and an escrow
agreement, each as described below. In the event that the cash elections set forth in clause (i)
above would result in a payout of cash in excess of the maximum amount of cash available for cash
elections at the effective time of the Mergers (i.e., a cash oversubscription), the cash
elections will be subject to proration so that, in the aggregate, the cash consideration payable to
holders of Voyager common stock will not exceed the maximum cash consideration amount. The maximum
amount of cash available for cash election will be $67.5 million, including $25 million to be
contributed by VSS-Cambium Holdings III, LLC, the sole stockholder of Cambium (“Cambium
III”).
As merger consideration, Cambium III will receive 20,454,312 shares of Holdco common stock,
issued at the ascribed value of $6.50 per share, and a warrant to purchase the number of shares of
Holdco common stock determined by a formula set forth in the Merger Agreement. Upon completion of
the Mergers, Cambium III will hold 24,300,466 shares of Holdco common stock, 3,846,154 of which
shares will be purchased immediately prior to the effective time of the Mergers through Cambium
III’s $25 million contribution.
Under the Merger Agreement, Voyager will make reasonable efforts to terminate all outstanding
options to acquire Voyager common stock and all Voyager stock appreciation rights (“SARs”)
prior to completion of the Mergers. Any options to purchase Voyager common stock or Voyager SARs
that have not been terminated will, upon completion of the Mergers, be converted into options to
acquire shares of, or SARs relating to, Holdco common stock, on the same terms and conditions that
applied to the Voyager stock options or the Voyager SARs, including the exercise price, specified
in the related Voyager equity awards.
Under the terms of the Merger Agreement, Vowel Representative will act as representative of
the former Voyager stockholders to enforce post-closing obligations of Holdco, Cambium or their
subsidiaries under the terms of the Merger Agreement and each of the contingent value rights
agreement and the escrow agreement described below, as well as any other transaction documents that
provide rights or benefits to Vowel Representative or to any Voyager stockholder after completion
of the Mergers. Each Voyager stockholder will severally indemnify Vowel Representative against any
liabilities that Vowel Representative may suffer as a result of acting as the stockholders’
representative, which liabilities will be satisfied exclusively from the escrowed funds under the
escrow agreement.
The Merger Agreement places specified restrictions on Voyager’s ability to solicit or pursue
any alternative transaction proposal. The completion of the Mergers is subject to approval of the
Merger Agreement by Voyager stockholders, expiration or termination of any applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other specified closing
conditions. The Merger Agreement contains certain mutual termination rights as well as termination
rights that are specific to each of the parties, and provides that Voyager may be required to pay
to Cambium a termination fee in the amount of $7,500,000, and Cambium may be required to pay to
Voyager a termination fee in the amount of $4,500,000 or $9,000,000, depending on the particular
circumstances in which the Merger Agreement is terminated. In specified circumstances where the
Merger Agreement is terminated and no termination fee is payable by either party, Voyager may be
required to reimburse Cambium’s transaction expenses, up to an amount of $3,000,000. Cambium has
the right to terminate the Merger Agreement at any time, for any reason not otherwise specified in
the Merger Agreement, subject only to its obligation to pay to Voyager a termination fee in the
amount of $4,500,000.
The foregoing description of the Merger Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as
Exhibit 2.1 hereto and incorporated herein by reference. The Merger Agreement is included to
provide investors and security holders with information regarding its terms. It is not intended to
provide any other factual information about Voyager or the other parties thereto. In particular,
the assertions embodied in Voyager’s representations and warranties contained in the Merger
Agreement are qualified by information in the disclosure schedule provided by Voyager and Cambium
in connection with the signing of the Merger Agreement. This disclosure schedule contains
information that modifies, qualifies and creates exceptions to the representations and warranties
set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger
Agreement were used for the purpose of allocating risk between Voyager and Cambium, rather than
establishing matters as facts. Accordingly, investors and security holders should not rely on the
representations and warranties in the Merger Agreement as characterizations of the actual state of
facts about Voyager or Cambium.
Contingent Value Rights Agreement
In connection with the transactions contemplated by the Merger Agreement, Holdco, Vowel
Representative and Wells Fargo Bank, National Association, as rights agent and CVR registrar
(“Rights Agent and Registrar”), will enter into a contingent value rights agreement (the
“CVR Agreement”) which
provides for distribution by the Rights Agent and Registrar of the CVR payment amounts, if
any, received from the escrow agent, as described below. The CVRs represent the right to receive
specified tax refunds, if any, received by Voyager after the completion of the Mergers, and certain
other amounts deposited by Voyager on or after the closing date, as reduced by any payments to be
made under the escrow agreement, described below, with respect to agreed contingencies, a working
capital adjustment and Vowel Representative expenses. The CVRs will not be registered under the
Securities Act, and will be uncertificated and non-transferable, except as permitted under the
terms of the CVR Agreement.
The foregoing description of the CVR Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the form of CVR Agreement, which is
filed as Exhibit 10.1 hereto and incorporated herein by reference.
Escrow Agreement
In connection with the transactions contemplated by the Merger Agreement, Wells Fargo Bank,
National Association, as escrow agent (the “Escrow Agent”), Vowel Representative, Holdco
and Richard Surratt, Chief Executive Officer of Voyager, will enter into an escrow agreement (the
“Escrow Agreement”), pursuant to which the Escrow Agent will administer the following
escrow funds: the CVR Escrow Fund, the Excess Employee Payment Fund and the 280G Escrow Fund (as
such terms are defined in the Escrow Agreement). Under the terms of the Escrow Agreement, (i) the
parties will deposit into the escrow accounts, in addition to other items, the Voyager tax refund
holdback amount and all tax refunds received by Voyager following completion of the Mergers, which
funds will be paid out to former Voyager stockholders in accordance with the terms of the CVR
Agreement, subject to any agreed contingencies, working capital adjustment, expenses to be paid to
Vowel Representative and any funds remaining in the 280G Escrow Fund; (ii) certain excess employee
payments will be deposited into the Excess Employee Payment Fund, which amounts will be paid out to
former Voyager stockholders in accordance with the terms of the CVR Agreement; and (iii) Voyager
will deposit funds into the 280G Escrow Fund to satisfy any potential tax gross-up obligations
incurred by Mr. Surratt in connection with the Mergers. Generally, payments will be made from the
CVR escrow fund, less certain costs incurred, on each of the nine-month and eighteen-month
anniversary of the effective time of the Mergers. To the extent not distributed to Mr. Surratt
within the applicable period specified in the Escrow Agreement, amounts remaining in the 280G
Escrow Fund may, under certain circumstances, be distributed to the Rights Agent and Registrar for
distribution to the holders of the CVRs.
The foregoing description of the Escrow Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the form of Escrow Agreement, which is
filed as Exhibit 10.2 hereto and incorporated herein by reference.
Voting Agreements
In connection with the transactions contemplated by the Merger Agreement, SPO Partners II,
L.P. (“SPO”) and certain SPO related parties and Keystone Group, L.P. (“Keystone”)
and a Keystone related party, each of which is a Voyager stockholder, have each entered into a
voting and support agreement with Holdco and Cambium (the “Voyager Voting and Support
Agreement”), pursuant to which each stockholder has granted a proxy to an affiliate of Cambium
and has undertaken to vote its shares in favor of the Voyager Merger, unless the Merger Agreement
has been terminated.
The foregoing description of the Voyager Voting and Support Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the form of Voyager
Voting and Support Agreement entered into by each of Keystone and SPO and their respective related
parties, which is filed as Exhibit 10.3 hereto and incorporated herein by reference.
Also in connection with the transactions contemplated by the Merger Agreement, Cambium III
entered into a voting and support agreement with Voyager (the “Cambium Voting and Support
Agreement”), pursuant to which Cambium III has undertaken to vote its shares in favor of the
Cambium Merger, unless the Merger Agreement has been terminated.
The foregoing description of the Cambium Voting and Support Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the Cambium Voting and
Support Agreement, which is filed as Exhibit 10.4 hereto and incorporated herein by reference.
Stockholders Agreement
At closing, Holdco, Cambium III and the Vowel Representative will enter into a Stockholders
Agreement (the “Stockholders Agreement”), pursuant to which Cambium III will agree to take
or not take specified actions with respect to the size and composition of the board of directors of
Holdco and its committees. Under the terms of the Stockholders Agreement, Cambium III will have
the right to purchase shares of Holdco common stock if Holdco undertakes to issue shares in
circumstances which are not exempt from these preemptive rights under the Stockholders Agreement.
Cambium III will also have the right, for a period of twenty-four months from the closing date, to
purchase up to the lesser of 7,500,000 or the number of shares of Holdco common stock that can be
purchased for an aggregate purchase price of $20 million, in each case at a price per share equal
to 90% of the volume weighted average price measured over the 10-day trading period immediately
preceding the issuance.
The foregoing description of the Stockholders Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the form of Stockholders Agreement,
which is filed as Exhibit 10.5 hereto and incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(b) Upon completion of the Mergers described in Item 1.01 above, it is contemplated that Richard
Surratt’s employment as President and Chief Executive Officer of Voyager will terminate, and he
will be entitled to receive the severance benefits provided for in his employment terms letter
dated May 8, 2009, which was previously filed as Exhibit 10.4 to Voyager’s quarterly report on Form
10-Q for the quarter ended March 31, 2009, filed with the SEC on
May 11, 2009. Mr. Surratt will serve as a director of Holdco
following the Mergers.
Item 8.01. Other Events.
On June 22, 2009, Voyager issued a press release announcing the signing of the Merger
Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein
by reference.
Also on June 22, 2009, Voyager distributed an e-mail communication from Ron Klausner,
President of Voyager Learning Company, to the employees of Voyager, announcing the contemplated
Mergers. The e-mail communication included employee and customer FAQs and a customer letter. A
copy of the employee e-mail communication, including the employee and customer FAQs and the
customer letter, are attached hereto as Exhibit 99.2 and incorporated herein by reference.
Forward-Looking Statements
Some of the statements contained herein constitute forward-looking statements. These statements
relate to future events including the transaction, our future financial performance and involve
known and unknown risks, uncertainties and other factors that may cause our or our markets’ actual
results, levels of activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements. These risks and other factors you should
consider include, but are not limited to, the ability to obtain regulatory approvals necessary to
complete the transaction, satisfaction of closing conditions in the merger agreement, approval of
the merger agreement by our stockholders, loss of key personnel, success of ongoing product
development, maintaining acceptable margins, the ability to control costs, changes in customer
demands or industry standards, the ability to successfully attract and retain a broad customer base
for our current and future products, K-12 enrollment and demographic trends, the level of
educational and education technology funding, the impact of federal, state and local regulatory
requirements on our business, the impact on our stock price and trading volume as a result of our
common stock being traded over-the-counter, the impact of competition and the risk that our
competitors will seek to capitalize on the risks and uncertainties confronting us, including those
listed above and the uncertainty of economic conditions in general, financial market performance,
and other risks listed under “Risk Factors” in our filings with the Securities and Exchange
Commission. In some cases, you can identify forward- looking statements by terminology such as
“may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential,” “continue,” “projects,” “intends,” “prospects,” “priorities,” or the negative of such
terms or other comparable terminology. These statements are only predictions. Actual events or
results may differ materially. We undertake no obligation to update any of these statements.
Additional Information and Where to Find It
In connection with the proposed Mergers, Holdco will file with the Securities and Exchange
Commission (the “SEC”) a Registration Statement on Form S-4 that will include a proxy
statement of Voyager that also constitutes a prospectus of Holdco. Voyager will mail the proxy
statement/prospectus to each of its stockholders. Holdco and Voyager urge investors and security
holders to read the proxy statement/prospectus regarding the proposed Mergers when it becomes
available because it will contain important information. You may obtain copies of all documents
filed with the SEC regarding this transaction, free of charge, at the SEC’s website (www.sec.gov).
You may also obtain these documents, free of charge, from Voyager’s website
(www.voyagercompany.com) under the heading “Investor Relations” and then under the tab “SEC
Filings.”
Holdco, Voyager, and Cambium and their respective directors, executive officers and various
other members of management and employees may be soliciting proxies from Voyager stockholders in
favor of the Merger Agreement. Information regarding the persons who may, under the rules of the
SEC, be deemed participants in the solicitation of Voyager stockholders in connection with the
proposed mergers will be set forth in the proxy statement/prospectus when it is filed with the SEC.
You can find information about Voyager’s executive officers and directors in its Annual Report on
Form 10-K for the year ended December 31, 2008 filed with the SEC on March 6, 2009. You can obtain
free copies of this document from Voyager by writing or calling: Voyager Learning Company, General
Counsel, 1800 Valley View Lane, Suite 400, Dallas, TX 75234-8923, (214)932-9500. Additional
information regarding the interests of these potential participants will be included in the proxy
statement/prospectus and the other relevant documents filed with the SEC when they become
available.
This communication shall not constitute an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in any jurisdiction in which the
offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of the jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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| Exhibit No. |
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Description |
2.1
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Agreement and Plan of Mergers, dated as of June 20, 2009, by and among Cambium-Voyager
Holdings, Inc. (formerly known as Cambium Holdings, Inc.), Voyager Learning Company,
Vowel Acquisition Corp., VSS-Cambium Holdings II Corp., Consonant Acquisition Corp. and
Vowel Representative, LLC, solely in its capacity as Stockholders’ Representative. |
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10.1
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Form of Contingent Value Rights Agreement to be entered into by and among
Cambium-Voyager Holdings, Inc. (formerly known as Cambium Holdings, Inc.), Vowel
Representative, LLC, solely in its capacity as Stockholders’ Representative, and Wells
Fargo Bank, National Association, as Rights Agent and Initial CVR Registrar. |
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10.2
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Form of Escrow Agreement to be entered into by and among Wells Fargo Bank, National
Association, as Escrow Agent, Vowel Representative, LLC, solely in its capacity as
Stockholders’ Representative, Cambium-Voyager Holdings, Inc. (formerly known as Cambium
Holdings, Inc.), Voyager Learning Company and Richard Surratt. |
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10.3
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Form of Voting and Support Agreement, dated as of June 20, 2009, by and between
Cambium-Voyager Holdings, Inc. (formerly known as Cambium Holdings, Inc.) and certain
stockholders of Voyager Learning Company. |
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10.4
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Voting and Support Agreement, dated as of June 20, 2009, by and between Voyager
Learning Company and VSS-Cambium Holdings III, LLC. |
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10.5
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Form of Stockholders Agreement to be entered into by and among Cambium-Voyager
Holdings, Inc. (formerly known as Cambium Holdings, Inc.), VSS-Cambium Holdings III,
LLC, and Vowel Representative, LLC, solely in its capacity as Stockholders’
Representative. |
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| Exhibit No. |
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Description |
99.1
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Press Release issued by Voyager Learning Company dated June 22, 2009. |
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99.2
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E-mail Communication and Attachments distributed to Voyager Learning Company employees on June 22, 2009. |
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 hereunto duly authorized.
Date: June 22, 2009
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VOYAGER LEARNING COMPANY
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By: |
/s/ Todd W. Buchardt
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Todd W. Buchardt |
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Senior Vice President, General Counsel and
Secretary |
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INDEX TO EXHIBITS
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| Exhibit No. |
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Description |
2.1
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Agreement and Plan of Mergers, dated as of June 20, 2009, by and among Cambium-Voyager
Holdings, Inc. (formerly known as Cambium Holdings, Inc.), Voyager Learning Company,
Vowel Acquisition Corp., VSS-Cambium Holdings II Corp., Consonant Acquisition Corp. and
Vowel Representative, LLC, solely in its capacity as Stockholders’ Representative. |
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10.1
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Form of Contingent Value Rights Agreement to be entered into by and among
Cambium-Voyager Holdings, Inc. (formerly known as Cambium Holdings, Inc.), Vowel
Representative, LLC, solely in its capacity as Stockholders’ Representative, and Wells
Fargo Bank, National Association, as Rights Agent and Initial CVR Registrar. |
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10.2
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Form of Escrow Agreement to be entered into by and among Wells Fargo Bank, National
Association, as Escrow Agent, Vowel Representative, LLC, solely in its capacity as
Stockholders’ Representative, Cambium-Voyager Holdings, Inc. (formerly known as Cambium
Holdings, Inc.), Voyager Learning Company and Richard Surratt. |
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10.3
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Form of Voting and Support Agreement, dated as of June 20, 2009, by and between
Cambium-Voyager Holdings, Inc. (formerly known as Cambium Holdings, Inc.) and certain
stockholders of Voyager Learning Company. |
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10.4
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Voting and Support Agreement, dated as of June 20, 2009, by and between Voyager
Learning Company and VSS-Cambium Holdings III, LLC. |
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10.5
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Form of Stockholders Agreement to be entered into by and among Cambium-Voyager
Holdings, Inc. (formerly known as Cambium Holdings, Inc.), VSS-Cambium Holdings III,
LLC, and Vowel Representative, LLC, solely in its capacity as Stockholders’
Representative. |
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99.1
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Press Release issued by Voyager Learning Company dated June 22, 2009. |
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99.2
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E-mail Communication and Attachments distributed to Voyager Learning Company employees on June 22, 2009. |