UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
June 18, 2007
Date of report (Date of earliest event reported)
L-1 IDENTITY SOLUTIONS, INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 000-21559 04-3320515
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(State or Other (Commission (IRS Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
177 BROAD STREET, STAMFORD, CONNECTICUT 06901
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(Address of principal executive offices) (Zip Code)
(203) 504 - 1100
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(Registrant's telephone number, including area code)
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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):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On June 19, 2007, L-1 Identity Solutions, Inc. (the "Company"), announced that
it had entered into a definitive agreement to acquire McClendon Corporation
("McClendon"). McClendon is a privately held company based in Chantilly,
Virginia that provides technical and professional services primarily to United
States federal government military and intelligence agencies. The acquisition
will be consummated subject to the terms and conditions of an Agreement and Plan
of Merger (the "Merger Agreement"), dated as of June 18, 2007, among McClendon,
the Selling Stockholders (as defined in the Merger Agreement), L-1 Identity
Solutions Operating Company ("L-1 Operating Company"), a wholly owned subsidiary
of the Company, and Patty Hardt, in her capacity as the Selling Stockholders'
representative. Pursuant to the Merger Agreement, the Company will pay merger
consideration consisting of $33 million in cash, subject to a post-closing
working capital adjustment, and $33 million in shares of common stock of the
Company. The number of shares of common stock to be issued will be determined
based on the average closing sales price of the Company's common stock for the
20 trading days prior to the closing date.
The acquisition of McClendon pursuant to the Merger Agreement will be
consummated by the merger of a wholly owned subsidiary of the Company with and
into a newly-formed holding company owning all of the equity securities of
McClendon (the "Merger"), with McClendon subsequently being merged with and into
L-1 Operating Company. The Merger Agreement contains customary representations,
warranties and covenants. The covenants of McClendon and the Selling
Stockholders include, among others, that McClendon and the Selling Stockholders
will not solicit proposals or engage in discussions relating to alternative
business combination transactions. The covenants of the Company include, among
others, that the Company will file with the Securities and Exchange Commission
(the "SEC"), no earlier than August 13, 2007 and no later than 180 days after
the closing date, a registration statement with the SEC pursuant to which,
during the effectiveness of such registration statement, each Selling
Stockholder will be entitled to transfer no more than 5% of the shares of
Company common stock received by such Selling Stockholder in connection with the
Merger per month.
The consummation of the Merger is subject to customary closing conditions,
including absence of governmental restraints, accuracy of representations and
warranties, receipt of required consents and assurances from primary customers,
and continued effectiveness of employment agreements with certain members of
McClendon's senior management. Pursuant to the Merger Agreement, the Company
will deposit 10% of the purchase price paid at closing into escrow, for one
year, to secure the indemnification obligations of the Selling Stockholders. The
Company will be entitled to bring a claim for breaches of representations and
warranties until eighteen months following the closing date (with certain
representations and warranties having a longer survival period), subject to
limitation by an indemnification deductible of $370,000 and an overall liability
cap of 20% of the merger consideration payable to the Selling Stockholders,
subject to certain exceptions.
The foregoing description of the Merger Agreement is qualified in its entirety
by reference to the full text of the Merger Agreement, a copy of which is filed
with this report as Exhibit 2.1 and is incorporated by reference into this
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report. We encourage you to read the Merger Agreement for a more complete
understanding of the Merger.
No representation, warranty, covenant or agreement described above or contained
in the Merger Agreement is, or should be construed as, a representation or
warranty by the Company to any investor or a covenant or agreement of the
Company with any investor. The representations, warranties, covenants and
agreements contained in the Merger Agreement are solely for the benefit of the
Company, McClendon and the Sellers and are qualified by disclosures between the
parties.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
Pursuant to the Merger Agreement, the Company has agreed to issue a number of
shares of Company common stock upon the consummation of the Merger equal to $33
million divided by the average closing sales price of Company common stock for
the 20 trading days prior to the closing of the Merger. These shares will be
issued pursuant to the Merger Agreement in a private placement and without
registration under the Securities Act of 1933, as amended (the "Securities Act")
pursuant to Section 4(2) of the Securities Act and Regulation D promulgated
pursuant thereto ("Regulation D"). The exemption from registration pursuant to
Regulation D was based on, among other things, the receipt of representations
from each Selling Stockholder to the effect that such person is an "accredited
investor" as defined in Rule 501(a) of Regulation D. As described in Item 1.01,
the Company has agreed to file a registration statement with respect to the
resale of the shares of Company common stock issuable as merger consideration.
ITEM 7.01 REGULATION FD DISCLOSURE.
On June 19, 2007, the Company and McClendon issued a joint press release
announcing the execution of the Merger Agreement, as described in Item 1.01
above. A copy of the press release is furnished herewith as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit No. Description
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2.1 Agreement and Plan of Merger, dated as of June 18, 2007,
by and among McClendon Corporation, the Selling
Stockholders, L-1 Identity Solutions, Inc., L-1 Identity
Solutions Operating Company and Patty Hardt, as
Stockholders' Representative.*
99.1 Press Release dated June 19, 2007.
* The schedules and exhibits have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. The Company hereby undertakes to furnish supplementally copies
of any of the omitted schedules or exhibits upon request by the Securities and
Exchange Commission.
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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 hereunto duly authorized.
L-1 IDENTITY SOLUTIONS, INC.
By: /s/ Robert V. LaPenta
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Name: Robert V. LaPenta
Title: Chairman, President and
Chief Executive Officer
Date: June 20, 2007
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EXHIBIT INDEX
Exhibit No. Description
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2.1 Agreement and Plan of Merger, dated as of June 18, 2007,
by and among McClendon Corporation, the Selling
Stockholders, L-1 Identity Solutions, Inc., L-1 Identity
Solutions Operating Company and Patty Hardt, as
Stockholders' Representative.*
99.1 Press Release dated June 19, 2007.
* The schedules and exhibits have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. The Company hereby undertakes to furnish supplementally copies
of any of the omitted schedules or exhibits upon request by the Securities and
Exchange Commission.
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