VWR International, LLC
VWR Corp (Form: PREM14A, Received: 06/02/2017 06:04:26)
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.                      )

 

 

Filed by the Registrant  ☒                            Filed by a party other than the Registrant  ☐

Check the appropriate box:

 

   Preliminary Proxy Statement
   Confidential, for Use of the Commission Only (as permitted by Rule 14a -6(e)(2))
   Definitive Proxy Statement
   Definitive Additional Materials
   Soliciting Material Pursuant to Section 240.14a-12

VWR CORPORATION

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

   No fee required.
   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
   (1)  

Title of each class of securities to which transaction applies:

 

Common Stock, par value $0.01 per share, of VWR Corporation (the “ VWR common stock ”)

   (2)  

Aggregate number of securities to which transaction applies:

 

As of May 24, 2017, 131,798,400 shares of VWR common stock issued and outstanding, 7,286,367 shares of VWR common stock issuable upon the exercise of stock options and 310,190 shares of VWR common stock issuable upon vesting and settlement of restricted stock units.

   (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

The maximum aggregate value was determined based upon the sum of: (i) 131,798,400 shares of VWR common stock issued and outstanding multiplied by $33.25 per share; (ii) options to purchase 7,286,367 shares of VWR common stock with exercise prices less than $33.25 per share multiplied by $9.18 (which is the difference between $33.25 and the weighted average exercise price of $24.07 per share); and (iii) 310,190 shares of VWR common stock issuable upon vesting and settlement of restricted stock units multiplied by $33.25 per share. In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying the sum calculated in the preceding sentence by 0.0001159.

   (4)  

Proposed maximum aggregate value of transaction:

 

$4,459,499,466.56

   (5)  

Total fee paid:

 

$516,856

   Fee paid previously with preliminary materials.

   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
   (1)  

Amount Previously Paid:

 

     

   (2)  

Form, Schedule or Registration Statement No.:

 

     

   (3)  

Filing Party:

 

     

   (4)  

Date Filed:

 

     

 

 

 


Table of Contents

PRELIMINARY PROXY STATEMENT SUBJECT TO COMPLETION, DATED JUNE 1, 2017

 

 

LOGO

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, PA 19087

Dear Fellow Stockholder:

It is my pleasure to invite you to join us at a special meeting of the stockholders of VWR Corporation (“ VWR ,” the “ Company ,” “ we ,” “ our ” or “ us ”), which will be held on [    ], 2017 at [    ], Eastern Daylight Time at [    ] (the “ special meeting ”).

At the special meeting`, holders of our common stock, par value $0.01 per share (the “ VWR common stock ”), will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger (as it may be amended from time to time, the “ merger agreement ”), dated as of May 4, 2017, by and among Avantor, Inc., a Delaware corporation (“ Avantor ”), Vail Acquisition Corp, a Delaware corporation and a wholly-owned subsidiary of Avantor (“ Merger Sub ”), and the Company, relating to the proposed acquisition of the Company by Avantor. Avantor and Merger Sub are affiliates of the private equity investment firm New Mountain Capital L.L.C. Pursuant to the merger agreement, Merger Sub will be merged with and into the Company (the “ merger ”) with the Company continuing as the surviving corporation as a wholly-owned subsidiary of Avantor, and, pursuant to the Merger, each share of VWR common stock issued and outstanding immediately prior to the effective time of the merger (other than shares of VWR common stock held by the Company, Avantor or Merger Sub and shares of VWR common stock held by stockholders who are entitled to demand and properly demand appraisal of their shares of VWR common stock, do not vote in favor of adopting the merger agreement and are entitled to and properly exercise their appraisal rights with respect thereto under Delaware law) will be converted at the effective time of the merger into the right to receive $33.25 in cash and without interest and subject to any applicable withholding taxes. The Board of Directors of the Company (the “ Board ”) has unanimously (i) determined that the transactions contemplated by the merger agreement are fair to and in the best interests of the Company and its stockholders, (ii) approved and declared advisable the merger and the execution, delivery and performance by the Company of the merger agreement and the consummation of the transactions contemplated by the merger agreement, (iii) irrevocably approved for all purposes, to the extent permitted by law, Avantor, Merger Sub and their respective affiliates not to be subject to any “moratorium,” “control share acquisition,” “fair price,” “interested shareholder,” “affiliate transaction,” “business combination,” or other antitakeover laws (including Section 203 of the General Corporation Law of the State of Delaware) of any jurisdiction that may purport to be applicable to the Company, Avantor, Merger Sub or any of their respective affiliates or the merger agreement or the transactions contemplated by the merger agreement with respect to any of the foregoing and (iv) resolved to recommend that the holders of shares of VWR common stock vote in favor of the adoption of the merger agreement and the merger. The Board unanimously recommends that the stockholders of the Company vote “FOR” the proposal to adopt the merger agreement. At the special meeting, stockholders will also be asked to vote on (i) a proposal to approve, on an advisory and non-binding basis, specified compensation that may become payable to the named executive officers of the Company in connection with the merger and (ii) a proposal to approve one or more adjournments of the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement. The Board unanimously recommends that you vote “FOR” each of these proposals.

The enclosed proxy statement describes the merger agreement and the merger and provides specific information concerning the special meeting. In addition, you may obtain information about the Company from documents filed with the Securities and Exchange Commission. We urge you to, and you should, read the entire proxy statement


Table of Contents

carefully, and its appendices, including the merger agreement, as it sets forth the details of the merger agreement and other important information related to the merger.

Your vote is very important regardless of the number of shares of VWR common stock you own . Whether or not you plan to attend the special meeting, please mark, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying postage-paid envelope, or submit your proxy electronically by telephone by calling 1-800-454-8683 or over the Internet at www.proxyvote.com. The merger cannot be completed unless stockholders holding at least a majority of the outstanding shares of VWR common stock entitled to vote thereon affirmatively vote in favor of the proposal to adopt the merger agreement. If you fail to vote “FOR” the adoption of the merger agreement, the effect will be the same as a vote “AGAINST” the adoption of the merger agreement.

While stockholders may exercise their right to vote their shares of VWR common stock in person, we recognize that many stockholders may not be able to attend the special meeting or may wish to have their shares of VWR common stock voted by proxy even if they are able to attend. Accordingly, we have enclosed a proxy card that will enable your shares of VWR common stock to be voted on the matters to be considered at the special meeting regardless of whether you are able to attend. Please mark, sign and date the proxy card to indicate your voting instructions and return it in the enclosed postage-paid envelope. You also may submit your proxy by telephone by calling 1-800-454-8683 or over the Internet at www.proxyvote.com. We have provided instructions on the proxy card for using these convenient services. Submitting a proxy will ensure that your shares of VWR common stock are represented at the special meeting, but will not prevent you from submitting a subsequent proxy to change your voting instructions or from voting your shares of VWR common stock in person if you subsequently choose to attend the special meeting.

If you hold your shares of VWR common stock in “street name” through a brokerage firm, bank, trust or other nominee, you should follow the directions provided by your brokerage firm, bank, trust or other nominee regarding how to instruct your brokerage firm, bank, trust or other nominee to vote your shares of VWR common stock. Without following those instructions or obtaining a legal proxy to vote your shares of VWR common stock through your brokerage firm, bank, trust or other nominee, your shares of VWR common stock will not be voted, which will have the same effect as voting against the proposal to adopt the merger agreement.

If you have any questions or need assistance in voting your shares of VWR common stock, please contact our proxy solicitor, D.F. King & Co., Inc., toll free at 1 (877) 283-0325.

Thank you for your continued trust in VWR and your investment in our business.

Sincerely,

 

LOGO

Manuel Brocke-Benz

Director, President and Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated [                    ], 2017 and is first being mailed to VWR stockholders on or about [                    ], 2017.


Table of Contents

PRELIMINARY PROXY STATEMENT SUBJECT TO COMPLETION, DATED JUNE 1, 2017

 

 

LOGO

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, PA 19087

Notice of 2017 Special Meeting of Stockholders

The special meeting of stockholders of VWR Corporation (“ VWR ” or the “ Company ”) will be held on [                    ], 2017 at [    ] EDT, at [    ] (the “ special meeting ”). Stockholders of record of shares of VWR common stock at the close of business on [                    ], 2017 are entitled to vote at the special meeting. You have received these proxy materials because our Board of Directors (the “ Board ”) is soliciting your proxy to vote your shares of VWR common stock at the special meeting.

The purposes of the special meeting are:

 

  1. To consider and vote on a proposal to adopt the Agreement and Plan of Merger (as it may be amended from time to time, the “ merger agreement ”), dated as of May 4, 2017, by and among Avantor, Inc., a Delaware corporation (“ Avantor ”), Vail Acquisition Corp, a Delaware corporation and a wholly-owned subsidiary of Avantor (“ Merger Sub ”), and the Company, relating to the proposed acquisition of the Company by Avantor. Avantor and Merger Sub are affiliates of the private equity investment firm New Mountain Capital L.L.C. Pursuant to the terms of the merger agreement, Merger Sub will be merged with and into the Company (the “ merger ”) with the Company continuing as the surviving corporation as a wholly-owned subsidiary of Avantor;
  2. To approve, on an advisory and non-binding basis, specified compensation that may become payable to the Company’s named executive officers in connection with the merger; and
  3. To consider and vote on a proposal to approve one or more adjournments of the special meeting, if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if the Company has not obtained, at the time of the special meeting, sufficient affirmative stockholder votes to adopt the merger agreement.

Our Board has fixed the close of business on [                    ], 2017 as the record date for the purpose of determining the stockholders who are entitled to receive notice of, and to vote at, the special meeting and any adjournment or postponement thereof. Only stockholders of record at the close of business on the record date are entitled to notice of, and to vote at, the special meeting and at any adjournment or postponement of such special meeting (unless the Board fixes a new record date for stockholders entitled to receive notice of, and to vote at, any adjournment or postponement of the special meeting in accordance with the merger agreement and the Company’s amended and restated bylaws). Each stockholder entitled to vote at the special meeting is entitled to one vote for each share of VWR common stock held by such stockholder on the record date.

The Board has unanimously (i) determined that the transactions contemplated by the merger agreement (the “ Transactions ”) are fair to and in the best interests of the Company and its stockholders, (ii) approved and declared advisable the merger and the execution, delivery and performance by the Company of the merger agreement and the consummation of the Transactions, (iii) irrevocably approved for all purposes, to the extent permitted by law, Avantor, Merger Sub and their respective affiliates not to be subject to any “moratorium,” “control share acquisition,” “fair price,” “interested shareholder,” “affiliate transaction,” “business combination,” or other antitakeover laws (including Section 203 of the DGCL) of any jurisdiction that may purport to be applicable to the Company, Avantor, Merger Sub or any of their respective affiliates or the merger agreement or the Transactions with respect to any of the foregoing and (iv) resolved to recommend that the holders of shares of VWR common stock vote in favor of the adoption of the merger agreement and the merger.


Table of Contents

The Board unanimously recommends that the VWR stockholders vote “FOR” the proposal to adopt the merger agreement, “FOR” the advisory and non-binding proposal to approve specified compensation that may become payable to the Company’s named executive officers in connection with the merger and “FOR” the proposal to approve one or more adjournments of the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement.

VWR stockholders who do not vote in favor of the proposal to adopt the merger agreement will have the right to seek appraisal of the fair value of their shares of VWR common stock, as determined in accordance with Section 262 of the General Corporation Law of the State of Delaware (the “ DGCL ”), if they deliver a demand for appraisal before the vote is taken on the merger agreement and comply with all the requirements of Delaware law, including Section 262 of the DGCL, which are summarized in the accompanying proxy statement. Section 262 of the DGCL is reproduced in its entirety in Annex D to the accompanying proxy statement and is incorporated therein by reference.

Your vote is important. Whether or not you plan to attend the special meeting in person, please mark, sign, date and return the enclosed proxy card in the accompanying postage-paid envelope, or submit your proxy electronically by telephone by calling 1-800-454-8683 or over the Internet at www.proxyvote.com as promptly as possible to ensure that your shares of VWR common stock are represented at the special meeting. If you receive more than one proxy because you own shares of VWR common stock registered in different names or addresses, each proxy should be submitted. If you fail to vote for the adoption of the merger agreement, the effect will be the same as a vote against the adoption of the merger agreement.

If you attend the special meeting and vote in person by ballot, your vote will revoke any proxy that you have previously submitted. You also may revoke your proxy at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement.

If you hold your shares of VWR common stock in “street name,” you should instruct your bank, brokerage firm, trust or other nominee how to vote your shares of VWR common stock in accordance with the voting instruction form that you will receive from your bank, brokerage firm, trust or other nominee. Your bank, brokerage firm, trust or other nominee cannot vote on any of the proposals, including the proposal to adopt the merger agreement, without your instructions, which would have the same effect as a vote against the proposal to adopt the merger agreement.

On behalf of VWR’s Board of Directors,

 

 

LOGO

George Van Kula

Senior Vice President, Human Resources, General Counsel and Secretary

[                    ], 2017

Radnor, PA


Table of Contents

Your Vote is Important

Whether or not you are able to attend the special meeting in person, please follow the instructions included on the enclosed proxy card and submit your proxy by telephone by calling 1-800-454-8683 or over the Internet at www.proxyvote.com, or mark, sign and date the enclosed proxy card and return it in the postage-paid envelope provided as promptly as practicable. If you have Internet access, the Company encourages you to submit your proxy over the Internet. Submitting a proxy over the Internet, by telephone or by mail will not limit your right to vote in person at the special meeting.  If you attend the special meeting in person or by proxy and abstain from voting, it will have the same effect as a vote against the proposal to adopt the merger agreement, the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and the proposal to approve one or more adjournments of the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement. If you fail to submit a proxy over the Internet, by telephone or by mail and otherwise fail to attend the special meeting and cast your vote in person, or if you hold your shares of VWR common stock in “street name” and fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the proposal to adopt the merger agreement and, assuming a quorum is otherwise present, it will have no effect on the outcome of any vote to approve the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger or the proposal to adjourn the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement.  If you return a properly signed and dated proxy card but do not mark the box showing how you wish to vote, your shares of VWR common stock will be voted “ FOR ” the proposal to adopt the merger agreement, “ FOR ” the approval of the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and “ FOR ” the proposal to adjourn the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement.

Additional Information

For additional information about the merger, assistance in submitting proxies or voting shares of VWR common stock, or to request additional copies of the proxy statement or the enclosed proxy card, please contact the Company’s proxy solicitor at:

D.F. King & Co., Inc.

48 Wall Street

New York, NY 10005

1 (212) 269-5550 (call collect)

1 (877) 283-0325 (toll free)

If your brokerage firm, bank, trust or other nominee holds your shares of VWR common stock in “street name,” you should also contact your brokerage firm, bank, trust or other nominee for additional information.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING TO BE HELD ON [                    ], 2017.

The proxy statement is available in the “Investors” section of the Company’s website at investors.vwr.com under “Financial Information.” The information contained on, or accessible through, the Company’s website is not incorporated in, and does not form a part of, the proxy statement or any other report or document filed by or furnished to the Securities and Exchange Commission by the Company.


Table of Contents

Table of Contents

 

 

Summary Term Sheet

    1  

Questions and Answers about the Merger and the Special Meeting

    10  

Cautionary Factors Regarding Forward-Looking Statements

    17  

The Special Meeting

    19  

Date, Time, Place and Purpose of the Special Meeting

    19  

Record Date and Quorum

    19  

Vote Required for Approval

    19  

Voting and Support Agreement

    20  

Voting and Proxies

    20  

Revocation of Proxies

    21  

Adjournments

    22  

Solicitation of Proxies

    22  

Stockholder List

    22  

Questions and Additional Information

    23  

Proposals Submitted to VWR Stockholders

    24  

The Merger Agreement Proposal

    24  

The Named Executive Officer Merger-Related Compensation Proposal

    24  

The Adjournment Proposal

    25  

The Companies

    26  

The Merger

    27  

Background of the Merger

    27  

Recommendation of the Board and Reasons for the Merger

    32  

Certain Prospective Financial Information

    35  

Opinion of the Company’s Financial Advisor

    37  

Interests of the Company’s Directors and Executive Officers in the Merger

    42  

Financing of the Merger

    50  

Preferred Equity Financing

    50  

Debt Financing

    51  

Income Tax Receivable Agreement

    52  

Delisting and Deregistration of VWR Common Stock

    52  

The Merger Agreement

    53  

U.S. Federal Income Tax Consequences of the Merger

    71  

Regulatory Matters

    74  

Appraisal Rights

    76  

Current Market Price of VWR Common Stock

    80  

Security Ownership of Certain Beneficial Owners and Management

    81  

Future Stockholder Proposals

    83  

Where You Can Find More Information

    84  

Annex A—Agreement and Plan of Merger

    A-1  

Annex B—Voting and Support Agreement

    B-1  

Annex C—Opinion of Merrill Lynch, Pierce, Fenner  & Smith Incorporated

    C-1  

Annex D—Section  262 of the General Corporation Law of the State of Delaware

    D-1  

 

  i  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Summary Term Sheet

 

The following summary highlights information in this proxy statement related to the merger of Vail Acquisition Corp with and into VWR Corporation (the “ merger ”) and may not contain all the information that is important to you. Accordingly, the Company encourages you to read carefully this entire proxy statement, its annexes and the documents referred to in this proxy statement. Each item in this summary includes a page reference directing you to a more complete description of the item in this proxy statement.

In this proxy statement, the terms the “ Company ” and “ VWR ” refer to VWR Corporation, the term “ Avantor ” refers to Avantor, Inc., the term “ Merger Sub ” refers to Vail Acquisition Corp, and the term “ merger agreement ” refers to the Agreement and Plan of Merger, dated as of May 4, 2017, by and among Avantor, Merger Sub and the Company, as such agreement may be amended from time to time.

The Companies (Page 26)

VWR Corporation . VWR is a global independent provider of product and service solutions to laboratory and production customers. With sales in excess of $4.5 billion in 2016, VWR enables science for customers in the pharmaceutical, biotechnology, industrial, education, government and healthcare industries. With more than 160 years of experience, VWR has cultivated a value proposition delivering product choice, operational excellence and differentiated services to improve VWR’s customers’ productivity from research to production. VWR’s differentiated services provide innovative, flexible and customized solutions from scientific research services to custom-manufactured chemical blends. VWR’s dedicated team of more than 10,200 associates is focused on supporting scientists, medical professionals and production engineers to achieve their goals. VWR’s common stock is listed on the NASDAQ Stock Market LLC (“ NASDAQ ”) under the symbol “VWR.”

VWR Corporation

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, PA 19087

Avantor, Inc. Avantor is a global supplier of ultra-high-purity materials for the life sciences and advanced technology markets. Avantor provides performance materials and solutions for the production and research needs of approximately 7,900 customers across the biotechnology, pharmaceutical, medical device, diagnostics, aerospace & defense, and semiconductor industries. Avantor’s product portfolio includes more than 30,000 products that meet increasingly stringent standards across technology driven and highly regulated markets. Avantor manufactures and markets its products around the world under several respected brand names. Avantor’s brands of performance chemistries include the J.T.Baker ® , Macron Fine Chemicals™, Rankem™, BeneSphera™, Puritan Products™, and POCH™ brands. Avantor’s brands of advanced silicones include the NuSil™ and CareSil™ brands.

Avantor, Inc.

3477 Corporate Parkway

Center Valley, PA 18034

Vail Acquisition Corp. Merger Sub is a wholly-owned subsidiary of Avantor, and was formed on May 3, 2017, solely for the purpose of engaging in the transactions contemplated by the merger agreement (the “ Transactions ”) and has not engaged in any business except for activities incidental to its incorporation and in connection with the Transactions and arranging of the financing in connection with the merger.

Vail Acquisition Corp

c/o Avantor, Inc.

3477 Corporate Parkway

Center Valley, PA 18034

Avantor and Merger Sub are affiliated with New Mountain Capital, L.L.C. (“New Mountain”), a New York based investment firm that emphasizes business building and growth. The firm currently manages private equity, public equity and credit funds with approximately $15 billion in aggregate capital commitments.

 

  1   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Summary Term Sheet (continued)

 

 

The Special Meeting (Page 19)

Date, Time and Place . The special meeting of the stockholders of the Company will be held on [                    ], 2017 starting at [                ], Eastern Daylight Time, at [                ] (the “special meeting”).

Purpose . At the special meeting, holders of our commons stock, par value $0.01 per share, of the Company (the “VWR commons stock”) will be asked to consider and vote upon (1) a proposal to adopt the merger agreement, (2) a proposal to approve, on an advisory and non-binding basis, specified compensation that may become payable to the Company’s named executive officers in connection with the merger, and (3) a proposal to approve one or more adjournments of the special meeting, if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if the Company has not obtained, at the time of the special meeting, sufficient affirmative stockholder votes to adopt the merger agreement.

Record Date and Quorum . You are entitled to vote at the special meeting if you owned shares of VWR common stock at the close of business on [                    ], 2017, the record date for determining the stockholders entitled to notice of and to vote at the special meeting. You will have one vote for each share of VWR common stock that you owned on the record date. As of [                    ], 2017 there were [                ] shares of VWR common stock issued and outstanding and entitled to vote. Each share of VWR common stock is entitled to one vote. A majority of the outstanding shares of VWR common stock entitled to vote, present in person or represented by proxy, will constitute a quorum for purposes of the special meeting. In the event that a quorum is not present at the special meeting, the special meeting may be postponed or adjourned as necessary pursuant to the terms of the merger agreement and the amended and restated bylaws of the Company to solicit additional proxies.

Voting and Proxies . Any stockholder of record entitled to vote at the special meeting may submit a proxy by telephone by calling 1-800-454-8683, over the Internet at www.proxyvote.com or by marking, signing, dating and returning the enclosed proxy card by mail. Stockholders of record entitled to vote may also vote in person at the special meeting. If you intend to submit your proxy by telephone or over the Internet, you must do so by 11:59 P.M. Eastern Daylight Time on [                    ], 2017. If you intend to submit your proxy by mail, your completed proxy card must be received no later than [                    ], 2017. Even if you plan to attend the special meeting, to ensure that your shares of VWR common stock are voted, please submit a proxy to vote your shares of VWR common stock by marking, signing, dating and returning the enclosed proxy card or by using the telephone number printed on your proxy card or by using the Internet voting instructions printed on your proxy card.

If you submit your proxy but do not indicate how you wish your shares of VWR common stock to be voted, your shares of VWR common stock will be voted “ FOR ” the proposal to adopt the merger agreement, “ FOR ” the proposal to approve the advisory and non-binding proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger and “ FOR ” the adjournment proposal.

If any of your shares of VWR common stock are held in “street name,” you should instruct your brokerage firm, bank, trust or other nominee on how to vote such shares of VWR common stock by following the instructions provided by your brokerage firm, bank, trust or other nominee. If any of your shares of VWR common stock are held in “street name,” you must obtain a legal proxy from such nominee in order to vote such shares of VWR common stock in person at the special meeting. If you fail to provide your nominee with instructions on how to vote your shares of VWR common stock held in “street name,” your nominee will not be able to vote such shares of VWR common stock at the special meeting.

Vote Required . The adoption of the merger agreement requires the affirmative vote of a majority of the outstanding shares of VWR common stock entitled to vote thereon. If you abstain from voting, fail to submit a proxy over the Internet, by telephone or by mail and also fail to attend the special meeting and cast your vote in person, or, with respect to shares of VWR common stock you hold in “street name,” fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

The approval of the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and, if a quorum is present, the approval of the proposal to adjourn the special meeting, if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if the Company has not obtained, at the time of the special meeting, sufficient affirmative stockholder votes to adopt the merger agreement, require the affirmative vote of a majority of the shares of VWR common stock present in person or represented by proxy at the special meeting and entitled to vote on the subject matter. If a quorum is not present, the approval of the proposal to adjourn the special meeting requires the affirmative vote of the holders of a majority the shares of VWR common stock present in

 

LOGO   2  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Summary Term Sheet (continued)

 

 

person or represented by proxy at the meeting and entitled to vote at the meeting. If you attend the special meeting in person or by proxy and abstain from voting, it will have the same effect as a vote “AGAINST” the non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and the proposal to adjourn the special meeting. If you fail to submit a proxy over the Internet, by telephone or by mail and also fail to attend the special meeting and vote in person, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the outcome of any vote to approve the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger or the proposal to adjourn the special meeting, assuming a quorum is present.

A list of the VWR stockholders entitled to vote at the special meeting will be available for inspection at the special meeting and at Radnor Corporate Center, Building One, Suite 200, 100 Matsonford Road, Radnor, PA 19087 during ordinary business hours, for ten days prior to the special meeting.

Concurrently with the execution and delivery of the merger agreement, Varietal Distribution Holdings, LLC (“ Varietal ”), which held approximately 34.7% of the outstanding shares of VWR common stock as of May 24, 2017, delivered to Avantor and Merger Sub a voting and support agreement (the “ Voting and Support Agreement ”), pursuant to which Varietal agreed, among other things, to vote its shares of VWR common stock in favor of the merger and the adoption of the merger agreement and to grant an irrevocable proxy to Avantor with respect thereto. See “The Special Meeting—Voting and Support Agreement,” on page 20 of this proxy statement, for additional information. A copy of the Voting and Support Agreement is attached hereto as Annex B.

Revocability of Proxy . Any holder of record of shares of VWR common stock may revoke his, her or its proxy at any time before it is voted at the special meeting by any of the following actions:

 

  delivering to the Company’s Corporate Secretary a signed written notice of revocation bearing a date later than the date of the proxy, stating that the proxy is revoked and that is received by the Company’s Corporate Secretary no later than [                    ], 2017;
  attending the special meeting and voting such stockholder’s shares of VWR common stock in person (your attendance at the meeting will not, by itself, revoke your proxy, you must also vote in person at the special meeting);
  signing and delivering a new proxy relating to the same shares of VWR common stock and bearing a later date and that is received no later than [                    ], 2017; or
  submitting a new proxy by telephone or over the Internet by 11:59 Eastern Daylight Time on [                    ], 2017.

Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:

VWR Corporation

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, PA 19087

(610) 386-1700

Attn: Corporate Secretary

If you are a “street name” holder of shares of VWR common stock, you may change your voting instructions by submitting new voting instructions to your brokerage firm, bank, trust or other nominee in accordance with the instructions provided by your brokerage firm, bank, trust or other nominee. You must contact your nominee to obtain instructions as to how to change or revoke your prior voting instructions.

The Merger (Page 27)

The merger agreement provides that at the effective time of the merger (the “ effective time ”), Merger Sub will merge with and into the Company, and the separate corporate existence of Merger Sub will cease and the Company will continue as the surviving corporation (the “ surviving corporation ”) in the merger as a wholly-owned subsidiary of Avantor.

If the merger is completed, each share of VWR common stock issued and outstanding immediately prior to the effective time (other than (i) shares of VWR common stock owned by the Company (excluding any shares of VWR common stock owned by any subsidiary of the Company, which will remain outstanding), Avantor or Merger Sub and (ii) shares as to which appraisal rights have been properly demanded and perfected in accordance with Section 262 of the General Corporation Law of the State of

 

  3   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Summary Term Sheet (continued)

 

 

Delaware (the “ DGCL ”)) will be automatically converted into the right to receive $33.25 in cash and without interest and subject to any applicable withholding taxes (such amount, the “ merger consideration ”).

The merger consideration of $33.25 per share of VWR common stock to be received by VWR stockholders represents:

 

  a 17% premium to the unaffected closing price of VWR common stock on May 2, 2017 (the last trading day prior to the publication of market speculation regarding a potential sale of VWR);
  a 20% premium over the 30 trading day volume weighted average price (“VWAP”) of VWR common stock as of May 2, 2017; and
  a 24% premium over the 90 trading day VWAP of VWR common stock as of May 2, 2017.

The closing sale price of a share of VWR common stock on NASDAQ on [                    ], 2017 was $[            ]. You are encouraged to obtain current market quotations for a share of VWR common stock in connection with voting your shares of VWR common stock.

Upon completion of the merger, shares of VWR common stock will no longer be listed on any stock exchange or quotation system and will only represent the right to receive the merger consideration (or if you are entitled to and have properly demanded appraisal of your shares of VWR common stock in accordance with Section 262 of the DGCL, the fair value of your shares of VWR common stock, together with interest, if any, on the amount determined to be the fair value, subject to Section 262 of the DGCL, as determined by the Delaware Court of Chancery). You will not own any shares of the surviving corporation. A copy of the merger agreement is attached as Annex A to this proxy statement. Please read it carefully and in its entirety.

Recommendation of the Board of Directors and Reasons for the Merger (Page 32)

The Board of Directors of VWR (the “ Board ”) unanimously (i) determined that the Transactions are fair to and in the best interests of the Company and its stockholders, (ii) approved and declared advisable the merger and the execution, delivery and performance by the Company of the merger agreement and the consummation of the Transactions, (iii) irrevocably approved for all purposes, to the extent permitted by law, Avantor and Merger Sub and their respective affiliates not to be subject to any antitakeover laws that may purport to be applicable to the Company, Avantor, Merger Sub or any of their respective affiliates or the merger agreement or the Transactions with respect to any of the foregoing and (iv) resolved to recommend that the holders of shares of VWR common stock vote in favor of the adoption of the merger and merger agreement.  Accordingly, the Board unanimously recommends that holders of shares of VWR common stock vote “FOR” the proposal to adopt the merger agreement at the special meeting.

For the factors considered by the Board in reaching its decision to approve and recommend the merger agreement, see “The Merger—Recommendation of the Board and Reasons for the Merger” beginning on page 32 of this proxy statement.

The Board also unanimously recommends that holders of shares of VWR common stock vote “FOR” the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and “FOR” the proposal to adjourn the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement.

Opinion of the Company’s Financial Advisor (Page 37 and Annex C)

In connection with the merger, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“ BofA Merrill Lynch ”), VWR’s financial advisor, delivered to the Board a written opinion, dated May 4, 2017, as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of shares of VWR common stock, of the merger consideration to be received by such holders in the merger. A copy of the written opinion, dated May 4, 2017, of BofA Merrill Lynch, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex C to this document and is incorporated by reference herein in its entirety. BofA Merrill Lynch provided its opinion to the Board (in its capacity as such) for the benefit and use of the Board in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to VWR or in which VWR might engage or as to the underlying business decision of VWR to proceed with or effect the merger. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and does

 

LOGO   4  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Summary Term Sheet (continued)

 

 

not constitute a recommendation to any stockholder as to how to vote or act in connection with the proposed merger or any related matter.

Conditions to the Merger (Page 67)

The respective obligation of each party to effect the merger is subject to the satisfaction or waiver on or prior to the effective time of certain conditions, including, among other conditions, the following:

 

  no judgment issued by any governmental entity of competent jurisdiction or law or other legal prohibition (each, a “ legal restraint ”) preventing or prohibiting the consummation of the merger being in effect;
  adoption of the merger agreement by holders of VWR common stock constituting the company requisite vote (as defined in the section entitled “The Merger Agreement—The Special Meeting”);
  the applicable waiting period under the the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) and certain foreign antitrust laws have expired or terminated;
  the obtainment of any required clearances, consents, approvals and waivers under any applicable foreign antitrust law;
  obtainment of required approval by the Committee on Foreign Investment in the United States (“ CFIUS ”), if applicable;
  receipt of written notice of no objections under the the Australian Foreign Acquisitions and Takeovers Act 1975 (Cth) (“ FATA ”) or the preclusion of objections by the FATA due to passage of time;
  the representations and warranties of the Company (subject to certain exceptions) being true and correct as of the date of the merger agreement and as of the date on which the closing of the merger occurs (the “ closing date ”) as though made on and as of such date, except to the extent any such representation or warranty expressly relates to a specified date (in which case on and as of such specified date), other than for such failures to be true and correct that would not reasonably be expected to, individually or in the aggregate, have a Company material adverse effect;
  the representations and warranties of Avantor and Merger Sub being true and correct as of the date of the merger agreement and as of the closing date as though made on and as of such date, except to the extent any such representation and warranty expressly relates to a specified date (in which case on and as of such specified date), other than for such failures to be true and correct that would not reasonably be expected to, individually or in the aggregate, prevent or materially delay the consummation of the Transactions or the ability of Avantor or Merger Sub to perform their obligations under the merger agreement in any material respect; and
  the Company, Avantor and Merger Sub having performed, in all material respects, their respective obligations required to be performed at or prior to the closing under the merger agreement.

Go-Shop; No-Solicitation; Competing Takeover Proposals (Page 59)

Under the merger agreement, the Company, its subsidiaries and their respective directors and officers and other representatives are permitted to, among other things, until 11:59 p.m. (New York City time) on June 8, 2017 (the “ go-shop period end-date ”):

 

  directly or indirectly solicit, initiate or encourage any takeover proposal (as defined in the section entitled “The Merger Agreement—VWR Board Recommendation”) or the making thereof, including by way of furnishing non-public information and other access to any person or its representatives pursuant to an acceptable confidentiality agreement provided that prior to or substantially concurrently with the time it is provided to such other person (and in any event within 24 hours), the Company will make available to Avantor any material non-public information with respect to the Company or its subsidiaries furnished to such other person not previously furnished to Avantor; and
  directly or indirectly participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate the making of any proposal that constitutes, or would reasonably be expected to lead to, any takeover proposal.

With respect to any person other than an excluded party (as defined in the section entitled “The Merger Agreement—VWR Board Recommendation”), beginning on the date immediately following the go-shop period end-date, the Company, its subsidiaries and their respective directors and officers will not, and the Company will direct its and its subsidiaries’ other representatives not to:

 

  directly or indirectly solicit, initiate or knowingly encourage or facilitate any inquiries, proposals or offers with respect to or that would reasonably be expected to lead to, or the submission of, any takeover proposal;
  execute or enter into any agreement or understanding with respect to any takeover proposal;

 

  5   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Summary Term Sheet (continued)

 

 

  directly or indirectly participate in any discussions or negotiations regarding, or furnish to any party any information with respect to, or take any other action to facilitate the making of any proposal that constitutes, or would reasonably be expected to lead to, any takeover proposal;
  take any action to make the provisions of any applicable law or any restrictive provision of any applicable anti-takeover provision in the Company’s organizational documents inapplicable to any transactions contemplated by a takeover proposal; or
  authorize, commit or agree to do any of the foregoing.

Except as expressly permitted by the merger agreement, beginning on the date immediately following the go-shop period end-date, the Company will, and will cause its subsidiaries and its and their respective representatives to, except with respect to any excluded party immediately:

 

  cease all communications, solicitations, discussions and negotiations regarding any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, a takeover proposal or otherwise in connection with a takeover proposal or potential takeover proposal;
  request the prompt return or destruction of all confidential information previously furnished to any party within the last six months for the purposes of evaluating a possible takeover proposal; and
  terminate access to any physical or electronic data rooms relating to a possible takeover proposal.

Notwithstanding anything to the contrary contained in the merger agreement, prior to obtaining the company requisite vote and after the go-shop period end-date, in response to an unsolicited bona fide takeover proposal, or a takeover proposal from an excluded party, in each case that did not result from a material breach of the foregoing, and that the Board determines in good faith, after consultation with its outside counsel and financial advisor, constitutes or would reasonably be expected to lead to a superior company proposal (as defined in the section entitled “The Merger Agreement—VWR Board Recommendation”) (such proposal, a “ qualifying company takeover proposal ”) and the failure to take any such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law, the Company may:

 

  furnish non-public information and other access to the party making such qualifying company takeover proposal and its representatives pursuant to an acceptable confidentiality agreement so long as the Company also provides Avantor, in accordance with the terms of its confidentiality agreement and substantially concurrently with the time such information or access is provided to such party (and in any event within 24 hours), any material non-public information or access with respect to the Company or its subsidiaries furnished to such other party that was not previously furnished to Avantor; and
  enter into or otherwise participate in discussions or negotiations with such party and its representatives regarding such qualifying company takeover proposal, including soliciting, encouraging and facilitating the making of a revised qualifying company takeover proposal.

Termination of the Merger Agreement (Page 68)

The Company, Merger Sub and Avantor may terminate the merger agreement by mutual written consent at any time before the closing date. In addition, either Avantor or the Company may terminate the merger agreement at any time before the closing date if:

 

  if the closing date has not occurred on or before the outside date (an “ outside date termination ”) provided that this right to terminate the merger agreement will not be available to any party whose material breach of the merger agreement has been the primary cause of, or resulted in, the failure of the merger to occur on or prior to such date; provided further, however, that if the conditions relating to the (i) expiration or termination of the applicable waiting period under the HSR Act and certain foreign antitrust laws, (ii) obtainment of any required clearances, consents, approvals and waivers under any applicable foreign antitrust law, (iii) obtainment of required approvals by CFIUS, if applicable and (iv) receipt of written notice of no objections under the FATA or the preclusion of objections under the FATA due to passage of time have not been satisfied or waived as of the outside date, then the outside date will automatically extend, without any action on the part of Company, Merger Sub or Avantor, to the date that is three months after the outside date;
  if CFIUS notifies Avantor or the Company in writing that CFIUS intends to send a report to the President of the United States for decision on the matter recommending that the Transactions be suspended or prohibited or the U.S. Department of Defense, Defense Security Service (“ DSS ”) refuses to accept any remedial actions whatsoever to mitigate foreign ownership, control or influence;

 

LOGO   6  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Summary Term Sheet (continued)

 

 

  if any legal restraint permanently preventing or prohibiting the merger is in effect and becomes final and non-appealable; provided that the party seeking to terminate this Agreement pursuant to this clause complies in all material respects with its obligations relating to such legal restraint (treating Avantor and Merger Sub as one party); or
  the approval by the stockholders of the Company required for the consummation of the merger is not obtained by reason of the failure to obtain the company requisite vote at the special meeting (or any adjournments or postponements thereof) at which the merger is voted upon (a “ vote down termination ”).

Avantor may also terminate the merger agreement if:

 

  the Company breaches or fails to perform any of its representations, warranties or covenants contained in the merger agreement, which breach or failure to perform would give rise to the failure of a condition set forth in the merger agreement and cannot be or has not been cured prior to the earlier of (x) 30 days after the giving of written notice to the Company of such breach and (y) the second business day prior to the outside date (provided that Avantor and Merger Sub are not then in material breach of any representation, warranty or covenant contained in the merger agreement) (a “ Company breach termination ”); or
  prior to the date of the special meeting an adverse recommendation change (as defined in the section entitled “The Merger Agreement—VWR Board Recommendation”) has occurred;

The Company may also terminate the merger agreement if:

 

  Avantor or Merger Sub breaches or fails to perform any of its representations, warranties or covenants contained in the merger agreement, which breach or failure to perform would give rise to the failure of a condition set forth in the merger agreement and cannot be or has not been cured prior to the earlier of (x) 30 days after the giving of written notice to Avantor or Merger Sub of such breach and (y) the second business day prior to the outside date (provided that the Company is not then in material breach of any representation, warranty or covenant contained in the merger agreement);
  (i) the Board has received a superior company proposal that did not result from a breach of the Company’s obligations under the go-shop and non-solicitation provisions of the merger agreement, (ii) the Company has complied with its obligations with respect to the provisions of the merger agreement relating to an adverse recommendation change and (iii) the Company has paid, or simultaneously with the termination of the merger agreement pays, the Company termination fee; or
  (i) all of the conditions precedent to Avantor and Merger Sub’s respective obligation to consummate the merger have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the effective time but subject to such conditions being capable of being satisfied at the effective time), (ii) Avantor or Merger Sub fail to complete the closing by the date the closing is required to have occurred pursuant to the merger agreement, (iii) the Company has delivered an written notice to Avantor confirming that, if the financing is funded, it stands ready, willing and able to consummate the Transactions and (iv) Avantor and Merger Sub fail to consummate the merger within two business days following delivery of such written confirmation to Avantor.

Termination Fees and Expenses (Page 68)

The Company has agreed to pay Avantor or its designee a fee of $85 million if the merger agreement is terminated during the go-shop period or after the go-shop period in connection with a takeover proposal (as described in “The Merger Agreement—VWR Board Recommendation,” but substituting “50%” for each reference to “20%”) from an excluded party, or, otherwise, $170 million if the merger agreement is terminated under certain other circumstances. Avantor has agreed to pay the Company $300 million in cash upon the termination of the merger agreement under certain circumstances.

Except as expressly set forth in the merger agreement, all fees and expenses incurred in connection with the merger agreement, the Transactions will be paid by the party incurring such fees or expenses, whether or not the merger is consummated.

Interests of the Company’s Directors and Executive Officers in the Merger (Page 42)

In considering the recommendation of the Board with respect to the merger agreement and the merger, you should be aware that the Company’s executive officers and directors have economic interests in the merger that are different from, or in addition to, those of VWR stockholders generally. These interests may create potential conflicts of interest. The Board was aware of and

 

  7   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Summary Term Sheet (continued)

 

 

considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger and in reaching its determination that the Transactions are fair to and in the best interests of the Company and its stockholders, and decision to approve and declare advisable the merger agreement and the merger. These material interests are summarized below.

 

  the receipt of payments and benefits by executive officers under individual employment arrangements that were in place prior to the execution of the merger agreement upon certain types of terminations of employment that may occur in connection with the merger;
  the full accelerated vesting of VWR equity awards upon the effective time consistent with the terms of the merger agreement;
  retention bonuses and gross-up payments to be paid by the Company to certain of its executive officers; and
  continued indemnification rights in favor of directors and officers of the Company.

Financing of the Merger (Page 50)

We anticipate that the total funds needed to complete the Transactions, including the refinancing of our existing indebtedness, will be approximately $6.6 billion, which will be funded by a combination of preferred equity financing and debt financing, together with available cash on hand at each of Avantor and, after consummation of the merger, the Company. This amount includes the funds needed to (1) pay stockholders the amounts due under the merger agreement, (2) make payments in respect of VWR’s outstanding equity-based awards and existing TRA (as defined in the subsection entitled “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger—Income Tax Receivable Agreement” beginning on page 52 of this proxy statement), as applicable, pursuant to the merger agreement and (3) pay all fees and expenses payable by Avantor and Merger Sub under the merger agreement. In connection with the Transactions, (a) Avantor and Vail Holdco Corp., a Delaware corporation (“ Vail Holdco ”) and the entity that will be the direct parent of Avantor (“ Issuer ”) have obtained preferred equity financing commitments of $2.65 billion from Broad Street Principal Investments, L.L.C. (“ BSPI ”), an affiliate of Goldman Sachs & Co. LLC and an affiliate of a fund that has been invested in VWR since prior to its initial public offering and (b) Avantor has obtained debt financing commitments of $7.75 billion from certain debt financing parties (in each case, pursuant to the terms and conditions as described further under “The Merger—Financing of the Merger” beginning on page 50 of this proxy statement). The merger is not conditioned on Avantor’s or Merger Sub’s ability to obtain preferred equity financing or debt financing.

Regulatory Matters (Page 74)

Under the merger agreement, the merger cannot be completed until, among other things,

 

  the applicable waiting periods under the HSR Act and certain foreign antitrust laws have expired or terminated;
  the obtainment of any required clearances, consents, approvals and waivers under any applicable foreign antitrust law;
  the obtainment of required approval by CFIUS, if applicable; and
  the receipt of written notice of no objections under the FATA or the preclusion of objections by the FATA due to passage of time.

U.S. Federal Income Tax Consequences of the Merger (Page 71)

The receipt of cash in exchange for shares of VWR common stock pursuant to the merger will generally be a taxable transaction for U.S. federal income tax purposes. Stockholders will generally recognize gain or loss equal to the difference, if any, between the amount of cash received and the adjusted tax basis of the shares of VWR common stock surrendered. VWR stockholders who are U.S. Holders (as defined in the section entitled “U.S. Federal Income Tax Consequences of the Merger” beginning on page 71 of this proxy statement) will generally be subject to U.S. federal income tax on any gain recognized in connection with the merger. VWR stockholders who are Non-U.S. Holders (as defined in the section entitled “U.S. Federal Income Tax Consequences of the Merger” beginning on page 71 of this proxy statement) will not generally be subject to U.S. federal income tax on any gain recognized in connection with the merger unless the stockholder has certain connections to the United States. The tax consequences of the merger to VWR stockholders will depend upon their particular circumstances. VWR stockholders should consult their own tax advisors to determine the tax consequences of the merger to them, as well as tax consequences arising under the laws of any state, local or foreign jurisdiction.

Appraisal Rights (Page 76)

Under Delaware law, if the merger is completed, VWR stockholders who do not vote in favor of adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares of VWR common stock as determined by the Delaware Court

 

LOGO   8  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Summary Term Sheet (continued)

 

 

of Chancery, but only if they submit a written demand for such an appraisal prior to the vote on the merger agreement, perfect their appraisal rights by complying with all of the required Delaware law procedures, which are summarized in this proxy statement, and are entitled to maintain a judicial proceeding for appraisal under Section 262 of the DGCL. Section 262 of the DGCL is attached as Annex D to this proxy statement. Please read it carefully and in its entirety.

Treatment of Shares of VWR Common Stock and Outstanding Equity Awards (Page 43)

Stock Options . Unless otherwise agreed to by the parties, pursuant to the merger agreement and consistent with the terms of VWR’s 2014 Equity Incentive Plan (the “ company equity plan ”), each VWR stock option that is outstanding and unexercised immediately prior to the effective time will become fully vested and will be cancelled and converted into the right to receive an amount in cash determined by multiplying (i) the excess of the merger consideration, if any, over the exercise price per share of VWR common stock underlying such stock option by (ii) the number of shares of VWR common stock subject to such stock option immediately prior to the effective time; provided that any VWR stock option with an exercise price per share of VWR common stock underlying such stock option that equals or exceeds the merger consideration will be cancelled without the payment of consideration.

Restricted Stock Units.  Unless otherwise agreed to by the parties, pursuant to the merger agreement and consistent with the terms of the company equity plan, each restricted stock unit (“ RSU ”) that is outstanding and unvested immediately prior to the effective time will be converted into a vested right to receive cash in an amount equal to the merger consideration.

Consummation of the Merger

We currently expect the merger to be completed in the third quarter of 2017. However, the Company cannot predict the exact timing of the consummation of the merger or whether the merger will be consummated at all. In order to consummate the merger, VWR stockholders must vote to adopt the merger agreement at the special meeting and the other closing conditions under the merger agreement, including receipt of certain regulatory approvals, must be satisfied or, to the extent legally permitted, waived.

 

  9   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Questions and Answers

About the Merger and the Special Meeting

 

The following questions and answers address briefly some questions you may have regarding the merger agreement, the merger and the special meeting. These questions and answers may not address all questions that may be important to you as a holder of shares of VWR common stock. For important additional information, please refer to the more detailed discussion contained elsewhere or incorporated by reference into this proxy statement, the annexes to this proxy statement and the documents referred to in this proxy statement.

 

Q: Why am I receiving these proxy materials?

 

A: You are receiving this proxy statement and proxy card in connection with the solicitation of proxies by the Board because you were a stockholder of VWR as of [                    ], 2017, the record date for the special meeting. To complete the merger, VWR stockholders holding a majority of the outstanding shares of VWR common stock as of the record date must vote to adopt the merger agreement. A copy of the merger agreement is attached to this proxy statement as Annex A . The Company will submit the merger agreement to its stockholders for adoption at the special meeting described in this proxy statement. For more information, read the section entitled “The Special Meeting” beginning on page 19 of this proxy statement.

You are also being asked to vote to approve the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and the proposal to approve one or more adjournments of the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement.

This proxy statement, which you should read carefully, contains important information about the merger, the merger agreement and the special meeting and the matters to be voted on thereat. The enclosed materials allow you to submit a proxy to vote your shares of VWR common stock without attending the special meeting and to ensure that your shares of VWR common stock are represented and voted at the special meeting.

Your vote is very important. Even if you plan to attend the special meeting, we encourage you to submit a proxy as soon as possible.

 

 

Q: What is the proposed transaction?

 

A: The proposed transaction is the acquisition of the Company by Avantor pursuant to the merger agreement. If the proposal to adopt the merger agreement is approved by our stockholders and the other closing conditions under the merger agreement have been satisfied or waived, subject to the terms and conditions of the merger agreement, Merger Sub, a wholly-owned subsidiary of Avantor, will be merged with and into the Company. The Company will be the surviving corporation in the merger and will continue as a wholly-owned subsidiary of Avantor.

 

 

Q: What will happen to the Company generally as a result of the merger?

 

A: If the merger is completed, the Company will cease to be an independent public company and will be wholly-owned by Avantor. As a result, you will no longer have any ownership interest in the Company. Upon completion of the merger, shares of VWR common stock will no longer be listed on any stock exchange or quotation system, including NASDAQ. In addition, following the completion of the merger, the registration of VWR common stock and the Company’s reporting obligations under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), will be terminated.

 

 

Q: What will happen to my shares of VWR common stock as a result of the merger?

 

A: If the merger is completed, each share of VWR common stock that you hold immediately prior to the effective time will be converted into the right to receive $33.25 in cash and without interest and subject to any applicable withholding taxes. This does not apply to shares of VWR common stock held by any VWR stockholders who are entitled to and who have properly demanded and perfected their appraisal rights in accordance with Section 262 of the DGCL as more fully described in the section entitled “Appraisal Rights” beginning on page 76 of this proxy statement.

 

LOGO   10  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Questions and Answers About the Merger and the Special Meeting (continued)

 

 

 

 

Q: How does the merger consideration compare to the market price of VWR common stock?

 

A: The merger consideration of $33.25 per share to be received by VWR stockholders represents:

 

    a 17% premium to the unaffected closing price of VWR common stock on May 2, 2017 (the last trading day prior to the publication of market speculation regarding a potential sale of VWR);
    a 20% premium over the 30 trading day VWAP of VWR common stock as of May 2, 2017; and
    a 24% premium over the 90 trading day VWAP of VWR common stock as of May 2, 2017.

The closing sale price of a share of VWR common stock on NASDAQ on [                    ], 2017 was $[            ]. You are encouraged to obtain current market quotations for a share of VWR common stock in connection with voting your shares of VWR common stock.

 

 

Q: When is the merger expected to be completed?

 

A: We currently expect the merger to be completed in the third quarter of 2017. However, the merger is subject to various closing conditions, including VWR stockholder and regulatory approvals, and it is possible that the failure to timely meet these closing conditions or other factors outside of the Company’s control could delay the completion of the merger. The Company cannot assure you that it will complete the merger on this schedule or at all.

 

 

Q: When and where will the special meeting be held?

 

A: The special meeting will be held on [                    ], 2017 starting at [                    ], Eastern Daylight Time, at [                    ].

 

 

Q: What are the proposals that will be voted on at the special meeting?

 

A: You will be asked to consider and vote on (1) a proposal to adopt the merger agreement, (2) a proposal to approve, on an advisory and non-binding basis, specified compensation that may become payable to the Company’s named executive officers in connection with the merger and (3) a proposal to approve one or more adjournments of the special meeting, if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if the Company has not obtained, at the time of the special meeting, sufficient affirmative stockholder votes to adopt the merger agreement.

 

 

Q: How does the Board recommend that I vote on the proposals?

 

A: The Board unanimously determined that the Transactions are fair to and in the best interests of the Company and its stockholders and approved and declared advisable the merger and the merger agreement. Thus, the Board unanimously recommends that you vote “FOR” the proposal to adopt the merger agreement. For more information, read the section entitled “The Merger—Recommendation of the Board and Reasons for the Merger” beginning on page 32 of this proxy statement. The Board also unanimously recommends that you vote “FOR” the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and “FOR” the proposal to adjourn the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement.

 

 

Q: What happens if the merger is not completed for any reason?

 

A: If the merger is not completed for any reason, VWR stockholders will not receive any payment for their shares of VWR common stock in connection with the merger. Instead, the Company will remain a stand-alone public company, and shares of VWR common stock will continue to be listed and traded on NASDAQ. Under specified circumstances, the Company may be required to pay Avantor a termination fee, as described under “The Merger Agreement—Termination Fees and Expenses” beginning on page 68 of this proxy statement.

 

 

Q: What will happen if stockholders do not approve the advisory and non-binding proposal on executive compensation that may become payable to the Company’s named executive officers in connection with the merger?

 

A:

The approval of the advisory and non-binding proposal on executive compensation that may become payable to the Company’s named executive officers in connection with the merger is not a condition to the completion of the merger. The vote on this proposal is an advisory vote and will not be binding on the Company or Avantor. If the merger agreement is

 

  11   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Questions and Answers About the Merger and the Special Meeting (continued)

 

 

approved by the stockholders and completed, the merger-related compensation may be paid to the Company’s named executive officers even if stockholders do not approve this proposal.

 

 

Q: Who is entitled to attend and vote at the special meeting?

 

A: The record date for the special meeting is [                    ], 2017. If you are the record owner of shares of VWR common stock as of the close of business on the record date, you are entitled to notice of, and to vote at, the special meeting or any adjournment of the special meeting. As of the record date, there were approximately [            ] shares of VWR common stock issued and outstanding held collectively by approximately [            ] stockholders of record. If you hold your shares of VWR common stock in “street name” you must obtain and present a proxy from your brokerage firm, bank, trust or other nominee in order to attend and vote your shares of VWR common stock in person at the special meeting.

 

 

Q: How many votes are required to adopt the merger agreement?

 

A: Under Delaware law, stockholders holding at least a majority of the outstanding shares of VWR common stock entitled to vote thereon must affirmatively vote “FOR” the proposal to adopt the merger agreement.

 

 

Q: Are there any stockholders who have already committed to vote in favor of the merger?

 

A: Yes. Varietal, which held approximately 34.7% of the outstanding shares of VWR common stock as of May 24, 2017, executed the Voting and Support Agreement with Avantor and Merger Sub, pursuant to which it agreed, among other things and subject to certain limitations, to vote the Varietal Securities (as described under “The Special Meeting—Voting and Support Agreement,” on page 20) in favor of the merger and the adoption of the merger agreement and to grant an irrevocable proxy to Avantor with respect thereto. See “The Special Meeting—Voting and Support Agreement,” on page 20, for additional information.

 

 

Q: How are votes counted?

 

A: Votes will be counted by the inspector of election appointed by the Company for the special meeting. For the proposal to adopt the merger agreement, you may vote “FOR” , “AGAINST” or “ABSTAIN.” If you abstain from voting, fail to submit a proxy, or if you hold your shares of VWR common stock in “street name” and fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the proposal to adopt the merger agreement.

The approval of the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and, if a quorum is present, the approval of the proposal to adjourn the special meeting if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if the Company has not obtained, at the time of the special meeting, sufficient affirmative stockholder votes to adopt the merger agreement, require the affirmative vote of a majority of the shares of VWR common stock present in person or represented by proxy at the special meeting and entitled to vote on the subject matter. If a quorum is not present, the approval of the proposal to adjourn the special meeting requires the affirmative vote of the holders of a majority of the shares of VWR common stock present in person or represented by proxy at the meeting and entitled to vote at the meeting. If you attend the special meeting in person or by proxy and abstain from voting, it will have the same effect as a vote against the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and the proposal to adjourn the special meeting. If you fail to attend the special meeting in person or by proxy, or if you hold your shares of VWR common stock in “street name” and fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the outcome of any vote to approve the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger or the proposal to adjourn the special meeting.

 

 

Q: What is a quorum?

 

A: A quorum will be present if holders of a majority of the shares of VWR common stock outstanding and entitled to vote are present in person or represented by proxy at the special meeting. If a quorum is not present at the special meeting, the special meeting may be adjourned or postponed from time to time until a quorum is obtained in accordance with the merger agreement and the Company’s amended and restated bylaws.

 

LOGO   12  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Questions and Answers About the Merger and the Special Meeting (continued)

 

 

If you mark, sign, date and return a proxy card (or otherwise properly submit a proxy over the Internet or by telephone) but abstain or fail to provide voting instructions on any of the proposals listed on the proxy card, your shares of VWR common stock will be counted for purpose of determining whether a quorum is present at the special meeting.

If your shares of VWR common stock are held in “street name” by your brokerage firm, bank, trust or other nominee and you do not obtain a proxy from your broker or other nominee and attend the special meeting in person or do not instruct the nominee how to vote your shares of VWR common stock, these shares of VWR common stock will not be voted at the special meeting, nor will they be counted for purposes of determining whether a quorum is present for the transaction of business at the special meeting.

 

 

Q: What do I need to do now?

 

A: After carefully reading and considering the information contained in this proxy statement, including the annexes and the other documents referred to in this proxy statement, please vote your shares of VWR common stock as described below. You have one vote for each share of VWR common stock you own as of the record date.

 

 

Q: How do I vote if I am a stockholder of record?

 

A: You may:

 

    submit a proxy by telephone by calling 1-800-454-8683 and following the telephone voting instructions printed on your proxy card;
    submit a proxy over the Internet at www.proxyvote.com and following the Internet voting instructions printed on your proxy card;
    submit a proxy by marking, signing and dating the enclosed proxy card and each additional proxy card you receive from the Company and returning each proxy card in its accompanying postage-paid envelope; or
    vote your shares of VWR common stock in person by appearing and casting your vote at the special meeting.

If you are submitting a proxy by telephone or over the Internet, your voting instructions must be received by 11:59 p.m. Eastern Daylight Time on [                    ], 2017. If you are submitting a proxy by mail, your completed proxy card must be received no later than [                    ], 2017.

Submitting a proxy by telephone over the Internet, or by mail will not prevent you from voting in person at the special meeting. You are encouraged to submit a proxy by telephone, over the Internet or by mail even if you plan to attend the special meeting in person, to ensure that your shares of VWR common stock are represented at the special meeting.

If you return a properly signed and dated proxy card but do not mark the box showing how you wish to have your shares of VWR common stock voted, your shares of VWR common stock will be voted “ FOR ” the proposal to adopt the merger agreement, “ FOR ” the approval of the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and “ FOR ” the proposal to adjourn the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement. With respect to any other matter that properly comes before the special meeting, shares of VWR common stock represented by proxies received by the Company will be voted with respect to such matter in accordance with the judgment of the persons named as attorneys-in-fact in the proxies.

 

 

Q: How do I vote if my shares of VWR common stock are held by my brokerage firm, bank, trust or other nominee?

 

A:

If your shares of VWR common stock are held in a brokerage account or by another nominee, such as a bank or trust, then the brokerage firm, bank, trust or other nominee is considered to be the stockholder of record with respect to those shares of VWR common stock. However, you still are considered to be the beneficial owner of those shares of VWR common stock, with your shares of VWR common stock being held in “street name.” “Street name” holders cannot vote their shares of VWR common stock directly and must instead instruct the brokerage firm, bank, trust or other nominee how to vote their shares of VWR common stock. Your brokerage firm, bank, trust or other nominee will only be permitted to vote your shares of VWR common stock for you at the special meeting if you instruct it how to vote. Therefore, it is important that you promptly follow the directions provided by your brokerage firm, bank, trust or other nominee regarding how to instruct it to vote your shares of VWR common stock. If you wish to vote your shares of VWR common stock held in “street name” in person at the special meeting, you must obtain, and present at the special meeting, a proxy from your brokerage firm, bank, trust or other nominee authorizing you to vote such shares of VWR common stock at the special meeting.

 

  13   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Questions and Answers About the Merger and the Special Meeting (continued)

 

 

Failure to obtain a proxy from your brokerage firm, bank, trust or other nominee authorizing you to vote at the special meeting and to instruct your brokerage firm, bank, trust or other nominee how to vote your shares of VWR common stock will have the same effect as voting “AGAINST” the proposal to adopt the merger agreement but will have no effect on the outcome of any vote to approve the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger or the proposal to adjourn the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement.

In addition, because any shares of VWR common stock you may hold in “street name” will be deemed to be held by a different stockholder than any shares of VWR common stock you hold of record, shares of VWR common stock held in “street name” will not be combined for voting purposes with shares of VWR common stock you hold of record. To be sure your shares of VWR common stock are represented and voted at the special meeting, you should instruct your brokerage firm, bank, trust or other nominee on how to vote your shares of VWR common stock held in “street name.”

 

 

Q: What does it mean if I receive more than one proxy?

 

A: If you receive more than one proxy, it means that you hold shares of VWR common stock that are registered in more than one account. For example, if you own your shares of VWR common stock in various registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and you will need to mark, sign, date and return, a separate proxy card for those shares of VWR common stock because they are held in a different form of record ownership. Therefore, to ensure that all of your shares of VWR common stock are voted, you will need to mark, sign, date and return each proxy card you receive or submit a proxy by telephone or over the Internet for each proxy card you receive by using the different control number(s) on each proxy card.

 

 

Q: May I change my vote or revoke my proxy after I have delivered my proxy?

 

A: Yes. If you are a stockholder of record of shares of VWR common stock, you have the right to change or revoke your proxy before the vote is taken at the special meeting:

 

    by delivering to the Company’s Corporate Secretary a signed written notice of revocation bearing a date later than the date of the proxy, stating that the proxy is revoked and that is received by the Company’s Corporate Secretary no later than [                    ], 2017;
    by attending the special meeting and voting in person (your attendance at the meeting will not, by itself, revoke your proxy; you must also vote in person at the special meeting);
    by signing and delivering a new proxy relating to the same shares of VWR common stock and bearing a later date and that is received no later than [                    ], 2017; or
    by submitting a new proxy by telephone or over the Internet by 11:59 Eastern Daylight Time on [                    ], 2017.

Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:

VWR Corporation

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, PA 19087

(610) 386-1700

Attn: Corporate Secretary

If you are a “street name” holder of shares of VWR common stock, you should contact your brokerage firm, bank, trust or other nominee to obtain instructions as to how to change or revoke your voting instructions.

 

 

Q: What are the material U.S. federal income tax consequences of the merger to me?

 

A:

The receipt of cash in exchange for shares of VWR common stock pursuant to the merger will generally be a taxable transaction for U.S. federal income tax purposes. You will generally recognize gain or loss equal to the difference, if any, between the amount of cash you receive and the adjusted tax basis of your shares of VWR common stock. If you are a U.S.

 

LOGO   14  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Questions and Answers About the Merger and the Special Meeting (continued)

 

 

  Holder (as defined in the section entitled “U.S. Federal Income Tax Consequences of the Merger” beginning on page 71 of this proxy statement), you will generally be subject to U.S. federal income tax on any gain recognized in connection with the merger. If you are a Non-U.S. Holder (as defined in the section entitled “U.S. Federal Income Tax Consequences of the Merger” beginning on page 71 of this proxy statement), you will generally not be subject to U.S. federal income tax on any gain recognized in connection with the merger unless you have certain connections to the United States. Under certain circumstances, the Company may be required to withhold a portion of your merger consideration under applicable tax laws. The tax consequences of the merger to you will depend on your particular circumstances, and you should consult your own tax advisors to determine how the merger will affect you. For a more detailed summary of the tax consequences of the merger, see “U.S. Federal Income Tax Consequences of the Merger” beginning on page 71 of this proxy statement.

 

 

Q: What will the holders of VWR stock options and RSUs receive in the merger?

Pursuant to the merger agreement and consistent with the terms of the company equity plan, all equity awards outstanding immediately prior to the effective time will be subject to the following treatment, unless otherwise agreed to by the parties:

 

    each VWR stock option that is outstanding and unexercised immediately prior to the effective time will become fully vested and will be cancelled and converted into the right to receive an amount in cash determined by multiplying (i) the excess of the merger consideration, if any, over the exercise price per share of VWR common stock underlying such stock option by (ii) the number of shares of VWR common stock subject to such stock option immediately prior to the effective time; provided that any VWR stock option with an exercise price per share of VWR common stock underlying such stock option that equals or exceeds the merger consideration will be cancelled without the payment of consideration; and
    each RSU that is outstanding and unvested immediately prior to the effective time will be converted into a vested right to receive cash in an amount equal to the merger consideration.

 

 

Q: Am I entitled to appraisal rights?

 

A: If the merger is completed, VWR stockholders who hold their shares of VWR common stock of record and who do not vote in favor of the adoption of the merger agreement at the special meeting and who also hold their shares of VWR common stock through the effective date of the merger, will have the right to seek appraisal of the fair value of their shares of VWR common stock, as determined by the Delaware Court of Chancery, together with interest, if any, on the amount determined to be the fair value, subject to the conditions set forth in Section 262 of the DGCL, but only if such VWR stockholders submit a written demand for such an appraisal prior to the vote on the merger agreement at the special meeting and otherwise comply with all of the procedures set forth in Section 262 of the DGCL necessary to properly perfect appraisal rights under Delaware law, as described in the section entitled “Appraisal Rights” beginning on page 76 of this proxy statement. A copy of the full text of Section 262 of the DGCL, is included as Annex D to this proxy statement. Failure to strictly comply with the procedures set forth in Section 262 of the DGCL will result in the loss of appraisal rights.

 

 

Q: Should I send in my stock certificates or other evidence of ownership now?

 

A: No. If the merger is completed, you will be sent a letter of transmittal with detailed written instructions for exchanging your shares of VWR common stock for the merger consideration. If your shares of VWR common stock are held in “street name” by your brokerage firm, bank, trust or other nominee, you will receive instructions from your brokerage firm, bank, trust or other nominee as to how to effect the surrender of your “street name” shares of VWR common stock in exchange for the merger consideration. PLEASE DO NOT SEND IN YOUR STOCK CERTIFICATES AT THIS TIME.

 

 

Q: What happens if I sell my shares of VWR common stock before the special meeting?

 

A: The record date for stockholders entitled to vote at the special meeting is earlier than the date of the special meeting and the expected closing date of the merger. If you transfer your shares of VWR common stock after the record date but before the special meeting, you will, unless special arrangements are made, retain your right to vote at the special meeting but will transfer the right to receive the merger consideration to the person to whom you transferred your shares of VWR common stock.

 

  15   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Questions and Answers About the Merger and the Special Meeting (continued)

 

 

In addition, if you sell your shares of VWR common stock prior to the special meeting or prior to the effective time, you will not be eligible to exercise appraisal rights with respect to those shares of VWR common stock in respect of the merger. For a more detailed discussion of appraisal rights and the requirements for perfecting your appraisal rights, see “Appraisal Rights” beginning on page 76 and Annex D of this proxy statement.

 

 

Q: What is householding and how does it affect me?

 

A: The Securities and Exchange Commission (the “ SEC ”) permits companies to send a single set of proxy materials to any household at which two or more stockholders reside, unless contrary instructions have been received, but only if the applicable stockholder provides advance notice and follows certain procedures.

In such cases, each stockholder continues to receive a separate notice of the special meeting and proxy card. Certain brokerage firms may have instituted householding for beneficial owners of shares of VWR common stock held through such firms. If your family has multiple accounts holding shares of VWR common stock, you may have already received householding notification from your broker. Please contact your broker directly if you have any questions or require additional copies of this proxy statement. The broker will arrange for delivery of a separate copy of this proxy statement promptly upon your written or oral request. You may decide at any time to revoke your decision to household, and thereby receive multiple copies.

 

 

Q: Who can answer further questions?

 

A: For additional questions about the merger, assistance in submitting proxies or voting shares of VWR common stock, or to request additional copies of the proxy statement or the enclosed proxy card, please contact the Company’s proxy solicitor at:

D.F. King & Co., Inc.

48 Wall Street

New York, NY 10005

1 (212) 269-5550 (call collect)

1 (877) 283-0325 (toll free)

If your brokerage firm, bank, trust or other nominee holds your shares of VWR common stock in “street name,” you should also call your brokerage firm, bank, trust or other nominee for additional information.

 

LOGO   16  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Cautionary Factors Regarding

Forward-Looking Statements

 

This proxy statement, and the documents incorporated by reference in this proxy statement, include forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this proxy statement are forward-looking statements. Forward-looking statements discuss the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may be preceded by, followed by or include the words “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “outlook,” “plan,” “potential,” “project,” “projection,” “propose,” “seek,” “can,” “could,” “may,” “should,” “would,” “will,” the negatives thereof and other words and terms of similar meaning.

Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. The Company has based these forward-looking statements on its current expectations and projections about future events. Although the Company believes that its assumptions made in connection with the forward-looking statements are reasonable, it cannot assure you that the assumptions and expectations will prove to be correct; and no assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements. You should understand that the following important factors, in addition to those discussed in the Company’s filings with the SEC, including our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 and Annual Report on Form 10-K for the year ended December 31, 2016 and matters described or incorporated by reference in this proxy statement, could affect the Company’s future results and could cause those results or other outcomes to differ materially from those expressed or implied in its forward-looking statements:

 

  the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement by either party or result in negative consequences to VWR or VWR stockholders;
  the Company’s failure to obtain the required vote of its stockholders to adopt the merger agreement, the parties’ failure to obtain any required regulatory approval, the prohibition of consummating the merger by a court or other governmental authority or the failure to satisfy any of the other closing conditions to the merger, and delays in connection with the foregoing;
  Avantor’s failure to obtain the necessary financing arrangements set forth in the debt commitment letter and the preferred equity commitment letter delivered pursuant to the merger agreement or have the required amount of cash available at closing;
  risk that the merger agreement may be terminated in circumstances that require us to pay Avantor a termination fee;
  risks related to distraction of management due to the substantial commitments of time and resources required for matters relating to the merger;
  risks related to the requirements under the merger agreement to operate in the ordinary course of business and refrain from taking certain actions with respect to business and financial affairs;
  risks related to the influence on the decisions of the Company’s directors and executive officers regarding support for the merger based upon interests different from stockholders (including, for example, accelerated vesting and payment for certain stock-based incentive awards). See “Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 42 of this proxy statement;
  the effect of the announcement of the merger on the Company’s stock price, on its ability to retain and hire key personnel and on its ability to maintain relationships with its customers, suppliers and employees, and on its operating results and business generally;
  the fact that, if the merger is completed, stockholders will forgo the opportunity to realize the potential long-term value of the successful execution of the Company’s current strategy as an independent company;
  the outcome of any litigation related to the merger or related to any enforcement proceeding commenced against the Company to perform the Company’s obligations under the merger agreement; and
  other risks and uncertainties detailed in the Company’s filings with the SEC, including the information contained under the caption “Risk Factors” herein and information in our consolidated financial statements and notes thereto included in tour Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 and Annual Report on Form 10-K for the year ended December 31, 2016 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2016. See “Where You Can Find More Information” beginning on page 84 of this proxy statement.

 

  17   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Cautionary Factors Regarding Forward-Looking Statements (continued)

 

 

All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this report. The Company undertakes no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.

 

LOGO   18  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Special Meeting

 

Date, Time, Place and Purpose of the Special Meeting

This proxy statement is being furnished to VWR stockholders as part of the solicitation of proxies by the Company’s officers, directors and employees for use at the special meeting to be held on [                    ], 2017 starting at [                ], Eastern Daylight Time, at [                    ], or at any adjournment or postponement thereof. The purpose of the special meeting is for VWR stockholders to consider and vote on the following:

1. a proposal to adopt the merger agreement;

2. a proposal to approve, on an advisory and non-binding basis, specified compensation that may become payable to the Company’s named executive officers in connection with the merger; and

3. a proposal to approve one or more adjournments of the special meeting, if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if the Company has not obtained, at the time of the special meeting, sufficient affirmative stockholder votes to adopt the merger agreement.

VWR stockholders must adopt the merger agreement in order for the merger to occur. A copy of the merger agreement is attached to this proxy statement as Annex A . You are urged to read the merger agreement carefully in its entirety.

Record Date and Quorum

Our Board has fixed the close of business on [                    ], 2017 as the record date for the purpose of determining the stockholders who are entitled to receive notice of and to vote at the special meeting. Only holders of record of shares of VWR common stock on the record date are entitled to receive notice of, and to vote at, the special meeting and at any adjournment or postponement of that meeting (unless the Board fixes a new record date for stockholders entitled to receive notice of, and to vote at, any adjournment or postponement of the special meeting in accordance with the merger agreement and the bylaws of the Company). As of [    ], 2017 there were [            ] shares of VWR common stock outstanding and entitled to vote. Each share of VWR common stock entitles its holder to one vote on all matters properly coming before the special meeting.

A majority of the outstanding shares of VWR common stock entitled to vote, present in person or represented by proxy, constitutes a quorum for the purpose of considering the proposals. Shares of VWR common stock held by stockholders present in person or represented by proxy at the special meeting but not voted, including shares of VWR common stock for which proxies have been duly executed, dated and received but for which stockholders have abstained, will be treated as present at the special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business. If a quorum fails to attend the special meeting, the presiding officer may adjourn the special meeting. See “— Adjournments” below.

Vote Required for Approval

You may vote “ FOR ” or “ AGAINST ”, or you may “ ABSTAIN ” from voting on, each proposal to be considered and voted on at the special meeting.

Consummation of the merger requires the adoption of the merger agreement by the affirmative vote of stockholders holding at least a majority of the issued and outstanding shares of VWR common stock entitled to vote thereon.  Therefore, if you abstain or fail to submit a proxy by telephone, over the Internet or by mail and otherwise fail to attend the special meeting and cast your vote on the proposal to adopt the merger agreement, or, with respect to shares of VWR common stock you hold in “street name,” if you fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the adoption of the merger agreement.

The approval of the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and, if a quorum is present, the approval of the proposal to adjourn the special meeting if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if the Company has not obtained, at the time of the special meeting, sufficient affirmative stockholder votes to adopt the merger agreement, require the affirmative vote of a majority of the shares of VWR common stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter. If a quorum is not present, the approval of the proposal to adjourn the special meeting

 

  19   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Special Meeting (continued)

 

 

requires the affirmative vote of the holders of a majority of the shares of VWR common stock present in person or represented by proxy at the meeting and entitled to vote at the meeting. If you attend the special meeting in person or by proxy and abstain from voting, it will have the same effect as a vote against the advisory and non-binding proposal on specified compensation payable to the Company’s named executive officers in connection with the merger and the proposal to adjourn the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement. If you fail to attend the special meeting in person or by proxy, or if you hold your shares of VWR common stock in “street name” and fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the outcome of any vote to approve the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger or the proposal to adjourn the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement.

Voting and Support Agreement

Concurrently with the execution and delivery of the merger agreement, Varietal, which held approximately 34.7% of the outstanding shares of VWR common stock as of March 20, 2017 (the “ Varietal Securities ”), delivered to Avantor and Merger Sub the Voting and Support Agreement. The form of the Voting and Support Agreement is attached to the proxy statement as Annex B . Pursuant to the terms of the Voting and Support Agreement, Varietal agreed, among other things, to vote the Varietal Securities in favor of the approval of the merger agreement and the approval of the Transactions and against (i) any change in the Board, (ii) any takeover proposal (as described under “The Merger Agreement—VWR Board Recommendation,” beginning on page 60) or any other proposal made in opposition to the merger agreement or the Transactions, and (iii) any other proposal or action that would constitute a breach of any covenant, representation or warranty or any other obligation or agreement of VWR under the merger agreement or of Varietal under the Voting and Support Agreement or that is intended or could reasonably be expected to prevent, frustrate, impede, interfere with, materially delay or adversely affect the Transactions, in each case subject to the limitations set forth in the Voting and Support Agreement, and has also granted an irrevocable proxy to Avantor with respect thereto.

Subject to certain exceptions, the Voting and Support Agreement prohibits transfers by Varietal of any of the Varietal Securities prior to the termination of the Voting and Support Agreement and certain other actions that would impair the ability of Varietal to fulfill its obligations under the Voting and Support Agreement.

The Voting and Support Agreement will terminate upon the earliest to occur of (i) termination of the merger agreement, (ii) the effective time, (iii) any change to the merger agreement without the prior written consent of Varietal that reduces any consideration payable to Varietal or changes the form of consideration payable to Varietal and (iv) the mutual consent of Avantor, Merger Sub and Varietal.

Voting and Proxies

Holders of record of shares of VWR common stock may vote their shares of VWR common stock by attending the special meeting and voting their shares of VWR common stock in person. Alternatively, you may have your shares of VWR common stock voted in one of the following three ways, whether or not you plan to attend the special meeting:

 

  by submitting a proxy by telephone by calling 1-800-454-8683 and following the telephone voting instructions printed on your proxy card;
  by submitting a proxy over the Internet at www.proxyvote.com and following the Internet voting instructions printed on your proxy card; or
  by marking, signing and dating each proxy card you receive and returning it in its accompanying postage-paid envelope.

If you are submitting a proxy by telephone or over the Internet, your voting instructions must be received by 11:59 p.m. Eastern Daylight Time on [                    ], 2017. If you are submitting a proxy by mail, your completed proxy card must be received no later than [                    ], 2017.

Submitting a proxy by telephone, over the Internet or by mail will not prevent you from voting in person at the special meeting. You are encouraged to submit a proxy by telephone, over the Internet or by mail, even if you plan to attend the special meeting, to ensure that your shares of VWR common stock are represented at the special meeting.

All shares of VWR common stock represented by properly signed and dated proxies received in time for the special meeting will be voted at the special meeting in the manner specified by the holder. If you return a properly signed and dated proxy card but

 

LOGO   20  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Special Meeting (continued)

 

 

do not mark the boxes showing how you wish to vote, your shares of VWR common stock will be voted “ FOR ” the proposal to adopt the merger agreement, “ FOR ” the approval on an advisory and non-binding basis, of specified compensation that may become payable to the Company’s named executive officers in connection with the merger and “ FOR ” the approval of the proposal to adjourn the special meeting to solicit additional proxies, if necessary and to the extent permitted by the merger agreement. With respect to any other matter that properly comes before the special meeting, all shares of VWR common stock represented by proxies received by the Company will be voted with respect to such matter in accordance with the judgment of the persons named as attorneys-in-fact in the proxies.

If your shares of VWR common stock are held in “street name,” you will receive instructions from your brokerage firm, bank, trust or other nominee that you must follow in order to have your shares of VWR common stock voted. If you have not received such voting instructions or require further information regarding such voting instructions, contact your brokerage firm, bank, trust or other nominee, as the case may be. Brokers who hold shares of VWR common stock in “street name” for a beneficial owner of those shares of VWR common stock typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from the beneficial owner. However, brokers are not allowed to vote with respect to the approval of matters that are “non-routine,” such as adoption of the merger agreement, without specific instructions from the beneficial owner. Broker non-votes, with respect to any proposal, are shares of VWR common stock held by a broker or other nominee present in person or represented at a meeting at which at least one “routine” proposal is presented, but with respect to which the broker or other nominee is not instructed by the beneficial owner of such shares of VWR common stock to vote on the particular proposal and the broker does not have discretionary voting power on such proposal. Because all proposals for the special meeting are non-routine and non-discretionary, the Company anticipates that there will not be any broker non-votes in connection with any proposal. If your broker or other nominee holds your shares of VWR common stock in “street name,” your broker or other nominee will vote your shares of VWR common stock only if you provide instructions on how to vote. If your broker or other nominee holds your shares of VWR common stock in “street name” and you do not obtain a proxy from your broker or other nominee to vote such shares of VWR common stock at the special meeting and do not provide your broker or other nominee instructions on how to vote your shares of VWR common stock, your shares of VWR common stock will not count toward the determination of a quorum and this will have the same effect as a vote “ AGAINST ” the proposal to adopt the merger agreement and will have no effect on the outcome of any vote to approve the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger or the proposal to adjourn the special meeting. Please follow the directions on the voting instruction form sent to you by your brokerage firm, bank, trust or other nominee with this proxy statement.

Revocation of Proxies

Proxies received by the Company before the vote being taken at the special meeting, which have not been revoked or superseded before being voted, will be voted at the special meeting. If you are a stockholder of record of shares of VWR common stock, you have the right to change or revoke your proxy before the vote is taken at the special meeting by taking any of the following actions:

 

  delivering to the Company’s secretary a signed written notice of revocation bearing a date later than the date of the proxy, stating that the proxy is revoked and that is received by the Company’s Corporate Secretary no later than [                    ], 2017;
  attending the special meeting and voting your shares of VWR common stock in person (your attendance at the meeting will not, by itself, revoke your proxy; you must also vote in person at the meeting);
  signing and delivering a new proxy, relating to the same shares of VWR common stock and bearing a date later than the date of the earlier proxy and that is received no later than [                    ], 2017; or
  submitting a new proxy over the Internet or by telephone by 11:59 Eastern Daylight Time on [                    ], 2017.

Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:

VWR Corporation

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, PA 19087

(610) 386-1700

Attn: Corporate Secretary

 

  21   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Special Meeting (continued)

 

 

If you are a “street name” holder of shares of VWR common stock, you may change your voting instructions by submitting new voting instructions to your brokerage firm, bank, trust or other nominee in accordance with the instructions provided by your brokerage firm, bank, trust or other nominee. You must contact your nominee to obtain instructions as to how to change or revoke your prior voting instructions.

Adjournments

The Company is submitting a proposal for consideration at the special meeting to authorize the named proxies to approve one or more adjournments of the special meeting, if necessary and to the extent permitted by the merger agreement, if at the time of the special meeting the Company has not received proxies representing a sufficient number of votes to adopt the merger agreement. Even though a quorum may be present at the special meeting, it is possible that the Company may not have received proxies representing a sufficient number of votes to adopt the merger agreement by the time of the special meeting. In that event, the Company would expect to adjourn the special meeting in order to solicit additional proxies. The adjournment proposal relates only to an adjournment of the special meeting for purposes of soliciting additional proxies to obtain the requisite stockholder approval to adopt the merger agreement. Any other adjournment of the special meeting, to the extent permitted by the merger agreement, including an adjournment required because of the absence of a quorum, would be voted upon pursuant to the discretionary authority granted by the proxies and by those present in person at the special meeting.

The approval of the proposal to approve one or more adjournments of the special meeting, if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if the Company has not obtained, at the time of the special meeting, sufficient affirmative stockholder votes to adopt the merger agreement, requires, if a quorum is present, the affirmative vote of a majority of the shares of VWR common stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter and, if a quorum is not present, the affirmative vote of the holders of a majority of the shares of VWR common stock present in person or represented by proxy at the meeting and entitled to vote at the special meeting. If you attend the special meeting in person or by proxy and abstain from voting, it will have the same effect as a vote against the proposal to adjourn the special meeting. If you fail to attend the special meeting in person or by proxy, or if you hold your shares of VWR common stock in “street name” and fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the proposal to adjourn the special meeting.

The Board unanimously recommends that you vote “FOR” the adjournment proposal. Properly executed proxies will be voted “FOR” the adjournment proposal, unless otherwise noted on the proxies. If the special meeting is adjourned and the time for and place of the reconvened meeting are announced at the meeting at which the adjournment is taken, the Company is not required to give notice of the time and place of the adjourned meeting unless the adjournment is for more than 30 days or the Board fixes a new record date for determining stockholders entitled to receive notice of, or to vote at, the adjourned special meeting.

Solicitation of Proxies

The Board is soliciting your proxy, and the Company will bear the cost of soliciting proxies. The Company’s directors, officers and employees may solicit proxies on its behalf in person, by telephone, email or facsimile. These persons will not be paid additional remuneration for their efforts. The Company has also retained D.F. King & Co., Inc. (“ D.F. King ”) to assist in the solicitation of proxies at a fee estimated not to exceed $25,000, plus reasonable expenses. The Company will also request brokers and other fiduciaries to forward proxy solicitation material to the beneficial owners of shares of VWR common stock that the brokers and fiduciaries hold of record. Upon request, the Company will reimburse them for their reasonable out-of-pocket expenses. The Company will pay all expenses of filing, printing and mailing this proxy statement, including solicitation expenses. The Company has also agreed to indemnify D.F. King against liabilities arising out of or relating to the rendering of services by D.F. King in connection with its proxy solicitation services.

Stockholder List

A list of VWR stockholders entitled to vote at the special meeting will be available for inspection at the Company’s principal executive offices located at Radnor Corporate Center, Building One, Suite 200, 100 Matsonford Road, Radnor, PA 19087 at least ten days prior to the date of the special meeting and continuing through the special meeting for any purpose germane to the meeting. The list will also be available at the special meeting for inspection by any stockholder present at the meeting.

 

LOGO   22  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Special Meeting (continued)

 

 

Questions and Additional Information

If you have questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact the Company’s proxy solicitor at:

D.F. King & Co., Inc.

48 Wall Street

New York, NY 10005

1 (212) 269-5550 (call collect)

1 (877) 283-0325 (toll free)

 

  23   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Proposals Submitted to VWR Stockholders

 

The Merger Agreement Proposal

(Item 1 on the Proxy Card)

The Company is asking its stockholders to adopt the merger agreement that the Company has entered into with Avantor and Merger Sub. A copy of the merger agreement is attached to this proxy statement as Annex  A . You are urged to read the merger agreement carefully and in its entirety.

For a summary and detailed information regarding this proposal, see the information about the merger agreement and the merger throughout this proxy statement, including the information set forth in the sections entitled “The Merger” beginning on page 27 of this proxy statement and “The Merger Agreement” beginning on page 53 of this proxy statement.

Under Delaware law, stockholders holding at least a majority of the outstanding shares of VWR common stock entitled to vote thereon must affirmatively vote for the proposal to adopt the merger agreement in order for the Company to complete the merger. If you abstain from voting, fail to submit a proxy over the Internet, by telephone, by mail or otherwise fail to attend the special meeting and cast your vote in person or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the proposal to adopt the merger agreement.

The Board unanimously approved and declared the merger advisable, and determined that the Transactions are fair to and in the best interests of the Company and its stockholders and unanimously resolved to recommend that the Company’s stockholders adopt the merger agreement. See “The Merger—Recommendation of the Board and Reasons for the Merger” beginning on page 32 of this proxy statement.

The Board unanimously recommends that holders of shares of VWR common stock vote “FOR” the proposal to adopt the merger agreement.

The Named Executive Officer Merger-Related Compensation Proposal

(Item 2 on the Proxy Card)

Pursuant to by Section 14A of the Exchange Act and the applicable SEC rules issued thereunder, the Company is required to submit a proposal to approve, on an advisory and non-binding basis, specified compensation that may become payable to the Company’s named executive officers in connection with the merger. This proposal, commonly known as “say-on-golden parachutes” (the “named executive officer merger-related compensation proposal”), gives the VWR stockholders the opportunity to vote on an advisory and non-binding basis, on the compensation that the named executive officers may be entitled to receive from the Company that is based on or otherwise relates to the merger. This compensation is summarized in the table and the footnotes thereto under “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger—Golden Parachute Compensation” beginning on page 47 of this proxy statement.

The Board encourages you to review carefully the named executive officer merger-related compensation information disclosed in this proxy statement.

The Board unanimously recommends that the VWR stockholders adopt the following resolution:

“RESOLVED, that the stockholders of VWR Corporation hereby approve, on a non-binding, advisory basis, the compensation to be paid or become payable by VWR Corporation to its named executive officers that is based on or otherwise relates to the merger as disclosed in the Company’s proxy statement pursuant to Item 402(t) of Regulation S-K under the section titled “Golden Parachute Compensation” and the corresponding table and the footnotes thereto.”

The vote on the named executive officer merger-related compensation proposal is a vote separate and apart from the vote on the proposal to adopt the merger agreement. Accordingly, you may vote to adopt the merger agreement and vote not to approve the named executive officer merger-related compensation proposal and vice versa. Because the vote on the named executive officer merger-related compensation proposal is advisory only, it will not be binding on either the Company or Avantor. Accordingly, if the merger agreement is adopted and the merger is completed, the compensation will be payable, subject only to the conditions applicable thereto, regardless of the outcome of the non-binding, advisory vote of the VWR stockholders.

 

LOGO   24  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Proposals Submitted to VWR Stockholders (continued)

 

 

The above resolution approving, on an advisory and non-binding basis, specified compensation that may become payable to the Company’s named executive officers in connection with the merger will require the affirmative vote of a majority of the shares of VWR common stock present in person or represented by proxy at the special meeting and entitled to vote on the subject matter. If you attend the special meeting in person or by proxy and abstain from voting, it will have the same effect as a vote against the non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger. If you fail to attend the special meeting in person or by proxy, or if you hold your shares of VWR common stock in “street name” and fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the outcome of any vote to approve the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger.

The Board unanimously recommends that holders of shares of VWR common stock vote “FOR” the named executive officer merger-related compensation proposal.

The Adjournment Proposal

(Item 3 on the Proxy Card)

The Company is asking its stockholders to approve a proposal to adjourn the special meeting, if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if the Company has not obtained, at the time of the special meeting, sufficient affirmative stockholder votes to adopt the merger agreement. If the VWR stockholders approve the adjournment proposal, the Company could adjourn the special meeting, and any adjourned session of the special meeting, and use the additional time to solicit additional proxies.

If, at the special meeting, the number of shares of VWR common stock present in person or represented by proxy and voting in favor of the proposal to adopt the merger agreement is not sufficient to approve that proposal, the Company may move to adjourn the special meeting in order to enable the Company’s directors, officers and employees to solicit additional proxies for the adoption of the merger agreement. In that event, the Company will ask its stockholders to vote only upon the proposal to approve the advisory and non-binding proposal on specified compensation that may become payable to the Company’s named executive officers in connection with the merger and the adjournment proposal, and not the merger agreement proposal. If a quorum is present, the approval of the proposal to adjourn the special meeting, if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if the Company has not obtained, at the time of the special meeting, sufficient affirmative stockholder votes to adopt the merger agreement, requires the affirmative vote of a majority of the shares of VWR common stock present in person or represented by proxy and entitled to vote on the subject matter. If a quorum is not present, the approval of the proposal to adjourn the special meeting requires the affirmative vote of the holders of a majority of the shares of VWR common stock present in person or represented by proxy at the meeting and entitled to vote at the meeting. If you attend the special meeting in person or by proxy and abstain from voting, it will have the same effect as a vote against the proposal to adjourn the special meeting. If you fail to attend the special meeting in person or by proxy, fail to submit a proxy over the Internet, by telephone, by mail or otherwise fail to attend the special meeting and cast your vote, or if you hold your shares of VWR common stock in “street name” and fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the outcome of any vote to approve the proposal to adjourn the special meeting.

The adjournment proposal relates only to an adjournment of the special meeting occurring for purposes of soliciting additional proxies for adoption of the merger agreement proposal in the event that, at the time of the special meeting, the Company has not received a sufficient number of votes to approve that proposal. The Company retains full authority to the extent set forth in its bylaws and Delaware law (subject to the terms of the merger agreement) to adjourn the special meeting for any other purpose, or to postpone the special meeting before it is convened, without the consent of the VWR stockholders.

The Board unanimously recommends that holders of shares of VWR common stock vote “FOR” the adjournment proposal.

 

  25   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Companies

 

VWR Corporation . VWR is a global independent provider of product and service solutions to laboratory and production customers. With sales in excess of $4.5 billion in 2016, VWR enables science for customers in the pharmaceutical, biotechnology, industrial, education, government and healthcare industries. With more than 160 years of experience, VWR has cultivated a value proposition delivering product choice, operational excellence and differentiated services to improve VWR’s customers’ productivity from research to production. VWR’s differentiated services provide innovative, flexible and customized solutions from scientific research services to custom-manufactured chemical blends. VWR’s dedicated team of more than 10,200 associates is focused on supporting scientists, medical professionals and production engineers to achieve their goals. VWR’s common stock is listed on NASDAQ under the symbol “VWR.”

VWR Corporation

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, PA 19087

(610) 386-1700

Avantor, Inc. Avantor is a global supplier of ultra-high-purity materials for the life sciences and advanced technology markets. Avantor provides performance materials and solutions for the production and research needs of approximately 7,900 customers across the biotechnology, pharmaceutical, medical device, diagnostics, aerospace & defense, and semiconductor industries. Avantor’s product portfolio includes more than 30,000 products that meet increasingly stringent standards across technology driven and highly regulated markets. Avantor manufactures and markets its products around the world under several respected brand names. Avantor’s brands of performance chemistries include the J.T.Baker ® , Macron Fine Chemicals™, Rankem™, BeneSphera™, Puritan Products™, and POCH™ brands. Avantor’s brands of advanced silicones include the NuSil™ and CareSil™ brands.

Avantor, Inc.

3477 Corporate Parkway

Center Valley, PA 18034

(855) 282-6867

Vail Acquisition Corp . Merger Sub is a wholly-owned subsidiary of Avantor, and was formed on May 3, 2017, solely for the purpose of engaging in the Transactions and has not engaged in any business except for activities incidental to its incorporation and in connection with the Transactions and arranging of the financing in connection with the merger.

Vail Acquisition Corp

c/o Avantor, Inc.

3477 Corporate Parkway

Center Valley, PA 18034

(855) 282-6867

Avantor and Merger Sub are affiliated with New Mountain, a growth-oriented investment firm based in New York that currently manages private equity, public equity and credit funds with approximately $15 billion in aggregate capital commitments.

In connection with the Transactions, (1) Avantor and Issuer have obtained preferred equity financing commitments of $2.65 billion from BSPI and (2) Avantor has obtained debt financing commitments of $7.75 billion from certain debt financing parties (in each case, pursuant to the terms and conditions as described further under “The Merger—Financing of the Merger” beginning on page 50 of this proxy statement).

 

LOGO   26  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger

 

Background of the Merger

The following chronology summarizes the key meetings and events that led to the signing of the merger agreement. The following chronology does not purport to catalogue every conversation among the Board, members of Company senior management or the Company’s representatives and other parties.

As a matter of course and in their ongoing effort to enhance stockholder value, the Board and management of VWR (for purposes of this section, “ management ”) have regularly reviewed and evaluated the Company’s business plan and strategy, including the review of a variety of strategic alternatives (including the sale of businesses or assets, or the acquisition of businesses or assets) to take into account the changing developments, trends, risks and conditions impacting the business and its industry generally. During the process leading up to VWR’s initial public offering in 2014, representatives of Varietal contacted numerous potential financial and strategic buyers to assess interest in a sale of VWR by Varietal as an alternative to the initial public offering, and ultimately engaged in detailed discussions with four potential strategic buyers. None of the contacted parties, however, ultimately expressed interest in pursuing a sale.

These reviews and evaluations of potentially available transactions and strategies are an important factor in the Company’s belief that it and the Board are knowledgeable about the opportunities for strategic transactions and acquisitions involving companies in its industry generally and the Company in particular.

From time to time prior to its engagement by VWR to act as its financial advisor in connection with the merger, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“ BofA Merrill Lynch ”), not acting on behalf of VWR and without access to non-public information about VWR, held discussions with certain third parties as part of its ordinary course investment banking dialogue regarding potential strategic alternatives involving VWR. VWR understands that, between April 2016 and February 2017, BofA Merrill Lynch investment bankers who were later retained to advise VWR in connection with the Transactions had participated in such discussions with 16 parties, including both financial and strategic potential bidders, and that, of this group, initial interest at a value that BofA Merrill Lynch thought would be acceptable to VWR stockholders was expressed by only one party and a limited partner of such party (together, “ Party A ”), which was a potential financial bidder that Varietal had not contacted in 2014.

Over the week of January 9, 2017, BofA Merrill Lynch organized introductory meetings during the JP Morgan Healthcare Conference in San Francisco among Tim Sullivan and Nick Alexos, members of the Board and managing directors at Madison Dearborn Partners, LLC (“ MDP ”), and representatives of Party A, and among certain members of management and representatives of Party A, in order to discuss Party A’s interest in the Company based on publicly available information.

On the evening of January 9, 2017, representatives of VWR, including management and Mr. Alexos, and representatives of Avantor, including management and Matt Holt and Andre Moura, managing directors of New Mountain and members of the Avantor board of directors, met for dinner during the JP Morgan Healthcare Conference. For several years, VWR and Avantor have shared a distribution and supply relationship, and the discussion among these representatives covered their ordinary course business relations and the healthcare markets generally. There was no discussion of a potential strategic transaction involving the companies.

On January 20, 2017, the Board held a telephonic meeting attended by certain members of management to discuss Party A’s expressed interest in the Company. The Board discussed with management the need to enter into a nondisclosure and standstill agreement with Party A.

On January 24, 2017, the Company entered into a nondisclosure agreement with Party A. The nondisclosure agreement contained customary standstill provisions, which did not prohibit confidential proposals from being made to the Board.

On January 25, 2017, Party A met with management in order to receive certain historical financial information and the annual budget of the Company and to conduct oral due diligence on such matters as would enable Party A to refine its level of interest in VWR.

 

  27   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

On February 8, 2017, the Company received a non-binding proposal from Party A, in which it offered to acquire all of the Company’s outstanding shares of common stock (for purposes of this section, “ shares ”) at a price between $28.00 and $30.00 per share, and potentially at an even higher price upon completion of its due diligence.

On February 13, 2017, at a special meeting of the Board, the Board determined that it was not prepared to engage in a transaction with Party A based upon the per share consideration set forth in the proposal. The Board authorized management to consider ways in which Party A might be convinced to increase the per share consideration in its proposal. A representative of Kirkland & Ellis LLP (“ Kirkland  & Ellis ”), the Company’s legal advisor, discussed the Board’s fiduciary duties in the context of considering a possible sale of the Company, including the obligations for directors to inform themselves fully of all relevant facts and to avoid conflicts of interest (and to disclose promptly any such conflict that should arise), advised that no discussion of employment terms should occur between management and any potential bidder, reviewed a typical timeline for a transaction should an actionable proposal be presented to the Board and responded to questions from directors. At the meeting, the Board instructed management to prepare five-year financial projections of the Company to be shared with Party A and any other interested bidder in order to allow for a full and proper valuation of the Company. Also at the meeting, the Board authorized the engagement of BofA Merrill Lynch as the Company’s exclusive financial advisor because of BofA Merrill Lynch’s familiarity with VWR over time and BofA Merrill Lynch’s familiarity with the potential bidder community as a result of the numerous conversations it held with potentially interested parties between April 2016 and February 2017 (the fact of which had by then been disclosed to the Board).

On February 14, 2017, Mr. Kraemer, on behalf of the Board, responded to Party A in writing and conveyed its unwillingness to engage in a transaction at the per share consideration set forth in the proposal, but noted that the Board had instructed the Company’s management team to consider ways in which it might assist Party A in getting to a value range that could be the basis for further discussions.

On February 21-22, 2017, the Board held a regularly scheduled meeting in Chicago, Illinois that was attended in part by certain members of management and representatives of Kirkland & Ellis and BofA Merrill Lynch. The Board discussed with management the preparation of the five-year financial projections and the fact that it would need to have a high degree of confidence in the achievability of such projections before directing that such projections be shared with BofA Merrill Lynch or any potential bidder. Representatives of BofA Merrill Lynch reviewed with the Board the potential interest level of possible bidders for the Company, including the willingness and ability of Party A to increase its level of indicative interest and BofA Merrill Lynch’s previous outreach to potential strategic and financial bidders. The Board then questioned management about certain of the assumptions and sensitivities that management was preparing to factor into its preliminary preparation of the five-year financial projections.

On March 2, 2017, the Board held a telephonic meeting attended by certain members of management and representatives of Kirkland & Ellis and BofA Merrill Lynch. During this meeting, management reviewed its draft five-year projections, and BofA Merrill Lynch reviewed, among other things, the market’s reaction to the Company’s recent earnings announcement, general market conditions, and its updated preliminary financial analysis of a potential leveraged buy-out transaction proposed by Party A. Following its thorough review of the five-year projections and after considering management’s responses to its questions with respect to the projections, the Board directed management to share such projections with Party A at a meeting subsequently scheduled for March 14, 2017. For more information about the management projections, see “— Certain Prospective Financial Information” beginning on page 35 of this proxy statement.

On March 14, 2017, certain members of management met with Party A in order to discuss the Company’s projections and certain other due diligence matters.

On March 24, 2017, Party A contacted representatives of BofA Merrill Lynch by telephone and conveyed that it would not increase its offer price above $30.00 per share, after which Party A ceased communicating with the Company regarding its independent interest in acquiring the Company.

During the week of March 27, 2017, Messrs. Holt and Moura initiated conversations with Mr. Alexos regarding Avantor’s interest in an acquisition of the Company. Mr. Alexos provided contact information for Mr. Kraemer for the submission of a proposal by Avantor and New Mountain, which Messrs. Holt and Moura confirmed would be financed in part through equity capital from one or more third parties. During that week, Mr. Moura also discussed with Mr. Alexos that Party A had previously initiated discussions and engaged with New Mountain regarding Party A providing equity financing for a possible strategic business combination of Avantor and the Company.

 

LOGO   28  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

On March 30, 2017, the Company received an indication of interest letter from Avantor and New Mountain at a potential acquisition price of $30.00 per share. Based upon the Board’s discussions at its previous meeting, during which time it had reviewed the proposal from Party A, Mr. Kraemer informed Avantor and New Mountain that the price per share offered to the Company was not a basis for further discussions.

On March 31, 2017, the Company received a revised indication of interest letter from Avantor and New Mountain at a potential acquisition price of $30.00 to $32.00 per share.

On March 31, 2017, the Board held a telephonic meeting attended by certain members of management and a representative from Kirkland & Ellis. After discussion of the latest proposal from Avantor and New Mountain, the Board authorized management to enter into a nondisclosure and standstill agreement with Avantor and New Mountain, organize a meeting among the parties to allow further discussion of the proposed transaction and share management’s five-year financial projections at such meeting.

On April 2, 2017, the Company entered into a nondisclosure agreement with Avantor and New Mountain. The nondisclosure agreement contained customary standstill provisions, which did not prohibit confidential proposals from being made to the Board, and allowed for Avantor to share confidential information about itself to permit the Company to evaluate the potential for synergies and determine Avantor’s and New Mountain’s ability to finance a purchase price that would be attractive to VWR stockholders. The nondisclosure agreement also limited Avantor and New Mountain’s ability to communicate about the transaction with potential financing sources other than those specifically identified and consented to by the Company.

During the week of April 3, 2017, representatives of BofA Merrill Lynch discussed with Messrs. Holt and Moura potential equity financing sources that could facilitate Avantor and New Mountain raising their bid price and, as a result of such discussions, Avantor and New Mountain requested permission to talk to Party A as a potential equity financing source.

On April 4, 2017, certain members of management met with senior management of Avantor, as well as Mr. Moura and other representatives of New Mountain, and their respective advisors to discuss various due diligence matters, including high-level operating data and anticipated synergies. At this meeting, the Company reviewed its five-year projections with Avantor and New Mountain, which were the same projections as were shared with Party A.

On April 6, 2017, the Company authorized Avantor and New Mountain to contact Party A to discuss the transaction as a potential equity financing source.

On April 10, 2017, following discussions between representatives of BofA Merrill Lynch and New Mountain, the Company received a further revised indication of interest letter from Avantor and New Mountain reflecting an offer price of $31.00 per share and indicating that New Mountain was in discussions with Party A to provide equity financing in support of the bid. The indication of interest letter was accompanied by a highly confident equity commitment letter from Party A describing its support of the transaction and willingness to provide equity financing in respect of the merger of the Company and Avantor.

Later on April 10, 2017, upon review of the latest offer with BofA Merrill Lynch, Mr. Kraemer informed Avantor and New Mountain that the offer price was not adequate.

Later on April 10, 2017, the Company received an updated indication of interest letter from Avantor and New Mountain at an acquisition price of $32.75 per share. Avantor and New Mountain also requested permission, as required by the nondisclosure agreement, to contact other potential sources of equity financing identified to the Company.

In the morning of April 11, 2017, the Board held a telephonic meeting attended by certain members of management and representatives of Kirkland & Ellis and BofA Merrill Lynch. After discussion of the updated indication of interest letter from Avantor and New Mountain, the Board directed BofA Merrill Lynch to counter with a price of $33.75 per share. Later that afternoon, the Board reconvened telephonically and representatives of BofA Merrill Lynch reported that they had relayed to Messrs. Holt and Moura the request to raise the offer price to $33.75 per share but had not received any response. On behalf of the Company, BofA Merrill Lynch advised Avantor and New Mountain that, given concerns for confidentiality and the lack of specificity on the transaction, they would not be permitted to contact additional equity sources, despite Avantor and New Mountain’s continued emphasis of their need for an equity partner.

On April 12, 2017, the Board held a telephonic meeting attended by certain members of management and representatives of Kirkland & Ellis and BofA Merrill Lynch. The Board directed Messrs. Sullivan and Alexos to contact Messrs. Holt and Moura to understand Avantor’s and New Mountain’s approach to obtaining equity and debt financing commitments and to further encourage Avantor and New Mountain to raise the offer price. The Board authorized Messrs. Sullivan and Alexos to grant

 

  29   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

permission to Avantor and New Mountain to contact the other potential sources of equity financing identified to the Company on April 10, 2017. Later that day, Messrs. Sullivan and Alexos contacted representatives of New Mountain by telephone to affirm the requirement to increase the offer price meaningfully as well as to discuss the proposed equity financing, following which they authorized Avantor and New Mountain to contact the other potential financing sources identified to the Company in order to obtain equity financing commitments.

On the morning of April 13, 2017, the Company received an updated indication of interest letter from Avantor and New Mountain reflecting an increased offer price of $33.25 per share and accompanied by the previously provided highly confident equity commitment letter from Party A. This offer price represented a 22.1% premium to the closing sale price of VWR common stock on April 12, 2017 of $27.23, and a 19.7% premium to the volume-weighted average price of VWR common stock over the 30 trading days ending April 12, 2017 of $27.78. The letter also included a requirement for a 30-day exclusivity period during which the Company would not solicit offers from any other bidder and would deal exclusively with Avantor and New Mountain. Later that day, the Board held a telephonic meeting attended by certain members of management and representatives of Kirkland & Ellis. Mr. Kraemer described the discussions that had taken place with New Mountain, including New Mountain’s outreach to additional sources of equity financing and its commitment to complete due diligence promptly and begin negotiations of a merger agreement. Mr. Kraemer further reported that earlier that day the Company had received a further revised indication of interest letter from Avantor and New Mountain. The Board then discussed the terms proposed by Avantor and New Mountain, concluded that an offer price of $33.25 per share did form the basis for negotiations and that the requested 30-day exclusivity period was acceptable because VWR was not then, and was not reasonably expected during this period to be, in discussions with any other bidder. The Board directed management to countersign the indication of interest letter and to negotiate with Avantor and New Mountain a merger agreement based on the terms outlined therein.

On April 16, 2017, an initial draft of the Agreement and Plan of Merger was sent by Kirkland & Ellis, on behalf of the Company, to Simpson Thacher & Bartlett LLP (“ Simpson Thacher ”), legal counsel for Avantor and New Mountain. The initial draft of the merger agreement contemplated, among other things, a 45-day go-shop period during which the Company would be permitted to solicit alternative acquisition proposals from third parties and a termination fee of 1.5% of the equity value of the Company (based on the offer price of $33.25 per share) upon termination of the merger agreement prior to the end of the go-shop period or, if after the end of the go-shop period in connection with a company takeover proposal from an excluded party, 3.0% of such equity value. The initial draft merger agreement also contemplated that the Company’s largest stockholder, Varietal, would execute an agreement with Avantor in support of the merger.

On April 18, 2017, the Company granted Avantor, New Mountain and their pre-approved list of potential sources for equity financing access to an electronic data room to further assist the conduct of due diligence. Representatives of Kirkland & Ellis and Simpson Thacher also discussed the initial draft of the merger agreement.

During the period between April 19 and April 20, 2017, representatives of the Company, Avantor, New Mountain and Party A and their respective advisors held several meetings and conference calls to discuss various due diligence matters, including the identification and quantification of potential synergies.

On April 20, 2017, the Company granted New Mountain permission to disclose the existence of discussions regarding a transaction and to disclose other pertinent information to potential debt financing sources.

On April 21, 2017, the Board held a telephonic meeting attended by certain members of management and certain representatives of Kirkland & Ellis and BofA Merrill Lynch. A representative from BofA Merrill Lynch provided updates on meetings that had taken place between Avantor, New Mountain and their other potential equity investors as well as the meetings among management, Avantor, New Mountain and Party A. A representative from Kirkland & Ellis reviewed the sequence for arranging and finalizing terms of financing, certain aspects of the merger agreement and the expected timing of regulatory filings required in connection with the proposed transaction based on the then-available information.

Between April 24 and April 28, 2017, management participated in numerous due diligence calls and meetings with, and responded to numerous due diligence requests from, representatives of Avantor and New Mountain and their advisors and advisors of Party A.

On April 25, Kirkland & Ellis delivered to Simpson Thacher an initial draft of a tender and support agreement between Varietal and Avantor, which was later converted into a voting and support agreement in connection with the change in the transaction structure from a two-step tender offer to a one-step merger.

 

LOGO   30  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

On April 27, 2017, management held due diligence meetings with potential debt financing sources as well as separate meetings with several potential sources of equity and preferred equity financing, including Party A and BSPI, which was considering a senior preferred equity investment. Representatives of Avantor and New Mountain also participated in these due diligence meetings.

On April 27, 2017, Simpson Thacher delivered to Kirkland & Ellis a list of issues in the April 16 draft merger agreement that raised concerns for Avantor and New Mountain and their proposals with respect to these issues. On April 28, 2017, representatives of Kirkland & Ellis and Simpson Thacher discussed the issues identified on such list and negotiated certain provisions in the merger agreement, including, among others, the transaction structure (i.e., a one-step merger as opposed to a two-step tender offer and merger), certain closing conditions, the circumstances under which the Board could change its recommendation to the VWR stockholders in favor of the proposed transaction, the length and commencement date of the go-shop period, which Avantor and New Mountain proposed last 20 days after the signing of the merger agreement, the terms on which the merger agreement could be terminated, and the amount of the proposed termination fees, including Avantor’s proposal that it be reimbursed for expenses under certain circumstances after termination of the merger agreement, which the Company rejected.

On April 28, 2017, VWR executed its engagement letter with BofA Merrill Lynch to be VWR’s exclusive financial advisor in connection with the Transactions. In connection with its engagement, BofA Merrill Lynch also provided the Board with disclosure memoranda which noted that (i) over the past year, BofA Merrill Lynch discussed with certain third parties the Company as a potential strategic/acquisition opportunity and (ii) BofA Merrill Lynch prepared materials for discussions with Party A (in which employees of BofA Merrill Lynch currently advising VWR with respect to the Merger participated) that included (x) analyses of implied financial metrics (including premium to current market price and multiples of EBITDA and earnings per share) in respect of a potential transaction with the Company at illustrative purchase prices ranging from $32.50 to $40.00 per share and (y) a hypothetical case study illustrating the achievability of a leveraged buyout of the Company at a price of $35.00 per share and leverage of 7.0x EBITDA, in each case based on publicly available (street) estimates of the Company’s future financial performance and certain BofA Merrill Lynch extrapolations and adjustments thereto, together with an analysis of the sensitivity of equity returns to changes in purchase price (using the aforementioned illustrative prices). These materials, which were prepared by BofA Merrill Lynch in June 2016, did not reflect any information furnished by, or the views of, the Company or Party A.

In the early morning of April 29, 2017, Simpson Thacher distributed a revised draft of the merger agreement to Kirkland & Ellis. The Board held a telephonic meeting that afternoon, attended by certain members of management and representatives of Kirkland & Ellis and BofA Merrill Lynch. A representative from BofA Merrill Lynch provided updates on Avantor and New Mountain’s efforts to arrange financing for the transaction, as well as on the proposed capital structure of the acquiring entity. The Board conveyed to its financial and legal advisors its expectation that the commitment letters with respect to the financing of the transaction be as firm as possible. A representative from Kirkland & Ellis reviewed with the group the status of the merger agreement negotiations, including some of the more significant provisions that had not yet been agreed, and the expected timing of the regulatory review of the transaction.

Between April 29 and May 4, 2017, representatives of Kirkland & Ellis and Simpson Thacher and certain members of the Board and Avantor and New Mountain continued negotiating and revising the merger agreement, disclosure letter, voting and support agreement and financing commitment letters. On April 29, 2017, Kirkland & Ellis distributed a revised draft of the merger agreement, which proposed a go-shop period of 40 days and a reverse termination fee payable by Avantor of $450 million, which represented approximately 10% of the equity value of the Company based on the offer price of $33.25 per share, and drafts of the merger agreement continued to be exchanged between April 29 and May 4, 2017. Avantor and the Company ultimately agreed to key terms on the merger agreement, including (i) a go-shop period of 35 days, (ii) a reverse termination fee payable by Avantor of $300 million, which represented approximately 6.7% of the equity value of the Company (based on the offer price of $33.25 per share) if the merger agreement is terminated under certain conditions, and (iii) a termination fee, payable by the Company if the merger agreement is terminated under certain conditions prior to the end of the go-shop period, of $85 million, which represented approximately 1.9% of such equity value or, if after the end of the go-shop in connection with a company takeover proposal from an excluded party, $170 million, which represented approximately 3.8% of such equity value.

On May 2 and 3, 2017, the Board held a regularly scheduled meeting in Radnor, Pennsylvania attended by certain members of management and in part by representatives of Kirkland & Ellis and BofA Merrill Lynch. During the meeting, a representative of Kirkland & Ellis discussed with the Board its fiduciary duties in the context of a contemplated sale of control of the Company and

 

  31   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

its consideration of other alternatives. Representatives of BofA Merrill Lynch then reviewed with the Board BofA Merrill Lynch’s financial analyses of the $33.25 per share price to be received by VWR stockholders and indicated that it was expected that BofA Merrill Lynch would be in a position to render, at a subsequent Board meeting following the completion of merger negotiations, its oral opinion with respect to the fairness, from a financial point of view, of the consideration to be paid to such stockholders. Representatives of BofA Merrill Lynch and Kirkland & Ellis discussed the status of negotiations and advised the Board that Avantor and New Mountain had confirmed that their due diligence investigation of the Company was complete.

On May 3, 2017, Mr. Moura informed BofA Merrill Lynch that Party A would not be participating in the equity financing and that BSPI would be providing a preferred equity financing commitment.

Later on May 3, 2017, following the increase in the trading price of VWR common stock above the negotiated merger price following the publication of market speculation of a sale of VWR to New Mountain, representatives of BofA Merrill Lynch contacted Avantor and New Mountain to press for a further price increase to $33.75 per share but were told that $33.25 per share was the best and final price that Avantor and New Mountain would offer.

In the evening of May 4, 2017, the Board held a telephonic meeting to consider the Transactions. Management reported that negotiations with Avantor and New Mountain regarding the merger had been completed, and a representative of Kirkland & Ellis described the material terms of the fully negotiated merger agreement and related documents and reviewed once again certain fiduciary responsibilities of the Board. Representatives of BofA Merrill Lynch reviewed with the Board its financial analysis of the $33.25 per share merger consideration and delivered to the Board an oral opinion, which was confirmed by delivery of a written opinion dated May 4, 2017, to the effect that, as of that date and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received by VWR stockholders, was fair, from a financial point of view, to such holders. For more information about the BofA Merrill Lynch opinion and its related financial analyses, see “— Opinion of the Company’s Financial Advisor” beginning on page 37 of this proxy statement. The full text of the written opinion of BofA Merrill Lynch is attached to this proxy statement as Annex C and is incorporated by reference in its entirety in this proxy statement. The Board considered various reasons to approve the merger agreement (see “— Recommendation of the Board and Reasons for the Merger” beginning on page 32 of this proxy statement), including certain countervailing factors. The Board then resolved unanimously to (i) determine that the Transactions are fair and in the best interests of the Company and its stockholders, (ii) approve and declare advisable the merger and the execution, delivery and performance by the Company of the merger agreement and the consummation of the Transactions, (iii) irrevocably approve for all purposes, to the extent permitted by law, Avantor, Merger Sub and their respective affiliates not to be subject to any “moratorium,” “control share acquisition,” “fair price,” “interested shareholder,” “affiliate transaction,” “business combination,” or other antitakeover laws (including Section 203 of the DGCL) of any jurisdiction that may purport to be applicable to the Company, Avantor, Merger Sub or any of their respective affiliates or the merger agreement or the Transactions with respect to any of the foregoing and (iv) recommend that the stockholders of the Company vote in favor of the adoption of the merger agreement and the merger, for an advisory and non-binding proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger and for a proposal to approve one or more adjournments of the special meeting of stockholders to solicit additional proxies, if necessary and to the extent permitted by the merger agreement. The Board then instructed the representatives of BofA Merrill Lynch to commence the go-shop process on May 5, 2017 by contacting potential additional bidders promptly the next morning.

Later in the evening of May 4, 2017, the parties executed the merger agreement, Avantor delivered executed financing commitment letters to the Company concurrently with the execution of the merger agreement and Varietal, Avantor and Merger Sub executed the voting and support agreement concurrently with the execution of the merger agreement. The Company and Avantor issued a joint press release to announce the execution of the merger agreement before the U.S. stock markets opened on the morning of May 5, 2017.

Recommendation of the Board and Reasons for the Merger

Recommendation of the Board

The Board has unanimously approved and declared the merger advisable, and determined that the Transactions are fair to and in the best interests of the Company and its stockholders and recommend that the Company’s stockholders adopt the merger agreement.

 

LOGO   32  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

The Board unanimously recommends that you vote: (1) “FOR” the adoption of the merger agreement; (2) “FOR” the advisory and non-binding proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger; and (3) “FOR” the adjournment of the special meeting, if necessary and to the extent permitted by the merger agreement, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

Reasons for the Merger

The Board has unanimously (i) determined that the Transactions are fair to and in the best interests of the Company and its stockholders, (ii) approved and declared advisable the merger and the execution, delivery and performance by the Company of the merger agreement and the consummation of the Transactions, (iii) irrevocably approve for all purposes, to the extent permitted by law, Avantor, Merger Sub and their respective affiliates not to be subject to any “moratorium,” “control share acquisition,” “fair price,” “interested shareholder,” “affiliate transaction,” “business combination,” or other antitakeover laws (including Section 203 of the DGCL) of any jurisdiction that may purport to be applicable to the Company, Avantor, Merger Sub or any of their respective affiliates or the merger agreement or the Transactions with respect to any of the foregoing and (iv) resolved to recommend that the holders of shares of VWR common stock vote in favor of the adoption of the merger agreement and the merger.

In connection with its determination to recommend the merger, the Board considered a variety of factors, including without limitation, the following:

 

  The current and historical market price per share of VWR common stock, including the market performance of VWR common stock relative to those of other participants in the Company’s industry and general market indices, and the fact that the merger consideration of $33.25 per share of VWR common stock represents a 17% premium to the unaffected closing price per share of VWR common stock on May 2, 2017 (the last trading day prior to the publication of market speculation regarding a potential sale of VWR), a 20% premium over the 30 trading day VWAP of VWR common stock as of May 2, 2017 and a 24% premium over the 90 trading day VWAP of VWR common stock as of May 2, 2017;
  The merger consideration of $33.25 per share of VWR common stock is more favorable to the Company’s stockholders than the potential value that might result from other alternatives reasonably available to the Company, including, but not limited to, a merger with a different buyer, a leveraged recapitalization or other extraordinary transaction involving the Company, acquisitions, dividends, stock repurchases and the continued operation of the Company on a standalone basis in light of a number of factors, including the risks and uncertainty associated with those alternatives;
  In the negotiations between the parties, the merger consideration of $33.25 per share of VWR common stock was the highest price per share for VWR common stock that Avantor was willing to pay, and the combination of Avantor’s agreement to pay that price, the market testing that the Company’s financial advisor had done prior to such negotiations, the Company’s “go-shop” rights and the ability of the Company to engage in negotiations and discussions with respect to unsolicited proposals that are reasonably likely to lead to superior proposals described below and under “The Merger Agreement—Go-Shop; No-Solicitation; Acquisition Proposals” would result in a sale of the Company at the highest price per share for VWR common stock that is reasonably attainable;
  There were extensive arm’s-length negotiations which, among other things, resulted in an increase in the offered merger consideration from $30.00 per share of VWR common stock to a final price of $33.25 per share of VWR common stock. Both on April 11, 2017 and later when the trading price on May 3, 2017 surpassed the negotiated merger price based on the publication of market speculation of a sale of VWR, representatives of VWR pressed New Mountain and Avantor for a further price increase but were told that $33.25 is the best and final price that Avantor would offer. The price of $33.25 is also well above the range initially offered by Party A of $28.00 and $30.00 per share of VWR common stock;
  The Company negotiated for, and secured, the right to conduct a thorough process during the “go-shop” period;
  The timing of the merger and the risk that if the Company did not accept New Mountain and Avantor’s offer at the time it was made, the Company might not have had another opportunity to do so, particularly if the markets for private and public debt and private equity fluctuated in a manner that made it more difficult to finance the merger;
  The Board’s understanding of the Company’s business, assets, financial condition, results of operations, competitive position and historical and projected financial performance, as well as the business, economic and regulatory environment;
  The Board’s understanding of developments in the Company’s primary end users, including in the pharmaceutical, biotechnology, industrial, education, government and healthcare industries, and potential changes to certain of such industries and the Company’s customer relationships resulting from consolidation;

 

  33   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

  The Board’s understanding of the evolution of the industry due to transactions among the Company’s primary suppliers, and potential changes in the Company’s relationships with such suppliers that could result from such transaction activity;
  The all-cash merger consideration, providing the Company’s stockholders with certainty of value and immediate liquidity for their shares of VWR common stock, especially when viewed against the risks and uncertainties inherent in the Company’s business, including the potential for any of the following to occur:

 

    a reduction in revenues from and/or less favorable pricing or terms with new and existing customers;
    an inability to expand the Company’s customer base in existing or new markets;
    an increase in product prices from the Company’s suppliers that the Company is not able to pass through to its customers;
    a reduction in research, development or production spending by the Company’s customers, especially those in the biopharma industry;
    an inability to access additional capital or refinance existing indebtedness;
    foreign currency exchange rate fluctuations;
    a need to record impairment charges against the Company’s goodwill, other intangible and/or other long-lived assets; and
    other risks described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.
  The fact that New Mountain and Avantor did not require management participation in the merger (either via continued employment with the combined company or the rollover of management’s equity ownership in the Company) as a condition to executing the merger agreement;
  The terms and conditions of the merger agreement and related transaction documents, including:
    the Company’s right, subject to certain conditions, for a period of 35 days from the date of the merger agreement, directly or indirectly to (A) solicit, initiate or encourage any takeover proposal or the making thereof, including by furnishing non-public information and other access to any party or its representatives pursuant to an acceptable confidentiality agreement provided that the Company will make available to Avantor any material non-public information regarding the Company or its subsidiaries furnished to such other party not previously furnished to Avantor, and (B) participate in any discussions or negotiations regarding, or furnish to any party any information with respect to, or take any other action to facilitate the making of any proposal that constitutes, or would reasonably be expected to lead to, any takeover proposal;
    the Board’s right to terminate the merger agreement in specified circumstances relating to a superior proposal, subject to the payment of a termination fee of $170 million (which amount is reduced to $85 million under specified circumstances relating to the “go-shop” period), as more fully described under “The Merger Agreement—Termination Fees and Expenses” beginning on page 68 of this proxy statement;
    the absence of a financing condition in the merger agreement;
    the fact that Avantor and Merger Sub have obtained committed debt financing and preferred equity financing for the merger, as well as the limited number and nature of the conditions to the debt and preferred equity financing; and
    the right of the Company, in the event of any breach by Avantor or Merger Sub of any of its respective representations, warranties, covenants or agreements in the merger agreement that gives rise to a failure of Avantor or Merger Sub, as applicable, to fulfill a closing condition under the merger agreement, to terminate the merger agreement and to receive from Avantor a termination fee of $300 million, as more fully described under “The Merger Agreement—Termination Fees and Expenses” beginning on page 68 of this proxy statement.
  The availability of appraisal rights for the Company’s stockholders who properly exercise their rights under Delaware law, which gives these stockholders the ability to seek and be paid a judicially determined appraisal of the “fair value” of their shares of VWR common stock;
  The likelihood of obtaining the required regulatory approvals;
  The ability of the Company’s stockholders to obtain value for a portion of the synergies of the combination of the Company with Avantor through a premium to the market price per share of VWR common stock;
  The opinion of BofA Merrill Lynch, dated May 4, 2017, to the Board as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of shares of VWR common stock (other than shares of VWR common stock held in the treasury of the Company, shares of VWR common stock owned by the Company (excluding any shares of VWR common stock owned by any subsidiary of the Company), Avantor or Merger Sub) and (ii) shares of VWR common stock as to which appraisal rights have been properly demanded and perfected in accordance with Section 262 of the DGCL) of the merger consideration to be received by such holders, as more fully described in “Opinion of the Company’s Financial Advisor;” and
  The Voting and Support Agreement with Varietal terminates in the event that the merger agreement is terminated, which would permit Varietal to support a transaction involving a “superior proposal.”

 

LOGO   34  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

In the course of its deliberations, the Board also identified and considered a number of countervailing factors and risks to the Company and its stockholders relating to the merger and the Transactions, including:

 

  If the merger is completed, the Company’s stockholders will no longer hold an interest in the Company and will not participate in any potential future earnings or growth of the Company;
  The merger may not be completed for a variety of reasons, including the failure of one or more closing conditions to be satisfied;
  Although the Board does not believe that the terms of the merger agreement would preclude a person interested in making a superior proposal from doing so, or preclude the Board from evaluating such a proposal, certain provisions of the merger agreement, including the provisions providing Avantor matching rights and the termination fee payable by the Company, may have the effect of discouraging the submission of alternative proposals;
  The merger agreement places certain restrictions on the conduct of the Company’s business during the pendency of the merger and these covenants may limit the Company’s ability to pursue business opportunities that may arise or take other actions it may otherwise wish to take during the pendency of the merger;
  The directors and executive officers of the Company may have potential interests in the merger that are different from, or in addition to, the interests of the Company’s stockholders generally, as described under “—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 42 of this proxy statement;
  The announcement of the merger may result in distracting shareholder litigation;
  The merger will have an impact on the Company’s stockholders for U.S. federal income tax purposes, as described under “U.S. Federal Income Tax Consequences of the Merger” beginning on page 71 of this proxy statement; and
  Under the merger agreement, the Company is required to pay a termination fee to Avantor if the merger agreement is terminated by Avantor or the Company, as applicable, under specified circumstances.

The Board concluded that the potentially negative factors associated with the merger and the Transactions were outweighed by the benefits that it expected the Company’s stockholders would receive as a result of the merger. For the reasons described above, the Board unanimously concluded that (i) the merger agreement and the Transactions were advisable and fair to, and in the best interests of, the Company and its stockholders and (ii) the consideration to be paid by Avantor as contemplated by the merger agreement was the best value reasonably available to the Company’s stockholders.

The foregoing discussion of the information and factors considered by the Board is not intended to be an exhaustive list of the information and factors considered by the Board, but includes the material factors considered by the Board. In view of the variety of factors considered in connection with its evaluation of the merger, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors.

Portions of this explanation of the Company’s reasons for the merger and other information presented in this section are forward-looking in nature and, therefore, should be read in light of the section entitled “Cautionary Factors Regarding Forward-Looking Statements.”

Certain Prospective Financial Information

The Company’s senior management does not as a matter of course make public projections as to future performance or earnings beyond the then-current fiscal year and is especially wary of making projections for extended earnings periods due to the unpredictability of the underlying assumptions and estimates. However, financial forecasts for the years 2017 through 2022 prepared by management were made available to the Board, Avantor and Merger Sub in connection with their respective considerations of the merger and to BofA Merrill Lynch who were authorized to use and rely upon such projections. Such projections are referred to as the VWR management forecasts in the section “—Opinion of the Company’s Financial Advisor” beginning on page 37 of this proxy statement. The Company has included the summary financial projections (the “ Projections ”) below to give its stockholders access to certain nonpublic information provided to Avantor, Merger Sub and its financial advisors for purposes of considering and evaluating the merger. The inclusion of the Projections should not be regarded as an indication that Avantor, Merger Sub or the Board, BofA Merrill Lynch or any other recipient of this information considered, or now considers, it to be an assurance of the achievement of future results. Management prepared only one set of projections in connection with the consideration of the merger, and the Board instructed management to provide that same set of projections to both BofA Merrill Lynch and Avantor.

 

  35   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

The Company advised the recipients of the Projections that its internal financial forecasts upon which the Projections were based are subjective in many respects. The Projections reflect numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, including future expansion and acquisition efforts, many of which are difficult to predict, subject to significant economic and competitive uncertainties and beyond the Company’s control. As a result, there can be no assurance that the Projections will be realized or that actual results will not be significantly higher or lower than projected. The Projections were prepared for internal use and to assist the Board, Avantor and Merger Sub in connection with their respective considerations of the merger and not with a view toward public disclosure or toward complying with GAAP, the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The Projections included herein have been prepared by or at the direction of, and are the responsibility of, the Company. KPMG LLP, the Company’s independent registered public accounting firm, has not examined or compiled any of the Projections, and accordingly, KPMG LLP does not express an opinion or any other form of assurance with respect thereto. The KPMG LLP report included in the Annual Report on Form 10-K for the year ended December 31, 2016, incorporated by reference in this proxy statement, relates to the Company’s historical financial information. It does not extend to the Projections and should not be read to do so.

The presentation of “Adjusted EBITDA” in the Projections is defined as the Company’s net income or loss adjusted for the following items: (i) interest expense, net of interest income, (ii) income tax provision or benefit, (iii) depreciation and amortization, (iv) net foreign currency remeasurement gains or losses relating to financing activities, (v) losses on extinguishment of debt, (vi) equity offering costs, (vii) charges associated with restructurings and other cost reduction initiatives, (viii) impairment charges, (ix) gains or losses upon business disposals, (x) share-based compensation expense and (xi) other costs or credits that are either isolated or cannot be expected to recur with any regularity or predictability.

The presentation of “Adjusted EPS” in the Projections is defined as the Company’s net income, adjusted for certain items, divided by the Company’s fully diluted weighted average shares outstanding as determined under GAAP. For the purposes of calculating adjusted net income, the Company’s net income or loss is first adjusted for the following items: (i) amortization of acquired intangible assets, (ii) net foreign currency remeasurement gains or losses relating to financing activities, (iii) impairment charges, (iv) losses on extinguishment of debt, (v) equity offering costs, (vi) income from changes to estimated fair value of contingent consideration and (vii) other costs or credits that are either isolated or cannot be expected to recur with any regularity or predictability. After those adjustments, the Company then adds or subtracts an assumed incremental income tax impact on the above noted pre-tax adjustments, using estimated tax rates and any other tax items that are either isolated or cannot be expected to recur with any regularity or predictability.

Projections of this type are based on estimates and assumptions that are inherently subject to factors such as industry performance, general business, economic, regulatory, market and financial conditions, as well as changes to the business, financial condition or results of operations of the Company, including the factors described under “ Cautionary Factors Regarding Forward-Looking Statements ,” which factors may cause the Projections or the underlying assumptions to be inaccurate. Since the Projections cover multiple years, such information by its nature becomes less reliable with each successive year. The Projections do not take into account any circumstances or events occurring after the date they were prepared.

Readers of this proxy statement are cautioned not to place undue reliance on the specific portions of the Projections set forth below. No one has made or makes any representation to any stockholder regarding the information included in the Projections.

For the foregoing reasons, as well as the basis and assumptions on which the Projections were compiled, the inclusion of specific portions of the Projections in this proxy statement should not be regarded as an indication that such Projections will be an accurate prediction of future events, and they should not be relied on as such. Except as required by applicable securities laws, the Company does not intend, and expressly disclaims any responsibility, to update, or otherwise revise the Projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error.

Certain of the measures included in the Projections may be considered non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the Company may not be comparable to similarly titled amounts used by

 

LOGO   36  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

other companies. The Company has not prepared a reconciliation of its non-GAAP financial measures in the projections because no such reconciliation is available without unreasonable effort due to the variability and complexity of the reconciling items that the Company excludes from such non-GAAP financial measures.

 

Fiscal Year End

($ millions, all amounts represent continuing operations)

   2017      2018      2019      2020      2021      2022  

Revenue

   $ 4,623      $ 4,904      $ 5,186      $ 5,482      $ 5,793      $ 6,120  

Adjusted EBITDA

   $ 524      $ 576      $ 632      $ 689      $ 751      $ 817  

Adjusted EPS

   $ 1.86      $ 2.06      $ 2.27      $ 2.48      $ 2.74      $ 3.04  

Opinion of the Company’s Financial Advisor

VWR has retained BofA Merrill Lynch to act as VWR’s financial advisor in connection with the merger. BofA Merrill Lynch is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. VWR selected BofA Merrill Lynch to act as VWR’s financial advisor in connection with the merger on the basis of BofA Merrill Lynch’s experience in transactions similar to the merger, its reputation in the investment community and its familiarity with VWR and its business.

On May 4, 2017, at a meeting of the Board held to evaluate the merger, BofA Merrill Lynch delivered to the Board an oral opinion, which was confirmed by delivery of a written opinion dated May 4, 2017, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received by holders of shares of VWR common stock was fair, from a financial point of view, to such holders.

The full text of BofA Merrill Lynch’s written opinion to the Board, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex C to this document and is incorporated by reference herein in its entirety. The following summary of BofA Merrill Lynch’s opinion is qualified in its entirety by reference to the full text of the opinion. BofA Merrill Lynch delivered its opinion to the Board for the benefit and use of the Board (in its capacity as such) in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to VWR or in which VWR might engage or as to the underlying business decision of VWR to proceed with or effect the merger. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and does not constitute a recommendation to any stockholder as to how to vote or act in connection with the proposed merger or any related matter.

In connection with rendering its opinion, BofA Merrill Lynch, among other things:

 

(i) reviewed certain publicly available business and financial information relating to VWR;

 

(ii) reviewed certain internal financial and operating information with respect to the business, operations and prospects of VWR furnished to or discussed with BofA Merrill Lynch by the management of VWR, including certain financial forecasts relating to VWR prepared by the management of VWR (for purposes of this section, “ VWR management forecasts ”);

 

(iii) discussed the past and current business, operations, financial condition and prospects of VWR with members of senior management of VWR;

 

(iv) reviewed the trading history for VWR common stock and a comparison of that trading history with the trading histories of other companies BofA Merrill Lynch deemed relevant;

 

(v) compared certain financial and stock market information of VWR with similar information of other companies BofA Merrill Lynch deemed relevant;

 

(vi) compared certain financial terms of the merger to financial terms, to the extent publicly available, of other transactions BofA Merrill Lynch deemed relevant;

 

(vii) considered the results of BofA Merrill Lynch’s efforts on behalf of VWR to solicit, at the direction of VWR, indications of interest from third parties with respect to a possible acquisition of VWR;

 

  37   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

(viii) reviewed drafts (a) dated May 4, 2017, of the merger agreement, (b) dated May 4, 2017, of the debt commitment letter (as defined herein) (c) dated May 4, 2017, of the preferred equity commitment letter (as defined herein), and (d) dated May 3, 2017, of the Voting and Support Agreement (for purposes of this section, such debt commitment letter, preferred equity commitment letter and Voting and Support Agreement, together with the merger agreement, the “ Transaction Agreements ,” and such drafts, the “ Draft Transaction Agreements ”); and

 

(ix) performed such other analyses and studies and considered such other information and factors as BofA Merrill Lynch deemed appropriate.

In arriving at its opinion, BofA Merrill Lynch assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with it and relied upon the assurances of the management of VWR that it was not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to the VWR management forecasts, BofA Merrill Lynch was advised by VWR, and assumed, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of VWR as to the future financial performance of VWR. BofA Merrill Lynch did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of VWR, nor did it make any physical inspection of the properties or assets of VWR. BofA Merrill Lynch did not evaluate the solvency or fair value of VWR, Avantor or any other entity under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Merrill Lynch assumed, at the direction of VWR, that the merger would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the merger, no delay, limitation, restriction or condition, including any divestiture requirements or amendments or modifications, would be imposed that would have an adverse effect on VWR or the contemplated benefits of the merger. BofA Merrill Lynch also assumed, at the direction of VWR, that the final executed Transaction Agreements would not differ in any material respect from the Draft Transaction Agreements reviewed by it.

BofA Merrill Lynch expressed no view or opinion as to any terms or other aspects or implications of the merger (other than the merger consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the merger, any related transactions or any other agreement, arrangement or understanding entered into in connection with or related to the merger or otherwise. BofA Merrill Lynch’s opinion was limited to the fairness, from a financial point of view, of the merger consideration to be received by the holders of shares of VWR common stock and no opinion or view was expressed with respect to any consideration received in connection with the merger by the holders of any class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the merger, or class of such persons, relative to the merger consideration or otherwise. Furthermore, no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to VWR or in which VWR might engage or as to the underlying business decision of VWR to proceed with or effect the merger. BofA Merrill Lynch also did not express any view or opinion with respect to, and BofA Merrill Lynch relied, at the direction of VWR, upon the assessments of representatives of VWR regarding, legal, regulatory, accounting, tax and similar matters relating to VWR or the merger, as to which matters BofA Merrill Lynch understood that VWR obtained such advice as it deemed necessary from qualified professionals. In addition, BofA Merrill Lynch expressed no opinion or recommendation as to how any stockholder should vote or act in connection with the merger or any related matter.

BofA Merrill Lynch’s opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Merrill Lynch as of, the date of its opinion. It should be understood that subsequent developments may affect its opinion, and BofA Merrill Lynch does not have any obligation to update, revise or reaffirm its opinion. The issuance of BofA Merrill Lynch’s opinion was approved by a fairness opinion review committee of BofA Merrill Lynch. Except as described in this summary, VWR imposed no other limitations on the investigations made or procedures followed by BofA Merrill Lynch in rendering its opinion.

The discussion set forth below in the section entitled “ VWR Financial Analyses ” represents a brief summary of the material financial analyses presented by BofA Merrill Lynch to the Board in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses

 

LOGO   38  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

performed by BofA Merrill Lynch, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Merrill Lynch. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Merrill Lynch.

VWR Financial Analyses

Selected Publicly Traded Companies Analysis. BofA Merrill Lynch reviewed publicly available financial and stock market information for VWR and the following seven publicly traded companies in the specialty pharmaceutical distribution and life science tools industries:

 

  Henry Schein, Inc.
  Patterson Companies, Inc.
  Agilent Technologies, Inc.
  Becton, Dickinson and Company
  Danaher Corporation
  PerkinElmer, Inc.
  Thermo Fisher Scientific Inc.

BofA Merrill Lynch reviewed, among other things, enterprise values of the selected publicly traded companies, calculated as equity values based on closing stock prices on May 4, 2017, plus debt and minority interests and less cash, as a multiple of calendar year 2017 estimated earnings before interest, taxes, depreciation and amortization, commonly referred to as EBITDA, adjusted to exclude stock-based compensation expense. The observed multiples ranged from 11.8x to 16.6x. BofA Merrill Lynch also reviewed per share equity values, based on closing stock prices on May 4, 2017, of the selected publicly traded companies as a multiple of calendar year 2017 estimated earnings per share, commonly referred to as EPS, adjusted to reflect stock-based compensation expense and to exclude amortization. The observed multiples ranged from 18.5x to 25.7x. The low to high adjusted EBITDA multiples and adjusted EPS multiples for VWR in the two-year period ended on May 2, 2017 were 10.2x to 12.3x and 13.2x to 18.5x, respectively. BofA Merrill Lynch then applied calendar year 2017 adjusted EBITDA multiples of 10.2x to 12.3x derived from the selected publicly traded companies (including VWR) to VWR’s calendar year 2017 estimated adjusted EBITDA and applied calendar year 2017 adjusted EPS multiples of 13.5x to 18.5x derived from the selected publicly traded companies to VWR’s calendar year 2017 estimated adjusted EPS. Estimated financial data of the selected publicly traded companies were based on publicly available research analysts’ estimates, and estimated financial data of VWR were based on the VWR management forecasts. This analysis indicated the following approximate implied per share equity value reference ranges for VWR, as compared to the merger consideration:

 

Implied Per Share Equity Value Reference Ranges for VWR

  

Consideration

2017E Adjusted EBITDA    2017E Adjusted EPS      

$24.25—$32.25

   $25.25—$34.50    $33.25

No company used in this analysis is identical or directly comparable to VWR. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which VWR was compared.

 

  39   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

Selected Precedent Transactions Analysis . BofA Merrill Lynch reviewed, to the extent publicly available, financial information relating to the following 15 selected transactions involving companies in the distribution/specialty distribution industry and life science tools industry:

 

Date Announced    Acquiror    Target

06/05/15

  

•    Cardinal Health, Inc.

  

•    The Harvard Drug Group

05/04/15

  

•    Patterson Companies, Inc.

  

•    Animal Health International, Inc.

01/12/15

  

•    AmerisourceBergen Corporation

  

•    MWI Veterinary Supply, Inc.

08/05/14

  

•    Walgreen Co.

  

•    Alliance Boots GmbH (55%)

07/17/14

  

•    GTCR

  

•    Cole-Parmer Instrument Company

10/23/13

  

•    McKesson Corporation

  

•    Celesio AG

02/14/13

  

•    Cardinal Health, Inc.

  

•    AssuraMed, Inc.

10/25/12

  

•    McKesson Corporation

  

•    PSS World Medical, Inc.

06/19/12

  

•    Walgreen Co.

  

•    Alliance Boots GmbH (45%)

09/22/14

  

•    Merck KGaA

  

•    Sigma-Aldrich Corporation

04/15/13

  

•    Thermo Fisher Scientific Inc.

  

•    Life Technologies Corporation

02/07/11

  

•    Danaher Corporation

  

•    Beckman Coulter Inc.

02/28/10

  

•    Merck KGaA

  

•    Millipore Corporation

05/02/07

  

•    Madison Dearborn Partners

  

•    VWR International, Inc.

02/16/04

  

•    Clayton, Dubilier & Rice

  

•    VWR International, Inc.

BofA Merrill Lynch reviewed transaction value, calculated as the enterprise value implied for the target company based on the consideration payable in the selected transaction, as a multiple of the target company’s last twelve months EBITDA. The observed multiples ranged from 7.4x to 19.8x. BofA Merrill Lynch then applied last twelve months EBITDA multiples of 11.0x to 14.5x, derived from the selected transactions and based on BofA Merrill Lynch’s professional judgment and experience, to VWR’s last twelve months actual EBITDA, adjusted to exclude stock-based compensation expense. Financial data of the selected transactions were based on publicly available information. This analysis indicated the following approximate implied per share equity value reference ranges for VWR, as compared to the merger consideration:

 

Implied Per Share Equity Value

Reference Ranges for VWR

  

Consideration

LTM Adjusted EBITDA      

$25.00—$37.25

   $33.25

No company, business or transaction used in this analysis is identical or directly comparable to VWR or the merger. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition or other values of the companies, business segments or transactions to which VWR and the merger were compared.

Discounted Cash Flow Analysis. BofA Merrill Lynch performed a discounted cash flow analysis of VWR to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that VWR was forecasted to generate from the second fiscal quarter of 2017 through fiscal year 2022 based on the VWR management forecasts. BofA Merrill Lynch calculated terminal values for VWR by applying terminal multiples of 10.5x to 12.5x, which range was selected based on BofA Merrill Lynch’s professional judgment and experience, to VWR’s estimated fiscal year 2022 adjusted EBITDA. The cash flows and terminal values were then discounted to present value as of March 31, 2017 using discount rates ranging from 7.75% to 9.25%, which were based on an estimate of VWR’s weighted average cost of capital. This analysis indicated the following approximate implied per share equity value reference ranges for VWR as compared to the merger consideration:

 

Implied Per Share Equity Value

Reference Range for VWR

   Consideration

$30.00—$41.00

   $33.25

Other Factors

BofA Merrill Lynch also noted certain additional factors that were not considered part of BofA Merrill Lynch’s material financial analyses with respect to its opinion but were referenced for informational purposes, including, among other things, the following:

 

  historical trading prices per share of VWR common stock during the 52-week period ended May 2, 2017, which ranged between $24.75 and $31.32; and
  one-year forward analyst price targets discounted by one year at VWR’s estimated midpoint cost of equity of 10.5%, which ranged between $25.25 and $31.75.

 

LOGO   40  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

Miscellaneous

As noted above, the discussion set forth above in the section entitled “ VWR Financial Analyses ” is a summary of the material financial analyses presented by BofA Merrill Lynch to the Board in connection with its opinion and is not a comprehensive description of all analyses undertaken or factors considered by BofA Merrill Lynch in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Merrill Lynch believes that its analyses summarized above must be considered as a whole. BofA Merrill Lynch further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Merrill Lynch’s analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

In performing its analyses, BofA Merrill Lynch considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of VWR. The estimates of the future performance of VWR in or underlying BofA Merrill Lynch’s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Merrill Lynch’s analyses. These analyses were prepared solely as part of BofA Merrill Lynch’s analysis of the fairness, from a financial point of view, to the holders of shares of VWR common stock of the merger consideration to be received by such holders and were provided to the Board in connection with the delivery of BofA Merrill Lynch’s opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be BofA Merrill Lynch’s view of the actual values of VWR.

The type and amount of consideration payable in the merger was determined through negotiations between the parties, rather than by any financial advisor, and was approved by the Board. The decision to enter into the merger agreement was solely that of the Board. As described above, BofA Merrill Lynch’s opinion and analyses were only one of many factors considered by the Board in its evaluation of the proposed merger and should not be viewed as determinative of the views of the Board or management with respect to the merger or the merger consideration.

VWR has agreed to pay BofA Merrill Lynch for its services in connection with the merger an aggregate fee currently estimated to be approximately $30 million, $2 million of which was payable upon delivery of its opinion and the remaining portion of which is contingent upon consummation of the merger. VWR also has agreed to reimburse BofA Merrill Lynch for its reasonable expenses incurred in connection with BofA Merrill Lynch’s engagement and to indemnify BofA Merrill Lynch, any controlling person of BofA Merrill Lynch and each of their respective directors, officers, employees, agents and affiliates against specified liabilities, including liabilities under the federal securities laws.

BofA Merrill Lynch and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Merrill Lynch and its affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of VWR, and certain of its affiliates (including MDP and certain of its affiliates and portfolio companies) and Avantor and certain of its affiliates (including New Mountain and certain of its affiliates and portfolio companies).

BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial banking and other financial services to VWR and certain of its affiliates, including MDP and certain of its affiliates and portfolio companies, and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as financial advisor to certain affiliates of VWR, including certain affiliates and portfolio companies of MDP, in connection with certain M&A transactions, (ii) having acted or acting as a book-running manager and/or underwriter for certain debt and equity offerings of VWR and certain of its affiliates, including certain affiliates and portfolio

 

  41   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

companies of MDP, (iii) having acted or acting as a bookrunner and/or manager for certain block trades by MDP of shares of VWR common stock, (iv) having acted as a dealer manager for a debt tender offer of an affiliate and portfolio company of MDP, (v) having acted or acting as an administrative agent, collateral agent, bookrunner and arranger for, and/or as a lender under, certain term loans, letters of credit, credit facilities and other credit arrangements of VWR and/or certain of its affiliates, including MDP and/or certain of its affiliates and portfolio companies (including acquisition financing), (vi) having provided or providing certain trading services to VWR and/or certain of its affiliates, including MDP and/or certain of its affiliates and portfolio companies, (vii) having provided or providing certain managed investments services and products to VWR and/or certain of its affiliates, including MDP and/or certain of its affiliates and portfolio companies and (viii) having provided or providing certain treasury management products and services to VWR and/or certain of its affiliates, including MDP and/or certain of its affiliates and portfolio companies. From May 1, 2015 through April 30, 2017, BofA Merrill Lynch and its affiliates derived aggregate revenues from VWR and its affiliates, including MDP and its affiliates and portfolio companies, of approximately $44 million for investment and corporate banking services.

In addition, BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide , investment banking, commercial banking and other financial services to Avantor and certain of its affiliates, including New Mountain and certain of its affiliates and portfolio companies, and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as financial advisor to certain affiliates of Avantor, including New Mountain and/or certain of its affiliates and portfolio companies, in connection with certain M&A transactions, (ii) having acted or acting as a book-running manager and/or underwriter for certain debt and equity offerings of certain affiliates of Avantor, including certain affiliates and portfolio companies of New Mountain, (iii) having acted or acting as an administrative agent, collateral agent, bookrunner and/or arranger for, and/or as a lender under, certain term loans, letters of credit, credit and leasing facilities and other credit arrangements of Avantor and/or certain of its affiliates, including New Mountain and/or certain of its affiliates and portfolio companies (including acquisition financing), (iv) having provided or providing certain derivatives, foreign exchange and other trading services to Avantor and/or certain of its affiliates, including New Mountain and/or certain of its affiliates and portfolio companies, (v) having provided or providing certain managed investments services and products to Avantor and/or certain of its affiliates, including New Mountain and/or certain of its affiliates and portfolio companies, and (vi) having provided or providing certain treasury management products and services to Avantor and/or certain of its affiliates, including New Mountain and/or certain of its affiliates and portfolio companies. From May 1, 2015 through April 30, 2017, BofA Merrill Lynch and its affiliates derived aggregate revenues from Avantor and its affiliates, including New Mountain and its affiliates and portfolio companies, of approximately $17  million for investment and corporate banking services.

Interests of the Company’s Directors and Executive Officers in the Merger

In considering the recommendation of the Board with respect to the merger agreement and the merger, you should be aware that the Company’s executive officers and directors have economic interests in the merger that are different from, or in addition to, those of VWR stockholders generally. These interests may create potential conflicts of interest. The Board was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger and in reaching its decision to determine that the Transactions are fair to, and in the best interests of, the Company and its stockholders, approve and declare advisable the execution, delivery and performance of the merger agreement and consummation of the merger upon the terms and subject to the conditions contained in the merger agreement and recommend that the stockholders of the Company vote for a proposal to adopt the merger agreement, for an advisory and non-binding proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger and for a proposal to approve one or more adjournments of the special meeting of stockholders to solicit additional proxies, if necessary and to the extent permitted by the merger agreement. These material interests are summarized below.

 

  the receipt of payments and benefits by executive officers under individual employment arrangements that were in place prior to the execution of the merger agreement upon certain types of terminations of employment that may occur in connection with the merger;
  the full accelerated vesting of VWR equity awards upon the effective time consistent with the terms of the merger agreement;
  retention bonuses and gross-up payments to be paid by the Company to certain of its executive officers; and
  continued indemnification rights in favor of directors and officers of the Company.

 

LOGO   42  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

Treatment of Shares of VWR Common Stock and Outstanding Equity Awards

With respect to shares of VWR common stock that the Company’s directors and executive officers beneficially own, the Company’s directors and executive officers will receive the same cash consideration per share of VWR common stock on the same terms and conditions as the other VWR stockholders.

VWR equity awards outstanding immediately prior to the effective time will generally be subject to the following treatment, unless otherwise agreed to by the parties:

 

  each VWR stock option that is outstanding and unexercised immediately prior to the effective time will become fully vested and will be cancelled and converted into the right to receive an amount in cash determined by multiplying (i) the excess of the merger consideration, if any, over the exercise price per share of VWR common stock underlying such stock option by (ii) the number of shares of VWR common stock subject to such stock option immediately prior to the effective time; provided that any VWR stock option with an exercise price per share of VWR common stock underlying such stock option that equals or exceeds the merger consideration will be cancelled without the payment of consideration; and
  each RSU that is outstanding and unvested immediately prior to the effective time will be converted into a vested right to receive cash in an amount equal to the merger consideration.

Holders of VWR equity awards at the effective time will cease to have any rights with respect to such awards other than the rights to receive the payments described above.

 

  43   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

Summary of Estimated Equity Award Payments

The following table sets forth the approximate amount of the payments that each of the Company’s directors and executive officers is entitled to receive in connection with the consummation of the merger pursuant to their equity awards held as of May 4, 2017.

 

Name   Number of
Shares
Subject to
Vested
Options
    Number
of
Shares
Subject
to
Unvested
Options
   

Weighted
Average
Exercise
Price Per
Share

($)

   

Consideration
Payable in
Respect of
Vested
Options

($)

   

Consideration
Payable in
Respect of
Unvested
Options

($)

    Number of
RSUs
   

Consideration
Payable in
Respect of
RSUs

($)

   

Total

($)

 

Manuel Brocke-Benz

Director, President and Chief

Executive Officer

    373,304       1,126,541       24.60       3,229,080       9,744,580       27,792       924,084       13,897,743  
               

Gregory L. Cowan

Senior Vice President and

Chief Financial Officer

    117,702       333,213       24.43       1,038,132       2,938,939       7,827       260,248       4,237,318  
               

Mark T. McLoughlin

Senior Vice President and

President, Americas Lab and

Distribution Services

    88,933       247,475       24.38       788,836       2,195,103       5,945       197,671       3,181,610  
               

Dr. Nils Clausnitzer

Senior Vice President and

President, EMEA-APAC Lab and

Distribution Services

    49,923       168,657       27.53       285,560       964,718       5,945       197,671       1,447,949  
               

George Van Kula

Senior Vice President,

Human Resources, General

Counsel and Secretary

    85,756       237,594       24.37       761,513       2,109,835       5,924       196,973       3,068,321  
               

Gerard J. Christian

Senior Vice President and Chief

Global Business Services

    46,607       102,276       23.69       445,563       977,759       2,371       78,836       1,502,157  
               

Ulf Kepper

Senior Vice President, VWR

Services

    46,607       98,672       23.58       450,690       954,158       2,151       71,521       1,476,369  
               

Douglas Pitts

Vice President and Corporate

Controller

    45,723       86,602       23.22       458,602       868,618       1,578       52,469       1,379,688  
               

Harry M. Jansen Kraemer, Jr.

Chairman of the Board

    18,847       3,770       21.00       230,876       46,183       6,258       208,079       485,137  
               

Nicholas W. Alexos

Director

    18,847       3,770       21.00       230,876       46,183       6,258       208,079       485,137  
               

Robert L. Barchi

Director

    18,847       3,770       21.00       230,876       46,183       6,258       208,079       485,137  
               

Edward A. Blechschmidt

Director

    13,847       3,770       21.00       169,626       46,183       6,258       208,079       423,887  
               

Robert P. DeCresce

Director

    18,847       3,770       21.00       230,876       46,183       6,258       208,079       485,137  
               

Pamela Forbes Lieberman

Director

    18,847       3,770       21.00       230,876       46,183       6,258       208,079       485,137  
               

Timothy J. Sullivan

Director

    18,847       3,770       21.00       230,876       46,183       6,258       208,079       485,137  
               

Robert J. Zollars

Director

    18,847       3,770       21.00       230,876       46,183       6,258       208,079       485,137  
                                                               

 

LOGO   44  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

Severance Provisions of Employment Arrangements

Each of the Company’s executive officers other than Mr. Kepper is entitled to certain severance benefits pursuant to his employment agreement or employment letter (each, an “ employment arrangement ”), the material terms of which are described below. Mr. Kepper is eligible for certain severance benefits as required under German law.

The employment arrangements provide that upon a termination of employment by the Company without cause or a resignation by the executive for good reason, the executive officers are entitled to certain benefits and payments. In the case of Messrs. Brocke-Benz, Cowan, McLoughlin, Clausnitzer, Van Kula, Christian and Pitts, the executive is entitled to one and a half times (or two times, in the case of Mr. Brocke-Benz) the sum of base salary then in effect and target bonus for the year in which such termination occurs, payable over 12 months and continued health benefits for a period of twelve months (or 18 months, in the case of Mr. Brocke-Benz) after such termination.

For purposes of each employment agreement or employment letter, as applicable, “cause” means any of the following: (i) the conviction of a felony or the commission of fraud with respect to VWR or any of its subsidiaries or affiliates or any of their customers or suppliers, (ii) substantial and repeated failure to perform duties as reasonably directed by the Board or a supervisor or report, after providing 15 days’ prior written notice and a reasonable opportunity to remedy such failure and (iii) gross negligence or willful misconduct with respect to VWR or any of its subsidiaries or affiliates. “Cause” will be deemed not to include any act or failure to act, unless it is done, or omitted to be done, in bad faith or without reasonable belief that an employee’s action or omission was in the best interests of VWR or any of its respective affiliates. Any act, or failure to act, based upon authority given pursuant to a direction from the Board or based upon the advice of counsel for VWR or any of its respective affiliates will be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of VWR and its affiliates. In the case of Messrs. Cowan, McLoughlin, Clausnitzer, Van Kula, Christian and Pitts, cessation of employment will not be deemed to be for cause unless and until (i) there will have been delivered to the employee a copy of a resolution duly adopted by the affirmative vote of at least a majority of the entire membership of the Board (excluding for this purpose any seat on the Board then held by such employee, if applicable) at a meeting of the Board called and held for such purpose (after reasonable notice is provided and such employee is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, that cause exists for the termination of employment, and specifying the particulars thereof in reasonable detail and (ii) if capable of cure within 30 days, such employee will be given 30 days from the date of the meeting of the Board at which opportunity was given, together with counsel, to be heard by the Board to cure the conduct specified by the Board. At any such Board meeting, an employee will be automatically recused from participation in such meeting as a member of the Board, if applicable.

For purposes of each employment agreement or employment letter, as applicable, “good reason” means VWR materially changes the authority, titles, reporting rights or obligations, and/or duties of the employee in a manner inconsistent with the position currently held or as described in the such agreement or letter, as applicable, (ii) VWR fails to make any payment to, or provide an employee with any benefit, required to be paid or provided pursuant to such agreement or letter, as applicable, (iii) VWR reduces the base salary and/or bonus entitlement of an employee described in such agreement or letter, as applicable, (iv) in the case of Messrs. Cowan, McLoughlin, Clausnitzer, Van Kula, Christian and Pitts, a relocation of the principal place of employment to a location that increases commuting distance by more than 25 miles, except for travel on company business or (v) any successor to the business of VWR fails to assume VWR’s obligations under such agreement or letter, as applicable; provided that, in order for a resignation for Good Reason to be effective, written notice of the occurrence of any event that constitutes good reason must be delivered by the employee to VWR within 180 days after such employee has actual knowledge of the occurrence of any such event and the occurrence of such event is not cured by VWR within 10 days after the date of such written notice to VWR.

Retention Bonus Arrangements

The Company has established management retention programs (“ retention programs ”) covering each of its executive officers that provide for a bonus in a fixed amount (the “ retention bonus ”), between $500,000 and $5,000,000, as well as excise tax gross-up payments (as described below). The Compensation Committee of the Board (the “ Compensation Committee ”) believes that the retention bonuses will provide appropriate retention incentives that will enable the Company to continue to benefit from the services of the Company’s management.

 

  45   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

Under the retention programs if (i) a named executive officer is employed by the Company or its affiliates (including, without limitation, Avantor and any affiliate of Avantor) on (x) May 4, 2018 if the closing date has occurred before such date or (y) if the closing date has not occurred on or before May 4, 2018, the earlier of the closing date or December 31, 2018 (the “ vesting date ”) or (ii) the named executive officer’s employment with the Company and its affiliates is terminated before the vesting date (A) by the Company for a reason other than cause, (B) by the named executive officer for good reason or (C) due to the named executive officer’s death or disability, a retention bonus will be paid in a cash lump sum to such named executive officer within 10 days of the vesting date. The right to receive a retention bonus would be forfeited upon any other termination of employment with the Company and its affiliates. The retention bonuses and excise tax gross-up payments payable to each of our named executive officers are summarized in the table and the footnotes thereto under “—Golden Parachute Compensation” beginning on page 47 of this proxy statement. The maximum aggregate compensation payable under the retention bonuses to the Company’s executive officers will not exceed $13.25 million, exclusive of any excise tax gross-up payments that may be required.

Each of Greg Cowan, Mark McLoughlin, George Van Kula, Manuel Brocke-Benz, Doug Pitts and Gerry Christian (the “ affected individuals ”) may be subject to an excise tax (the “ golden parachute excise tax ”) on payments they will or may receive in connection with the Transactions under Section 4999 of the Code. Generally, an excise tax of 20% is imposed on each individual recipient of certain “parachute payments” that, under the rules of Section 280G of the Code, exceed a certain threshold amount for such individual. Additionally, the employer of the executive making the parachute payments is denied a tax deduction for such payments. The golden parachute excise tax is due in addition to the regular income and employment taxes otherwise payable in connection with compensatory payments to the affected individuals. Payments to these executive officers that will or may be considered “parachute payments” under Section 280G of the Code that would be subject to the golden parachute excise tax include (i) the value of the full acceleration of vesting of VWR stock options and RSUs, (ii) the retention bonuses, (iii) the excise tax gross-up payments and (iv) the severance payments.

The Compensation Committee has considered the impact of the potential golden parachute excise tax on the affected individuals and has determined that the imposition of the excise tax on them would result in a significant personal tax burden that would deprive the affected individuals of a substantial portion of the value of their compensatory payments in connection with the Transactions. The Compensation Committee has assessed the costs and benefits of making gross-up payments to alleviate the effect of the golden parachute excise tax on the affected individuals to VWR, its stockholders, the surviving corporation and each of the affected individuals. The Board, upon recommendation of the Compensation Committee, determined that it was in the best interests of VWR’s stockholders to mitigate the negative tax impact to the affected individuals that would otherwise result from the Transactions, which are expected to bring significant financial benefits to VWR’s stockholders. Upon recommendation of the Compensation Committee, the Board approved that the retention bonuses payable pursuant to the gross-up management retention program, which includes each of the affected individuals, also provide for the payment of an additional bonus in an amount so that, on a net after-tax basis, the affected individuals would be in the same position as if no golden parachute excise tax had applied to him or her (the “ excise tax gross-up payment ”).

The actual amounts to be paid to the affected individuals by VWR will depend upon the value and timing of the affected individual’s receipt of the implicated payments and benefits, with any excise tax gross-up payment that becomes due to be paid not later than the sixtieth day following an event occurring which subjects the affected individual to the golden parachute excise tax.

Interests in Varietal

Messrs. Brocke-Benz, Christian, Cowan, Kepper, McLoughlin, Pitts, Van Kula, Kraemer, Barchi, Blechschmidt, DeCresce, and Zollars and Ms. Forbes Lieberman are investors in Varietal. None of the foregoing persons has direct or indirect voting or dispositive power with respect to the shares of VWR common stock held of record by Varietal. Following completion of the merger, Varietal is expected to liquidate, in which case the members would receive their pro rata portion of the merger consideration and TRA payment (as described further under “—Income Tax Receivable Agreement” beginning on page 52 of this proxy statement).

New Management Arrangements

Prior to the effective date of the merger, some or all of the Company’s executive officers may discuss or enter into agreements, arrangements or understandings with Avantor or its affiliates regarding the executive officers’ continuing employment or

 

LOGO   46  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

compensation and benefits, including equity incentive arrangements, on a going-forward basis following completion of the merger. No such new agreements, arrangements and understandings have been entered into as of the date of this proxy statement.

Golden Parachute Compensation

This section sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for each of the Company’s named executive officers, who are Messrs. Brocke-Benz, Cowan, McLoughlin, Clausnitzer and Van Kula, that is based on or otherwise relates to the merger. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules. The amounts set forth in the table are estimates based on multiple assumptions that may or may not actually occur, including assumptions described in this proxy statement and in the footnotes to the table. As a result, the actual amounts, if any, that a named executive officer will receive may materially differ from the amounts set forth in the table.

The table below assumes that (1) the effective time will occur on September 30, 2017, (2) the employment of the named executive officer will be terminated on such date in a manner entitling the named executive officer to receive severance payments and benefits under the terms of the named executive officer’s employment arrangement, (3) the named executive officer’s base salary remains unchanged from those in place as of May 4, 2017, (4) no named executive officer receives any additional equity grants or exercises any VWR stock options on or prior to the effective time, (5) the named executive officer will be entitled to the amounts payable under the applicable retention program and (6) no named executive officer enters into new agreements or is otherwise legally entitled to, prior to the effective time, additional compensation or benefits. For a narrative description of the terms and conditions applicable to the payments quantified in the table below, see “—Treatment of Shares of VWR Common Stock and Outstanding Equity Awards” and “—Severance and Change in Control Provisions of Employment Arrangements” above.

 

Name    Cash
($)
(1)
     Equity
($)
(2)
     Pension/
Non-Qualified
Deferred
Compensation
($)
     Perquisites/
Benefits
($)
(3)
     Tax
Reimbursement
($)
(4)
     Other
($)
(5)
     Total
($)
(6)
 

Manuel Brocke-Benz

     5,299,713        9,842,998               10,489        5,582,249        5,000,000        25,735,449  

Gregory L. Cowan

     1,656,699        2,949,575               9,545        2,000,058        2,125,000        8,740,877  

Mark T. McLoughlin

     1,497,401        2,198,747               13,645        1,064,790        1,000,000        5,774,583  

Dr. Nils Clausnitzer

     1,246,246        1,399,151                             1,000,000        3,645,397  

George Van Kula

     1,545,190        2,113,089               13,645        1,705,957        2,125,000        7,502,881  

 

(1) Upon termination without “cause” or resignation for “good reason,” the Company’s named executive officer’s are generally entitled to one and a half times, or two times in the case of Mr. Brocke-Benz, the sum of such named executive officer’s then current base salary, plus his target bonus for the year in which termination or resignation occurs, payable in equal installments over the 12-month period following termination.

The table below sets forth the sum of the (i) cash paid related to 2017 annual incentive and (ii) multiple of cash paid related to annual base salary and cash paid related to annual incentive that each named executive officer would be entitled to receive as severance.

 

Name    Cash Paid
Related to
2017 Annual
Incentive  ($)
     Multiple      Cash Paid
Related to
Annual Base
Salary ($)
     Cash Paid
Related to
Annual
Incentive ($)
     Total ($)  

Manuel Brocke-Benz

     912,213        2.0x        975,000        1,218,750        5,299,713  

Gregory L. Cowan

     291,699        1.5x        520,000        390,000        1,656,699  

Mark T. McLoughlin

     263,651        1.5x        470,000        352,500        1,497,401  

Dr. Nils Clausnitzer (a)

     219,926        1.5x        390,979        293,234        1,246,246  

George Van Kula

     272,065        1.5x        485,000        363,750        1,545,190  

 

  (a) The amounts of cash paid related to annual base salary and annual incentive for Dr. Clausnitzer have been converted from euros to U.S. dollars based on the exchange rate as of the close of business on May 4, 2017 (1 to 1.0969).

 

  47   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

(2) This amount represents the aggregate in-the-money value of the VWR stock options and RSUs that would vest as a direct result of the merger. This accelerated vesting is “single trigger,” and will take place upon the occurrence of a change in control as defined in the company equity plan, regardless of whether the named executive officer’s employment is terminated. This amount will become payable immediately upon the closing of the merger. For information regarding equity acceleration upon a change in control, see “—Summary of Estimated Equity Awards”. These amounts do not include payments in respect of VWR stock options or RSUs that already vested, because the named executive officer would already be entitled to the economic benefit of such equity regardless of the transaction. For information regarding all equity, including that which has already vested, see “—Summary of Estimated Equity Awards”.

 

Name    Value of Stock
Options ($)
     Value of RSUs ($)      Total ($)  

Manuel Brocke-Benz

     8,918,914        924,084        9,842,998  

Gregory L. Cowan

     2,689,327        260,248        2,949,575  

Mark T. McLoughlin

     2,001,076        197,671        2,198,747  

Dr. Nils Clausnitzer

     1,201,479        197,671        1,399,151  

George Van Kula

     1,916,116        196,973        2,113,089  
(3) Upon termination without “cause” or resignation for “good reason,” Messrs. Cowan, McLoughlin and Van Kula are generally entitled to continued health benefits for the 12-month period, or for the 18-month period in the case of Mr. Brocke-Benz, following termination and Dr. Clausnitzer will be entitled to receive health benefits in accordance with applicable German law. These benefits are “double trigger” in nature, which means that such payments are conditioned upon a qualifying termination of employment, or in the case of retention bonuses, the additional conditions described above in “— Retention Bonus Arrangements,” as opposed to “single trigger” payments, which are solely conditioned upon the consummation of the merger.
(4) These amounts include, for each of the named executive officers (other than Dr. Clausnitzer), a tax gross-up payment to make such named executive officer whole, on an after-tax basis, for any taxes imposed under Section 4999 of the Internal Revenue Code payable no later than the sixtieth day following an event occurring which subjects such named executive officer to such taxes, subject to certain conditions and exceptions as set forth in the retention programs. Additionally, Mr. Brocke-Benz’s Executive Officer Employment Agreement provides that in the event excise taxes become payable under Section 280G and Section 4999 of the Internal Revenue Code as a result of any “excess parachute payments,” as that phrase is defined by the Internal Revenue Service, upon a change of control of the Company, VWR will pay the excise tax as well as a gross-up for the impact of the excise tax payment.
(5) These amounts are payable to the named executive officers pursuant to the retention programs as described above in “—Retention Bonus Arrangements.”
(6) The cash severance amounts presented are all “double trigger” in nature. The table below summarizes the amounts which are payable on a “single trigger” and “double trigger” basis, respectively.

 

Name    Single-Trigger
($)
     Double-Trigger
($)
 

Manuel Brocke-Benz

     9,842,998        15,892,451  

Gregory L. Cowan

     2,949,575        5,791,302  

Mark T. McLoughlin

     2,198,747        3,575,836  

Dr. Nils Clausnitzer

     1,399,151        2,246,246  

George Van Kula

     2,113,089        5,389,792  

As partial consideration for the potential payments provided in the tables above, the named executive officers are bound by a confidentiality agreement as well as customary non-compete and non-solicitation provisions set forth in their respective employment arrangements. The non-compete provisions prohibit the named executive officers from engaging in or being affiliated with certain large companies in the lab supplies industries that the Company competes with while employed by the Company and for a period of one year, or eighteen (18) months in the case of Mr. Brocke-Benz, after the termination of such employment for any reason. The non-solicitation provision prohibits the named executive officer, either alone or in association with others, while employed by the Company and for a period of eighteen (18) months after the termination of such employment for any reason, from soliciting any of the Company’s business relations from doing business with the Company and from soliciting any employees to leave the employ of the Company unless such individual’s employment has been terminated for a period of one hundred eighty (180) days or longer. The named executive officer’s receipt of the payments would be contingent upon such named executive officer signing a release of claims against us.

Employee Benefits

Pursuant to the merger agreement, Avantor has agreed that for a period of not less than one year following the effective time, Avantor will, or will cause the surviving corporation to, provide to each individual who, immediately prior to the effective time, is an employee of the Company and its subsidiaries and who continues employment with Avantor following such effective time (i) salary and incentive opportunities that, in each case, are no less favorable in the aggregate (excluding any value attributable to equity-based compensation) than those provided to such employee by the Company or its subsidiaries immediately prior to the closing date of the merger and (ii) employee benefits (excluding defined benefit pension plan benefits) that are no less favorable

 

LOGO   48  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

in the aggregate than those provided to such employee by the Company or its subsidiaries immediately prior to the closing date of the merger.

Director and Officer Indemnification and Insurance

Pursuant to the merger agreement, all rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the effective time (and right to advancement of expenses) now existing in favor of any person who is or prior to the effective time becomes, or has been at any time prior to the date of the merger agreement, a director, officer, employee or agent (including as a fiduciary with respect to an employee benefit plan) of the Company, any of its subsidiaries or any of their respective predecessors (each, an “ indemnified party ”) as provided in the Company’s amended and restated certificate of incorporation, the Company’s amended and restated bylaws the organizational documents of any subsidiary of the Company or any indemnification agreement listed in the Company disclosure letter between such indemnified party and the Company or any of its subsidiaries that is in effect as of the date of the merger agreement (i) will be assumed by the surviving corporation in the merger, without further action, at the effective time, (ii) will survive the merger, (iii) will continue in full force and effect in accordance with their terms with respect to any claims against any such indemnified party arising out of such acts or omissions and (iv) for a period of six years following the date of the merger agreement will not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any such indemnified party. Avantor will ensure that the surviving corporation complies with and honors the foregoing obligations.

After the effective time, in the event of certain threatened or actual legal proceedings, whether civil, criminal or administrative, based in whole or in part on, or arising in whole or in part out of, or pertaining to the fact that at or prior to the effective time the indemnified party is or was a director, officer, employee or agent (including as a fiduciary with respect to a Company benefit plan) of the Company, its subsidiaries or any of their respective predecessors, whether in any case asserted or claimed before or after the effective time, Avantor and the surviving corporation will, jointly and severally, indemnify and hold harmless, as and to the fullest extent provided in the Company’s amended and restated certificate of incorporation or the Company’s amended and restated bylaws (or the corresponding organizational documents of the applicable subsidiary of the Company provided that if such documents provide for a lesser degree of indemnification than as is provided in the Company’s organizational documents, such indemnified party will be indemnified and held harmless as and to the fullest extent provided in the Company’s organizational documents as if they instead applied), each such indemnified party against any losses, claims, damages, liabilities, costs, expenses.

Avantor and the surviving corporation will cooperate with each indemnified party in the defense of any matter for which such indemnified party could seek indemnification hereunder. Avantor’s and the surviving corporation’s obligations relating to the foregoing paragraph will continue in full force and effect for the period beginning upon the effective time until six years from the effective time, provided that all rights to indemnification in respect of certain legal proceedings asserted or made within such period will continue until the final disposition of such proceeding.

The Company will use reasonable best efforts to obtain and fully pay the premium for, for the benefit of the past and present officers and directors of the Company, directors’ and officers’ liability insurance policies in respect of acts or omissions occurring at or prior to the effective time (including for acts or omissions occurring in connection with the approval of the merger agreement and the consummation of the Transactions) for the period beginning upon the effective time and ending six years from the effective time, covering each indemnified party and containing terms (including with respect to coverage and amounts) and conditions (including with respect to deductibles and exclusions) that are, individually and in the aggregate, no less favorable to any indemnified party than the existing D&O policies; provided that the maximum aggregate annual premium payable by the Company for such insurance policies does not exceed 300% of the aggregate annual premium for coverage for its current fiscal year under the existing D&O policies.

In the event that (i) Avantor or the surviving corporation or any of their respective successors or assigns (y) consolidates with or merges into any other party and is not the continuing or surviving corporation or entity of such consolidation or merger or (z) transfers or conveys all or a substantial portion of its properties and other assets to any party or (ii) Avantor or any of its successors or assigns dissolves the surviving corporation, then, and in each such case, Avantor will cause proper provision to be made so that the applicable successors and assigns or transferees assume the obligations described above.

 

  49   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

Financing of the Merger

We anticipate that the total funds needed to complete the Transactions, including the refinancing of our existing indebtedness, will be approximately $6.6 billion, which will be funded by a combination of preferred equity financing and debt financing (together, the “ financing ”), as described below, together with available cash on hand at each of Avantor and, after consummation of the merger, the Company. This amount includes the funds needed to (1) pay Company stockholders the amounts due under the merger agreement, (2) make payments in respect of the Company’s outstanding equity-based awards and existing TRA (as defined in the subsection entitled “— Interests of the Company’s Directors and Executive Officers in the Merger—Income Tax Receivable Agreement” beginning on page 52 of this proxy statement), as applicable, pursuant to the merger agreement and (3) pay all fees and expenses payable by Avantor and Merger Sub under the merger agreement (the foregoing clauses (1) through (3), along with the funds necessary to refinance Avantor’s, Merger Sub’s and certain of their affiliates’ existing indebtedness, the “required amount”). The merger is not conditioned on Avantor’s or Merger Sub’s ability to obtain preferred equity financing or debt financing.

Avantor and Merger Sub are required under the merger agreement to use their reasonable best efforts to obtain the financing on the terms and subject only to the conditions described in each of the commitment letters (as defined in the subsections entitled “— Preferred Equity Financing” below and “— Debt Financing” beginning on page 51 of this proxy statement). In the event any portion of the financing becomes unavailable on the terms and conditions contemplated in the commitment letters for any reason, Avantor is required under the merger agreement to use its reasonable best efforts to obtain alternative financing in an amount sufficient to complete the merger and the other Transactions and pay the required amount. As of the last practicable date before the printing of this proxy statement, each of the commitment letters remain in effect, and Avantor has not notified us of any plans to utilize alternative financing. The documentation governing the financing contemplated by each of the commitment letters has not been finalized and, accordingly, the actual terms of the financing may differ from those described in this proxy statement.

Preferred Equity Financing

On May 4, 2017, Avantor and Issuer entered into a commitment letter (the “ preferred equity commitment letter ”) with BSPI, pursuant to which (a) BSPI committed to Avantor and Issuer to purchase from Issuer, upon the terms and subject to the conditions set forth in the preferred equity commitment letter (i) 100% of the initial aggregate liquidation preference of $2 billion of a single class of series A senior preferred stock of Issuer having the terms and conditions set forth in the preferred equity commitment letter for an aggregate cash purchase price of $2 billion (the “ senior preferred stock ”) and (ii) shares of a single class of series A junior convertible preferred stock of Issuer having the terms and conditions set forth in the preferred equity commitment letter for an aggregate cash purchase price of $650 million (the “ junior preferred stock ”) and (b) Issuer committed to issue to BSPI detachable penny warrants for the purchase of the Class A common stock of Issuer in an aggregate amount equal to $100 million having the terms and conditions set forth in the preferred equity commitment letter (the “warrants” and, together with the senior preferred stock and the junior preferred stock, the “ preferred equity ”). The issuance of the preferred equity is subject to various conditions precedent, including, without limitation, the following (subject to certain exceptions and qualifications as set forth in the preferred equity commitment letter):

 

  the absence of a Company Material Adverse Effect (as defined in the merger agreement) since the date of the merger agreement;
  the prior or substantially concurrent consummation of the merger in accordance with the merger agreement;
  the prior or substantially concurrent making of the Equity Contribution (as defined in the preferred equity commitment letter);
 

the substantially concurrent refinancing of certain of the Company’s and Avantor’s existing indebtedness, including (A) the discharge of all obligations with respect to the Company’s outstanding amount of 4.625% senior notes due 2022 (the “existing notes”) issued pursuant to that certain indenture (the “indenture”), dated as of March 25, 2015, by and among VWR Funding, Inc., the guarantors party thereto, Law Debenture Trust Company of New York, as trustee, Deutsche Bank AG, London Branch, as paying agent and Deutsche Bank Luxembourg S.A., as registrar and transfer agent and (B) the full repayment of the principal, accrued and unpaid interest, fees, premium, if any, and other amounts under the Credit Agreement, dated as of September 28, 2015, among VWR Funding Inc., each of the Foreign Subsidiary Borrowers (as defined in the preferred equity commitment letter) from time to time party thereto, Citibank, N.A., as administrative agent and collateral agent and the lenders from time to time party thereto (the “ Existing Company Credit Agreement ”), under the First Lien Credit Agreement, dated as of March 10, 2017, among Avantor Performance Materials Holdings, LLC, NuSil Investments

 

LOGO   50  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

 

LLC, Avantor Holdings Sub, L.P., Jefferies Finance LLC and the other lenders from time to time party thereto (the “ Existing Borrower Credit Agreement ”) and under the Second Lien Credit Agreement dated as of March 10, 2017, among Avantor Performance Materials Holdings, LLC, NuSil Investments LLC, Avantor Holdings Sub, L.P., Jefferies Finance LLC and the other lenders from time to time party thereto (the “ Existing Second Lien Credit Agreement ”) in connection with the other Transactions, the termination of all commitments to extend credit under the Existing Company Credit Agreement, the Existing Borrower Credit Agreement and the Existing Second Lien Credit Agreement and the termination and/or release of any security interests and guarantees in connection therewith;

  the receipt of certain audited, unaudited and pro forma financial statements;
  the receipt of all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations (including the USA PATRIOT Act);
  the receipt of a preliminary offering memorandum, including certain financial statements and certain other information;
  the execution and delivery of definitive documentation in accordance with the terms of the preferred equity commitment letter;
  the payment of any applicable closing payment;
  the accuracy of certain representations and warranties;
  any applicable waiting period (and any extension thereof) or any necessary clearances or approvals to be obtained under all antitrust laws applicable to the purchase of any of the preferred equity by the purchasers and the issuance of the warrants will have expired, been otherwise terminated or been obtained;
  the prior or substantially concurrent consummation of the senior secured facilities (as defined in the subsection entitled “— Debt Financing” beginning on page 51 of this proxy statement) and consummation of the bridge facility (as defined in the subsection entitled “— Debt Financing” beginning on page 51 of this proxy statement) and/or senior unsecured notes (as contemplated by the bridge facility), as applicable, on substantially the same terms as set forth in the debt commitment letter; and
  on the closing date, concurrently with the purchase and sale of the preferred equity, there will be issued and outstanding $1 billion of additional shares of series A junior convertible preferred equity of Issuer.

Subject to specified exceptions and qualifications, the preferred equity commitment letter will automatically terminate upon the earliest to occur of (i) the termination of the merger agreement in accordance with its terms after the execution of the merger agreement and prior to the consummation of the funding set forth in the preferred equity commitment letter, (ii) the closing date of the merger and (iii) the date that is five business days after November 4, 2017 (subject to an extension in certain circumstances if certain specified regulatory approvals have not been met pursuant to the merger agreement, the “ outside date ”).

BSPI may invite other purchasers to participate in the preferred equity financing contemplated by the preferred stock commitment letter and to provide such preferred equity financing, provided that in no event will BSPI be relieved of its obligations to fund its commitments (subject to the terms and conditions and certain exceptions and qualifications set forth in the preferred equity commitment letter).

Debt Financing

Goldman Sachs Bank USA (“ GS Bank ”), Barclays Bank PLC (“ Barclays ”), Jefferies Group LLC (acting through any of its affiliates, “ Jefferies ”) and JPMorgan Chase Bank, N.A. (“ JPMorgan ” and, together with GS Bank, Barclays and Jefferies, the “ Lenders ”) have agreed to provide debt financing in an aggregate principal amount of approximately (i) USD equivalent of $5 billion in the form of senior secured first lien term loan facilities, consisting of a U.S. dollar denominated term loan facility (the “ dollar term facility ”) and a euro denominated term loan facility (together with the dollar term facility, the “ term facility ”), (ii) $500 million (which amount may be reduced by the amount of commitments under the Company’s receivables securitization facility outstanding on the closing date of the merger) in the form of a senior secured first lien revolving credit facility (together with the term facility, the “ senior secured facilities ”) and (iii) USD equivalent of $2.25 billion in the form of senior unsecured bridge facilities, consisting of a U.S. dollar-denominated bridge loan facility (the “ dollar bridge facility ”) and, if applicable, a euro-denominated bridge loan facility (together with the dollar bridge facility, the “ bridge facility ” and, together with the senior secured facilities, the “ credit facilities ”), in each case, on the terms and subject to the conditions set forth in a debt commitment letter (the “ debt commitment letter ”, and together with the preferred equity commitment letter, the “ commitment letters ”). The obligations of the Lenders to provide debt financing under the credit facilities are subject to various conditions precedent.

 

  51   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger (continued)

 

 

Subject to specified exceptions and qualifications, the debt commitments will be available to Avantor until the earliest of (i) the termination of the merger agreement in accordance with its terms after the execution of the merger agreement and prior to the consummation of the funding set forth in the debt commitment letter, (ii) the funding of the merger without the use of the credit facilities and (iii) the date that is five business days after the outside date. The Lenders’ obligation to provide the debt financing under the debt commitment letter is subject to various conditions precedent, including, without limitation, the following (subject to certain exceptions and qualifications as set forth in the debt commitment letter):

 

  the execution and delivery by the Company and its appropriate affiliates and subsidiaries of the credit documentation to which it is a party and customary closing certificates;
  the accuracy of certain representations and warranties;
  the prior or substantially concurrent making of the Equity Contribution (as defined in the debt commitment letter);
  the prior or substantially concurrent consummation of the merger in accordance with the merger agreement;
  the substantially concurrent refinancing of certain of the Company’s and Avantor’s existing indebtedness, including (A) the discharge of all obligations with respect to the existing notes and (B) the full repayment of the principal, accrued and unpaid interest, fees, premium, if any, and other amounts under the Existing Company Credit Agreement, the Existing Borrower Credit Agreement and the Existing Second Lien Credit Agreement in connection with the Transactions, the termination of all commitments to extend credit under the Existing Company Credit Agreement, the Existing Borrower Credit Agreement and the Existing Second Lien Credit Agreement and the termination and/or release of any security interests and guarantees in connection therewith;
  the absence of a Company Material Adverse Effect (as defined in the merger agreement) since the date of the merger agreement;
  the receipt of certain audited, unaudited and pro forma financial statements;
  subject to certain exceptions, the execution and delivery of certain documents and instruments required to create and perfect the security interests in the collateral;
  the receipt of all documentation and other information under applicable “know your customer” and anti-money laundering rules and regulations (including the USA PATRIOT Act) which the lenders reasonably determine is required by regulatory authorities;
  as a condition to the availability of the bridge facility, certain actions have been taken thereto and the investment banks have been afforded a marketing period following receipt of a customary preliminary offering memorandum, which includes certain financial statements; and
  the payment of the fees required pursuant to the fee letter delivered in connection with the debt commitment letter.

Income Tax Receivable Agreement

The consummation of the Transactions will constitute a change of control for purposes of the Income Tax Receivable Agreement, dated as of October 7, 2014, by and between the Company and Varietal (the “ TRA ”). On May 4, 2017, the Company and Varietal entered into a Letter Agreement (the “ TRA Letter Agreement ”), pursuant to which, among other things, the Company and Varietal have agreed that the Change of Control Payment (as defined therein) will be an amount equal to $56,238,010 to be paid by the Company to Varietal on the closing date (the “ TRA Payment ”). Upon payment of the Change of Control Payment, the Company will not have any further payment obligations under the TRA and the Company will forfeit certain rights set forth in the TRA with respect to such payment or otherwise. Also, upon payment of the Change of Control Payment, the TRA will terminate, subject to the survival of certain sections as set forth in the TRA Letter Agreement.

Delisting and Deregistration of VWR Common Stock

If the merger is completed, VWR common stock will be removed from listing on NASDAQ and deregistered under the Exchange Act and the Company will no longer file periodic reports with the SEC.

 

LOGO   52  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement

 

The summary of the material provisions of the merger agreement below and elsewhere in this proxy statement is qualified in its entirety by reference to the merger agreement, a copy of which is attached to this proxy statement as Annex A and which the Company incorporates by reference into this document. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. The Company encourages you to read the merger agreement carefully in its entirety.

The Merger

The merger agreement provides that, subject to the terms and conditions set forth in the merger agreement and in accordance with the DGCL, at the effective time, Merger Sub will be merged with and into the Company and, as a result of the merger, the separate corporate existence of Merger Sub will cease and the Company will continue as the surviving corporation. As the surviving corporation, the Company will possess the rights, powers, privileges, immunities and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the Company and Merger Sub, all as provided under Delaware law.

The closing date of the merger (the “ closing date ”) will be on the second business day following the satisfaction or (to the extent permitted by applicable law) waiver by the party or parties entitled to the benefits thereof of the conditions set forth in the merger agreement and described under “— Conditions to the Merger” below (other than those conditions that by their nature are to be satisfied on the closing date, but subject to the satisfaction or waiver of such conditions on the closing date), provided that, notwithstanding the satisfaction or waiver of the conditions set forth in the merger agreement, the Company, Avantor and Merger Sub will not be required to effect the closing of the merger until the earlier of (i) a business day during the marketing period specified by Avantor on no less than two business days’ prior written notice to the Company and (ii) the second business day following the final day of the marketing period (subject in each case to the satisfaction of conditions set forth in the merger agreement (other than any conditions that by their nature are to be satisfied on the closing date, but subject to the satisfaction or waiver of such conditions on the closing date)).

The merger will become effective at such time as the certificate of merger is duly filed with the Secretary of State of the State of Delaware or at such other time as Avantor and the Company agree and specify in the certificate of merger (the “ effective time ”).

The Merger Consideration and the Conversion of Capital Stock

At the effective time, by virtue of the merger and without any action on the part of the holder of any of the outstanding shares of VWR common stock or any shares of capital stock of Merger Sub, each share of VWR common stock that is issued and outstanding immediately prior to the effective time will be converted into the right to receive $33.25 in cash and without interest and subject to any applicable withholding taxes, other than:

 

  each share of VWR common stock that is owned by the Company (other than shares of VWR common stock that are owned by any subsidiary of the Company, which will remain outstanding), Avantor or Merger Sub immediately prior to the effective time will no longer be outstanding and will be automatically canceled and retired and will cease to exist, and no consideration will be delivered or deliverable in exchange therefor; and
  shares of VWR common stock that are held by any person who is entitled to demand and properly demands appraisal of such shares of VWR common stock pursuant to, and who complies in all respects with, Section 262 of the DGCL (“dissenting shares”).

VWR stock options, RSUs and restricted stock will be treated as described under “— VWR Stock Options, RSUs and Restricted Stock” beginning on page 62 of this proxy statement.

Each share of capital stock of Merger Sub that is issued and outstanding immediately prior to the effective time will be converted into and become one fully paid and nonassessable share of common stock, par value $0.01 per share, of the surviving corporation and will thereafter constitute the only outstanding shares of capital stock of the surviving corporation.

Payment Procedures

Prior to the effective time, Avantor will select a bank or trust company reasonably acceptable to the Company to act as paying agent for the payment of the merger consideration to former holders of shares of VWR common stock. Avantor will, or will cause

 

  53   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

the surviving corporation to, deposit with the paying agent, substantially simultaneously with the effective time, cash necessary to pay for the shares of VWR common stock converted into the right to receive the merger consideration.

As promptly as reasonably practicable after the effective time (but in no event later than two business days after the effective time), the surviving corporation or Avantor will cause the paying agent to mail to each holder of record of a certificate that immediately prior to the effective time represented outstanding shares of VWR common stock that were converted into the right to receive the merger consideration (i) a letter of transmittal (which will specify that delivery will be effected, and risk of loss and title to the certificates will pass, only upon delivery of the certificates to the paying agent, and will be in such form and have such other provisions as are customary and reasonably acceptable to the Company and Avantor) and (ii) instructions for effecting the surrender of the certificates in exchange for the merger consideration. Upon surrender of a certificate to the paying agent for cancellation, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the paying agent, the holder of such certificate will be entitled to receive in exchange therefor the amount of cash into which the shares of VWR common stock theretofore represented by such certificate are converted pursuant to the merger agreement and the certificate so surrendered will be cancelled.

A holder of shares of VWR common stock in book-entry form will, upon receipt by the Paying Agent of an “agent’s message” in customary form (or such other evidence, if any, as the paying agent may reasonably request), be entitled to receive, and the surviving corporation or Avantor will cause the paying agent to pay and deliver as promptly as reasonably practicable after the effective time (but in no event later than two business days thereafter), an amount equal to the aggregate merger consideration to which such holder is entitled thereunder and such shares of VWR common stock will be canceled.

If any cash deposited with the paying agent remains undistributed one year after the closing date, such cash will be delivered to Avantor or its designated affiliate, upon demand, and any former holder of shares of VWR common stock entitled to payment of the merger consideration who had not theretofore complied with the merger agreement will thereafter look only to Avantor or its successor-in-interest for payment of its claim for the merger consideration (subject to applicable abandoned property, escheat and other similar laws).

If any certificate for shares of VWR common stock is lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed and, if required by the surviving corporation, the posting by such person of a bond, in such reasonable amount as Avantor may direct, as indemnity against any claim that may be made against it with respect to such certificate, the paying agent will pay, in exchange for such lost, stolen or destroyed certificate, the applicable merger consideration to be paid in respect of the shares of VWR common stock formerly represented by such certificate.

VWR Representations and Warranties

The merger agreement contains representations and warranties made by the Company to Avantor and Merger Sub and representations and warranties made by Avantor and Merger Sub to the Company. The assertions embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties in connection with negotiating the terms of the merger agreement, including information contained in a confidential disclosure letter provided by the Company to Avantor and Merger Sub in connection with the signing of the merger agreement (the “ Company disclosure letter ”). The Company disclosure letter contains information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the merger agreement. Furthermore, some of those representations and warranties may not be accurate or complete as of any particular date because they are subject to a contractual standard of materiality different from that generally applicable to public disclosures to stockholders. Moreover, certain representations and warranties in the merger agreement were used for the purpose of allocating risk between the Company, Merger Sub and Avantor rather than establishing matters as facts. Accordingly, you should not rely on the representations and warranties in the merger agreement as characterizations of the actual state of facts about the Company, Merger Sub or Avantor. This description of the representations and warranties is included to provide VWR stockholders with additional information regarding the terms of the merger agreement. It is not intended to provide any other factual information about the Company, Avantor or Merger Sub.

In the merger agreement, the Company has made representations and warranties to Avantor and Merger Sub with respect to, among other things:

 

  the due organization, valid existence, and good standing of the Company and its subsidiaries;
  its capitalization, including in particular the number of outstanding shares of VWR common stock, RSUs, and the number of shares of VWR common stock issuable upon the exercise of stock options;

 

LOGO   54  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

  the vote of the VWR stockholders required to approve the merger;
  the requisite corporate power and authority to execute and deliver the merger agreement and consummate the Transactions;
  the absence of conflicts with laws, the Company’s organizational documents and contracts to which the Company or any of its subsidiaries is a party;
  the required consents and approvals of governmental authorities in connection with the Transactions;
  its SEC filings, including the financial statements contained in such filings and internal controls;
  the absence of certain undisclosed liabilities;
  the accuracy and compliance with applicable laws of the information supplied by the Company contained in this proxy statement;
  the conduct of its business and the absence of certain changes, except as contemplated by the merger agreement, including that since December 31, 2016, there has been no change, event, circumstance, effect or occurrence that, individually or in the aggregate, has had or would be reasonably be expected to have a material adverse effect on the Company;
  tax matters;
  labor and employment matters;
  matters related to the Company’s benefit plans;
  title to properties and the absence of liens;
  matters with respect to certain of the Company’s contracts;
  the absence of certain litigation;
  the Company’s and its subsidiaries’ compliance with applicable laws;
  matters with respect to the Company’s privacy policies and information security;
  compliance with the U.S. Foreign Corrupt Practices Act and other anti-corruption laws;
  compliance with certain environmental laws and regulations;
  intellectual property and information technology;
  matters related to the Company’s insurance policies;
  the absence of undisclosed brokers’ fees and expenses;
  the inapplicability of state takeover statutes to the merger;
  the receipt by the Board of a fairness opinion from Merrill Lynch, Pierce, Fenner & Smith Incorporated; and
  the absence of any material product recall.

Many of the representations and warranties in the merger agreement made by the Company are qualified by a “materiality” or “material adverse effect on the Company” standard (that is, they will not be deemed to be untrue or incorrect unless their failure to be true or correct, individually or in the aggregate, would, as the case may be, be material or have a material adverse effect on the Company). For purposes of the merger agreement, a “Company material adverse effect” generally refers to any change, event, circumstance, effect or occurrence that (i) has, or would be reasonably expected to have, a material adverse effect on the business, assets, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole, or (ii) prevents or materially delays the consummation of the merger and the other Transactions or the ability of the Company to perform its obligations under the merger agreement in any material respect.

However, the standard of “material adverse effect on the Company” generally excludes any adverse effect to the extent resulting from or arising out of:

 

  general conditions in the industries in which the Company and its subsidiaries operate;
  general economic or regulatory, legislative or political conditions or securities, credit, financial or other capital markets conditions, in each case in the United States, the European Union or elsewhere in the world in which the Company or its subsidiaries operate;
  any change or prospective change in applicable law or GAAP (or interpretation or enforcement thereof);
  any changes after the date of the merger agreement in geopolitical conditions, the outbreak or escalation of hostilities, any acts or threats of war (whether or not declared), sabotage, terrorism or any epidemics, or any escalation or worsening of any such acts or threat of war (whether or not declared), sabotage, terrorism or any epidemics;
  any hurricane, tornado, flood, volcano, earthquake or other natural or man-made disaster or any other national or international calamity or crises;

 

  55   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

  the failure of the Company to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics before, on or after the date of this Agreement, or changes or prospective changes in the market price or trading volume of shares of VWR common stock or the credit rating of the Company;
  the execution, announcement and pendency of any of the Transactions, including any legal proceeding in respect of the merger agreement or the Transactions;
  any legal or related proceedings made or brought by any of the current or former stockholders of the Company (on their own behalf or on behalf of the Company) against the Company or the Board relating to, in connection with or arising out of the merger or the other Transactions;
  to the extent resulting from the announcement of the Transactions and the merger agreement, any loss of or change in relationship with any customer, supplier, vendor, service provider, collaboration partner or any other business partner, or departure of any employee or officer, of the Company or any of its subsidiaries;
  any action taken by the Company or any of its subsidiaries at Avantor’s written request or with Avantor’s written consent or the failure to take any action by the Company or any of its subsidiaries to the extent that Avantor fails to give its consent after receipt of a written request therefor if (a) that action is prohibited by the merger agreement and (b) had such action been taken, no Company material adverse effect would have occurred;
  the identity of Avantor, Merger Sub or their respective affiliates; and
  except as to the items set forth in the first, second, third, fourth and fifth bullet points above, to the extent that the Company and its subsidiaries, taken as a whole, are disproportionately affected thereby as compared with other participants in the industries in which the Company and its subsidiaries operate (in which case only the incremental disproportionate impact or impacts may be taken into account in determining whether there has been a Company material adverse effect), subject to certain restrictions.

In the merger agreement, Avantor and Merger Sub made customary representations and warranties to the Company with respect to, among other things:

 

  the due organization, valid existence, good standing, power and authority of Avantor and Merger Sub;
  the capitalization and interim operations of Merger Sub;
  the absence of conflicts with laws, Avantor’s or Merger Sub’s organizational documents and contracts to which Avantor or Merger Sub is a party;
  the required consents and approvals of governmental authorities in connection with the Transactions;
  the accuracy and compliance with applicable laws of the information supplied by Avantor and Merger Sub contained in this proxy statement;
  the absence of undisclosed brokers’ fees and expenses;
  the absence of certain litigation;
  the ownership of shares of VWR common stock;
  the absence of contracts between Avantor or any of its affiliates, on the one hand, and any director, officer or employee of the Company or any of its subsidiaries, on the other hand;
  matters with respect to Avantor’s financing (as more fully described under “The Merger—Financing of the Merger” beginning on page 50 of this proxy statement) and sufficiency of funds;
  solvency of the surviving corporation following the consummation of the Transactions;
  Avantor and Merger Sub’s investigation of the Company and its subsidiaries; and
  the foreign person status of Avantor and Merger Sub’s investors.

The representations and warranties contained in the merger agreement and in any certificate or other writing delivered pursuant to the merger agreement will not survive the effective time. This limit does not apply to any covenant or agreement of the parties which by its terms contemplates performance after the effective time.

 

LOGO   56  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

Conduct of the Company’s Business During the Pendency of the Merger

Except for matters expressly permitted or required by the merger agreement, set forth in the Company disclosure letter, required by applicable law or agreed to in writing by Avantor, from the date of the merger agreement until the earlier of the effective time or the termination of the merger agreement, the Company will, and will cause each of its subsidiaries to, use reasonable best efforts to:

 

  conduct its and their respective businesses in the ordinary course;
  preserve intact its and their respective present business organization; and
  preserve its and their present relationships with customers, suppliers, licensors, licensees, distributors and others having material business dealings with it and them.

In addition, except as expressly permitted or required by the merger agreement, set forth in the Company disclosure letter, required by applicable law or agreed to in writing by Avantor, between the date of the merger agreement and the effective time, the Company will not, nor will it permit any of its subsidiaries to:

 

  (i) declare, set aside, establish a record date for, authorize, make or pay any dividends on, or make any other distributions (whether in cash, stock, equity securities, property or otherwise) in respect of, any of its capital stock, other than dividends and distributions of cash by a direct or indirect wholly owned subsidiary of the Company to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock (except for the settlement of Company stock options or RSUs) or (iii) repurchase, redeem, offer to redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or any of its subsidiaries or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire any such shares of capital stock (except (x) for acquisitions of shares of Company common stock in connection with the surrender of such shares by holders of Company stock options in order to pay the exercise price of Company stock options, (y) the withholding of shares of Company common stock to satisfy tax obligations with respect to awards granted under the Company equity plan and (z) acquisition by the Company of Company stock options, RSUs and restricted stock in connection with the forfeiture of such options, RSUs or restricted stock), as applicable;
  issue, deliver, sell, authorize, pledge or otherwise encumber any shares of its capital stock or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire such shares, certain indebtedness or any other rights that give any person the right to receive any economic interest of a nature accruing to the holders of shares of VWR common stock, other than issuances of shares of VWR common stock upon the exercise of VWR stock options in accordance with their terms, the vesting of RSUs in accordance with their terms or the vesting of restricted stock in accordance with their terms;
  amend, adopt any amendment to or otherwise change its organizational documents (except for immaterial or ministerial amendments), adopt any agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganizational document or adopt any “poison pill” or similar stockholder rights plan;
  acquire or agree to acquire, directly or indirectly, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any assets outside of the ordinary course of business, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any other person (other than the Company or its subsidiaries), if the aggregate amount of consideration paid or transferred by the Company and its subsidiaries would exceed $25 million;
 

except, as required pursuant to the terms of any Company benefit plan or Company benefit agreement or other written contract to which the Company or any of its subsidiaries is a party, in each case as in effect on the date of the merger agreement, or as required by applicable law (i) adopt, enter into, establish, terminate, materially amend or modify any Company benefit plan or agreement relating thereto, (ii) grant to any director or employee of the Company or its subsidiaries any increase in compensation or benefits, subject to certain exceptions, (iii) grant to any director or employee of the Company or its subsidiaries any increase in severance or termination pay, (iv) enter into any employment, consulting, severance or termination agreement with any director or employee of the Company or its subsidiaries, (v) change the actuarial assumptions applicable to any Company benefit plan or agreement related thereto, subject to certain exceptions or (vi) take any action to accelerate any rights or benefits under any Company benefit plan or agreement relating thereto; provided that clauses (i) through (vi) will not restrict the Company or any of its subsidiaries from (y) entering into or making available to newly hired employees or to existing employees (other than executive officers), in the context of promotions based on job performance or

 

  57   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

 

workplace requirements, in each case in the ordinary course of business, plans, agreements, benefits and compensation arrangements to the extent consistent with past practice, or (z) granting bonuses to newly hired employees or to existing employees (other than executive officers) in an aggregate amount not to exceed $500,000;

  make any material change in accounting methods, procedures, principles or practices or materially revalue any of its assets, except as may be required (i) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (ii) by law, including Regulation S-X promulgated under the Securities Act of 1933, as amended;
  sell, lease (as lessor), license or otherwise dispose of (including through any “spin-off”), or pledge, encumber or otherwise subject to any non-permitted lien, any properties or assets (other than certain intellectual property) that have a value, individually or in the aggregate, of more than $25 million, subject to certain specified exceptions;
  sell, assign, license, allow to lapse or expire or otherwise transfer or dispose of certain intellectual property owned by the Company or its subsidiaries that is material, individually or in the aggregate, to the Company and its subsidiaries, taken as a whole, subject to certain specified exceptions;
  (i) incur, issue, syndicate, refinance, or otherwise become liable for, or materially modify the terms of certain indebtedness, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or its subsidiaries, guarantee, assume or endorse any debt securities of another person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, subject to certain specified exceptions, or (ii) make any loans, advances or capital contributions to, or non-permitted investments in, any other person, other than to or in the Company or its subsidiaries;
  other than in accordance with the Company’s capital expenditure budget made available to Avantor, make or agree to make any capital expenditure or expenditures that in the aggregate are in excess of $10 million;
  pay, discharge, settle, compromise or satisfy, (i) any pending or threatened claims, liabilities or obligations relating to certain legal proceedings, other than any such payment, discharge, settlement, compromise or satisfaction of a claim solely for money damages in the ordinary course of business in an amount not to exceed $5 million per payment, discharge, settlement, compromise or satisfaction or $15 million in the aggregate for all such payments, discharges, settlements, compromises or satisfactions or (ii) any litigation, arbitration, or proceeding that relates to the transactions contemplated thereby;
  except as required by applicable law, make, revoke or change certain material tax elections, make any material change to any method of tax accounting, amend any material tax returns (other than any such amendment in the ordinary course of business), enter into any closing agreement with respect to taxes, or settle or compromise any material tax liability or refund; provided that the Company may settle audits in the ordinary course up to an aggregate amount of $1 million in excess of the amounts reserved in respect thereof;
  (i) except as is in the ordinary course of business consistent with past practice, enter into, or modify or amend in a manner that is adverse in any material respect to the Company certain contracts or (ii) materially modify its privacy policies or the operations or security of certain material computer systems except as required by law or in a manner that enhances protection or security;
  other than as required by applicable law, enter into any material collective bargaining agreement with, recognize or certify any labor union, labor organization, works council or group of employees of the Company or any of its subsidiaries as the bargaining representative for certain employees of the Company; or
  authorize, commit or agree to take any of the foregoing actions.

The Special Meeting

Pursuant to the terms of the merger agreement and in accordance with applicable law and the Company’s governing documents, the Company acting through the Board, will promptly and duly call and give notice of, convene and hold as promptly as practicable the special meeting of the Company’s stockholders for the purpose of the approval and adoption of the merger agreement and merger.

Unless the Board has effected an adverse recommendation change, the Board will make the board recommendation (as defined in the section entitled “— VWR Board Recommendation”) and use its reasonable best efforts to obtain the approval and adoption of the merger agreement and merger by the holders of a majority of the outstanding shares of VWR common stock entitled to vote on such matter (the “ company requisite vote ”), subject to its obligations under the go-shop and non-solicitation provisions of the merger agreement.

 

LOGO   58  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

Go-Shop; No-Solicitation; Competing Takeover Proposals

Under the merger agreement, the Company, its subsidiaries and their respective directors and officers and other representatives are permitted to, among other things, until the go-shop period end-date:

 

  directly or indirectly solicit, initiate or encourage any takeover proposal or the making thereof, including by way of furnishing non-public information and other access to any person or its representatives pursuant to an acceptable confidentiality agreement provided that prior to or substantially concurrently with the time it is provided to such other person (and in any event within 24 hours), the Company will make available to Avantor any material non-public information with respect to the Company or its subsidiaries furnished to such other person not previously furnished to Avantor; and
  directly or indirectly participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate the making of any proposal that constitutes, or would reasonably be expected to lead to, any takeover proposal.

With respect to any person other than an excluded party, beginning on the date immediately following the go-shop period end-date, the Company, its subsidiaries and their respective directors and officers will not, and the Company will direct its and its subsidiaries’ other representatives not to:

 

  directly or indirectly solicit, initiate or knowingly encourage or facilitate any inquiries, proposals or offers with respect to or that would reasonably be expected to lead to, or the submission of, any takeover proposal;
  execute or enter into any agreement or understanding with respect to any takeover proposal;
  directly or indirectly participate in any discussions or negotiations regarding, or furnish to any party any information with respect to, or take any other action to facilitate the making of any proposal that constitutes, or would reasonably be expected to lead to, any takeover proposal;
  take any action to make the provisions of any applicable law or any restrictive provision of any applicable anti-takeover provision in the Company’s organizational documents inapplicable to any transactions contemplated by a takeover proposal; or
  authorize, commit or agree to do any of the foregoing.

Except as expressly permitted by the merger agreement, beginning on the date immediately following the go-shop period end-date, the Company will, and will cause its subsidiaries and its and their respective representatives to, except with respect to any excluded party, immediately:

 

  cease all communications, solicitations, discussions and negotiations regarding any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, a takeover proposal or otherwise in connection with a takeover proposal or potential takeover proposal;
  request the prompt return or destruction of all confidential information previously furnished to any party within the last six months for the purposes of evaluating a possible takeover proposal; and
  terminate access to any physical or electronic data rooms relating to a possible takeover proposal.

Notwithstanding anything to the contrary contained in the merger agreement, prior to obtaining the company requisite vote and after the go-shop period end-date, in response to a qualifying company takeover proposal and the failure to take any such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law, the Company may:

 

  furnish non-public information and other access to the party making such qualifying company takeover proposal and its representatives pursuant to an acceptable confidentiality agreement so long as the Company also provides Avantor, in accordance with the terms of its confidentiality agreement and substantially concurrently with the time such information or access is provided to such party (and in any event within 24 hours), any material non-public information or access with respect to the Company or its subsidiaries furnished to such other party that was not previously furnished to Avantor; and
  enter into or otherwise participate in discussions or negotiations with such party and its representatives regarding such qualifying company takeover proposal, including soliciting, encouraging and facilitating the making of a revised qualifying company takeover proposal.

Within two business days after the go-shop period end date, the Company must deliver to Avantor a written notice setting forth the identity of any excluded party and each other party or group (other than Avantor and its subsidiaries) that, to the knowledge of the Company, has (or is expected to have) a material equity interest in the takeover proposal proposed by such excluded party and the material terms and conditions of the pending takeover proposal made by such excluded party (including any material terms proposed orally or supplementally and any material modifications thereto), and the Company must deliver to Avantor

 

  59   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

copies of any takeover proposal made in writing and all proposed definitive documents (including financing commitments) received by the Company or any of its representatives from any such excluded party or its representatives relating to any takeover proposal.

VWR Board Recommendation

Subject to the provisions described below, the Board has unanimously recommended that VWR stockholders vote in favor of the adoption of the merger agreement and the merger at the special meeting (the “ board recommendation ”). The Board also agreed to include the board recommendation in this proxy statement. Subject to the provisions described below, the merger agreement provides that neither the Board nor any committee of the Board will:

 

  withdraw or modify in a manner adverse to Avantor or Merger Sub, or propose publicly to withdraw or modify in a manner adverse to Avantor or Merger Sub, the board recommendation;
  approve or recommend, or propose publicly to approve or recommend, any takeover proposal;
  fail to publicly reaffirm, up to a maximum of two times (provided that, Avantor will be entitled to an additional two such reaffirmations for each intervening event or publicly announced change to any material term of a takeover proposal), the board recommendation within five business days after Avantor so requests in writing (or such fewer number of days as remain prior to the special meeting, as it may be adjourned or postponed in accordance with the merger agreement);
  fail to recommend in a solicitation/recommendation statement on Schedule 14D-9 rejection of a takeover proposal that is a tender offer or exchange offer subject to Regulation 14D under the Exchange Act (other than by Parent and its affiliates) within ten (10) business days of the commencement of such tender offer or exchange offer (or such fewer number of days as remain prior to the special meeting, as it may be adjourned or postponed in accordance with the merger agreement);
  resolve, publicly announce an intention or agree to take any of the foregoing actions (each such foregoing action, an “ adverse recommendation change ”); or
  approve or enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, option agreement, merger agreement, joint venture agreement, partnership agreement or other agreement providing for any takeover proposal (other than an acceptable confidentiality agreement entered into in accordance with the merger agreement), or resolve, agree or publicly propose to take any such action.

Notwithstanding anything to the contrary contained in the merger agreement, at any time prior to, but not after, the company requisite vote has been obtained (x) the Board may, in response to an intervening event, take or fail to take certain of the actions specified in the clauses above relating to the definition of adverse recommendation change (an “ intervening event adverse recommendation change ”) if the Board determines, in good faith, after consultation with outside counsel, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law and (y) if the Board receives a superior company proposal, the Company may terminate the merger agreement to enter into a definitive agreement with respect to such superior company proposal; provided that concurrently with such termination the Company pays any required termination fee; and provided that, prior to so making an intervening event adverse recommendation change or so terminating the merger agreement:

 

  the Company materially complies with certain provisions of the merger agreement;
  the Board gives Avantor at least four business days’ prior written notice of its intention to take such action and a description of the reasons for taking such action (which notice, in respect of a superior company proposal, will specify in writing the identity of the party or parties who made such superior company proposal and all of the material terms and conditions of such superior company proposal and attach the most current version of the relevant transaction agreement and other material definitive documents (including financing commitments));
  the Company negotiates, and causes its representatives to negotiate in good faith, with Avantor during such notice period, to the extent Avantor wishes to negotiate, to enable Avantor to revise the terms of the merger agreement in such a manner that would eliminate the need for taking such action (and in respect of a superior company proposal, would cause such superior company proposal to no longer constitute a superior company proposal);
  following the end of such notice period, the Board considers in good faith any revisions to the terms of the merger agreement offered in writing by Avantor, and determines in good faith, after consultation with outside counsel, that failure to effect such intervening event adverse recommendation change or to terminate the merger agreement to accept such superior company proposal would be reasonably likely to be inconsistent with its fiduciary duties under applicable law and, with respect to a superior company proposal, that such superior company proposal continues to constitute a superior company proposal; and

 

LOGO   60  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

  in the event of any material change to any of the terms or conditions of such superior company proposal, the Company, in each case, delivers to Avantor an additional notice consistent with that described above and a renewed notice period will commence (except that the four business day notice period will instead be equal to two business days) during which time the Company will be required to comply with the foregoing requirements anew with respect to such additional notice.

An “ excluded party ” is any person or group (other than Avantor and its subsidiaries) from which the Company received prior to the go-shop period end-date a written takeover proposal that: (a) remains pending as of, and has not been withdrawn on or prior to, the go-shop period end date and (b) the Board determines, in good faith, on or prior to the go-shop period end date, after consultation with outside counsel and a financial advisor, constitutes or would reasonably be expected to lead to a superior company proposal; provided that any party will cease to be an excluded party (i) at such time following the go-shop period end date that the takeover proposal submitted by such party is withdrawn or terminated (it being understood that any amendment, modification or replacement of such takeover proposal will not, in and of itself, be deemed a withdrawal of such takeover proposal) or (ii) if such party’s takeover proposal is not so withdrawn or terminated as of the go-shop period end date, then on the tenth business day following the go-shop period end date if the Board has not made an adverse recommendation change or given Avantor written notice of its intention to take such action, in each case as a result of such party’s takeover proposal.

An “ intervening event ” is a material event, change, effect, development, circumstance or occurrence that improves or would be reasonably likely to improve the business, financial condition or continuing results of operations of the Company and its subsidiaries, taken as a whole, that (i) is not known by the Company or the Board as of the date of the merger agreement and that was not reasonably foreseeable as of the date of the merger agreement and (ii) does not relate to a takeover proposal, provided that in no event will the following constitute, or be taken into account in determining the existence of an intervening event: (x) the fact that the Company meets or exceeds any internal or published forecasts or projections for any period, or any changes after the date of the merger agreement in the market price or trading volume of shares of VWR common stock, (y) the reasonably foreseeable consequences of the announcement of the merger agreement or the Transactions or (z) any event, fact or circumstance relating to or involving Avantor or its subsidiaries.

A “ superior company proposal ” is any written bona fide takeover proposal received after the date of the merger agreement that if consummated would result in a party or group (or the stockholders of any party) owning, directly or indirectly, (i) 50% or more of the aggregate voting power of the capital stock of the Company or of the surviving entity or the resulting direct or indirect parent of the Company or such surviving entity or (ii) 50% or more (based on the fair market value thereof, as determined by the Board) of the assets (including capital stock of the Company’s subsidiaries) of the Company and its subsidiaries, taken as a whole, on terms which the Company Board determines, in good faith, after consultation with outside counsel and a financial advisor, are (x) reasonably likely to be consummated in accordance with such terms and (y) more favorable from a financial point of view to the stockholders of the Company than the Transactions, taking into account all financial, legal, financing, regulatory and other aspects (including timing and certainty of closing) of such takeover proposal and of the merger agreement.

A “ takeover proposal ” is any inquiry, proposal or offer from any party or group (other than Avantor and its subsidiaries) relating to (i) any direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, of (y) more than 20% of the assets of the Company and its subsidiaries, taken as a whole, or (z) more than 20% of the aggregate voting power of the capital stock of the Company or (ii) any tender offer, exchange offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution, binding share exchange or similar transaction involving the Company that, if consummated, would result in any party or group (or the stockholders of any party) beneficially owning, directly or indirectly, more than 20% of the aggregate voting power of the capital stock of the Company or of the surviving entity or the resulting direct or indirect parent of the Company or such surviving entity, other than, in each case, the Transactions.

Notwithstanding the provisions described above, the merger agreement does not prohibit the Company from (i) taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act, including making any “stop-look-and-listen” communication to the stockholders of the Company, or (ii) making any disclosure to its stockholders if the Board determines, in good faith, after consultation with outside counsel, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law; provided, that, subject to certain exceptions, no action contemplated hereby will constitute an adverse recommendation change.

 

  61   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

VWR Stock Options, RSUs and Restricted Stock

VWR equity awards outstanding immediately prior to the effective time will be subject to the following treatment;

 

  each VWR stock option that is outstanding and unexercised immediately prior to the effective time, whether or not exercisable or vested, will be cancelled and converted into the right to receive an amount in cash determined by multiplying (i) the excess (if any) of the merger consideration over the exercise price per share of VWR common stock underlying such stock option by (ii) the number of shares of VWR common stock subject to such stock option immediately prior to the effective time; provided that any VWR stock option with an exercise price per share of VWR common stock underlying such stock option that equals or exceeds the merger consideration will be cancelled without the payment of consideration;
  each RSU that is outstanding immediately prior to the effective time will be converted into a vested right to receive cash in an amount equal to the merger consideration; and
  each share of restricted stock which is outstanding immediately prior to the effective time will at the effective time be converted into a vested right to receive cash in an amount equal to the merger consideration.

Holders of VWR equity awards at the effective time will cease to have any rights with respect to such awards other than the rights to receive the payments described above.

VWR Employee Compensation and Benefits

For a period of one year following the effective time (the “ continuation period ”), Avantor will provide or cause the surviving corporation to provide to each individual who is employed by the Company or its subsidiaries immediately prior to the effective time and who continues employment with Avantor, the surviving corporation or any of the Company’s subsidiaries (each, a “ continuing employee ”) (i) salary and incentive opportunities that, in each case, are no less favorable in the aggregate (excluding any value attributable to equity-based compensation) than those provided to such continuing employee by the Company or its subsidiaries immediately prior to the effective time and (ii) employee benefits (excluding defined benefit pension plan benefits) that are no less favorable in the aggregate than those provided to such continuing employee by the Company or its subsidiaries immediately prior to the effective time.

Following the continuation period, to the extent that any of the existing Company benefit plans are discontinued, each continuing employee will be immediately eligible to participate, without any waiting time, in any and all plans maintained by Avantor, the surviving corporation or their respective affiliates (the “ surviving corporation plans ”) to the extent coverage under any such plan is necessary to replace coverage under the discontinued Company benefit plan in which such continuing employee participates immediately prior to the effective time.

From and after the closing date, Avantor will or will cause the surviving corporation to assume, honor and continue during the continuation period or, if later, until all obligations thereunder have been satisfied, all of the Company’s employment, severance, retention, termination and change in control plans, policies, programs, agreements and arrangements (including any change in control severance agreement or other Company benefit agreement between the Company and any continuing employee) maintained by the Company or its subsidiaries, in each case, as in effect on the closing date, including with respect to any payments, benefits or rights arising as a result of the Transactions.

With respect to all surviving corporation plans, each continuing employee’s service with the Company or any of its subsidiaries (as well as service with any predecessor employer of the Company or any such subsidiary, to the extent service with the predecessor employer was recognized by the Company or such subsidiary) will be treated as service with Avantor or any of their respective subsidiaries; provided that such service need not be recognized (i) to the extent that such recognition would result in any duplication of benefits for the same period of service or (ii) with respect to any benefit accrual under a defined benefit pension plan.

With respect to any welfare plan maintained by Avantor or any of its subsidiaries in which any continuing employee is eligible to participate after the effective time, Avantor will, and will cause the surviving corporation to, (i) waive all limitations as to preexisting conditions and exclusions and waiting periods and actively-at-work requirements with respect to participation and coverage requirements applicable to such employees and their eligible dependents and beneficiaries, to the extent such limitations were waived, satisfied or did not apply to such employees or eligible dependents or beneficiaries under the corresponding welfare Company benefit plan in which such employees participated immediately prior to the effective time and

 

LOGO   62  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

(ii) provide continuing employees and their eligible dependents and beneficiaries with credit for any co-payments and deductibles paid prior to the effective time in satisfying any analogous deductible or out-of-pocket maximum requirements to the extent applicable under any such plan, in each case, except to the extent it would result in any duplication of benefits.

Other Covenants and Agreements

Access to Information; Confidentiality . Except if prohibited by applicable law, the Company will, and will cause each of its subsidiaries to, afford to Avantor and Avantor’s representatives reasonable access during normal business hours (under the supervision of appropriate personnel and in a manner that does not unreasonably interfere with the normal operation of the business of the Company and its subsidiaries) during the period prior to the earlier of the effective time or the termination of the merger agreement in accordance with its terms to all their respective properties, books and records, contracts and personnel (subject to, in certain circumstances, consent of the chief executive officer or general counsel of the Company as described below) and, during such period, the Company will, and will cause each of its subsidiaries to, furnish, reasonably promptly, to Avantor all information in its possession concerning its business, properties and personnel as Avantor may reasonably request, subject to certain exceptions.

Notwithstanding the foregoing, neither the Company nor any of its subsidiaries will be required to afford access or furnish information to the extent (i) such information is subject to the terms of a confidentiality agreement with a third party, (ii) such information relates to the applicable portions of the minutes of the meetings of the Board (including any presentations or other materials prepared by or for the Board) where the Board discussed the Transactions or any similar transaction involving the sale of the Company to, or combination of the Company with, any other party or (iii) the Company determines in good faith that affording such access or furnishing such information would jeopardize the attorney-client privilege of the Company or any of its subsidiaries, violate applicable law or result in significant antitrust risk for the Company or any of its subsidiaries, as applicable (provided that the Company will cooperate with Avantor in seeking, and use reasonable best efforts to secure any consent or waiver or other arrangement to allow disclosure of such information in a manner that would not result in such violation, contravention, prejudice, or loss of privilege).

Prior to the effective time, other than in the ordinary course of their respective businesses and not in connection with the Transactions, Avantor, Merger Sub and their representatives may only contact and communicate with the personnel, customers, service providers, regulators, vendors and suppliers of the Company and its subsidiaries related to the Transactions after prior consultation with and the written consent of the chief executive officer or general counsel of the Company, such consent not to be unreasonably withheld, delayed or conditioned.

Directors’ and Officers’ Indemnification and Insurance . Pursuant to the merger agreement, all rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the effective time (and rights to advancement of expenses) now existing in favor of any person who is or prior to the effective time becomes, or has been at any time prior to the date of the merger agreement, a director, officer, employee or agent (including as a fiduciary with respect to an employee benefit plan) of the Company, any of its subsidiaries or any of their respective predecessors (each, an “ indemnified party ”) as provided in the Company’s amended and restated certificate of incorporation, the Company’s amended and restated bylaws, the organizational documents of any subsidiary of the Company or any indemnification agreement listed in the Company disclosure letter between such indemnified party and the Company or any of its subsidiaries that is in effect as of the date of the merger agreement (i) will be assumed by the surviving corporation in the merger, without further action, at the effective time, (ii) will survive the merger, (iii) will continue in full force and effect in accordance with their terms with respect to any claims against any such indemnified party arising out of such acts or omissions and (iv) for a period of six years following the date of the merger agreement will not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any such indemnified party. Avantor will ensure that the surviving corporation complies with and honors the foregoing obligations.

After the effective time, in the event of certain threatened or actual legal proceedings, whether civil, criminal or administrative, based in whole or in part on, or arising in whole or in part out of, or pertaining to the fact that at or prior to the effective time the indemnified party is or was a director, officer, employee or agent (including as a fiduciary with respect to a Company benefit plan) of the Company, its subsidiaries or any of their respective predecessors, whether in any case asserted or claimed before or after the effective time, Avantor and the surviving corporation will, jointly and severally, indemnify and hold harmless, as and to the fullest extent provided in the Company’s amended and restated certificate of incorporation or the Company’s amended and restated bylaws (or the corresponding organizational documents of the applicable subsidiary of the Company provided that if

 

  63   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

such documents provide for a lesser degree of indemnification than as is provided in the Company’s organizational documents, such indemnified party will be indemnified and held harmless as and to the fullest extent provided in the Company’s organizational documents as if they instead applied), each such indemnified party against any losses, claims, damages, liabilities, costs, expenses.

Avantor and the surviving corporation will cooperate with each indemnified party in the defense of any matter for which such indemnified party could seek indemnification hereunder. Avantor’s and the surviving corporation’s obligations relating to the foregoing paragraph will continue in full force and effect for the period beginning upon the effective time until six years from the effective time, provided that all rights to indemnification in respect of certain legal proceedings asserted or made within such period will continue until the final disposition of such proceeding.

The Company will use reasonable best efforts to obtain and fully pay the premium for, for the benefit of the past and present officers and directors of the Company, directors’ and officers’ liability insurance policies in respect of acts or omissions occurring at or prior to the effective time (including for acts or omissions occurring in connection with the approval of the merger agreement and the consummation of the Transactions) for the period beginning upon the effective time and ending six years from the effective time, covering each indemnified party and containing terms (including with respect to coverage and amounts) and conditions (including with respect to deductibles and exclusions) that are, individually and in the aggregate, no less favorable to any indemnified party than the existing D&O policies; provided that the maximum aggregate annual premium payable by the Company for such insurance policies does not exceed 300% of the aggregate annual premium for coverage for its current fiscal year under the existing D&O policies.

In the event that (i) Avantor or the surviving corporation or any of their respective successors or assigns (y) consolidates with or merges into any other party and is not the continuing or surviving corporation or entity of such consolidation or merger or (z) transfers or conveys all or a substantial portion of its properties and other assets to any party or (ii) Avantor or any of its successors or assigns dissolves the surviving corporation, then, and in each such case, Avantor will cause proper provision to be made so that the applicable successors and assigns or transferees assume the obligations described above.

Public Announcements . Avantor and Merger Sub, on the one hand, and the Company, on the other hand, will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the merger and the other Transactions, and will not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, court process or by obligations pursuant to any listing agreement with any national or foreign securities exchange and except as contemplated, permitted or required by the merger agreement.

Stockholder Litigation . Until the termination of the merger agreement, the Company will provide Avantor an opportunity to participate in the defense, settlement and prosecution of any stockholder litigation against the Company or its directors relating to any of the Transactions (the “ transaction litigation ”) and consult with Avantor with respect to the defense, settlement and prosecution of any transaction litigation, including the opportunity to review and to propose comments to all material filings or responses to be made by the Company in connection with any transaction litigation, and the Company will give reasonable and good faith consideration to any comments proposed by Avantor. In no event will the Company enter into, agree to or disclose any settlement with respect to such transaction litigation without Avantor’s consent, such consent not to be unreasonably withheld, delayed or conditioned, except to the extent such settlement is fully covered by the Company’s insurance policies (other than any applicable deductible), but only if such settlement would not result in the imposition of any material restriction on the business or operations of the Company or any of its subsidiaries or affiliates.

Works Councils . The Company and its subsidiaries will comply in all material respects with all notification, consultation and other processes with respect to any works council, economic committee, union or similar body as required by applicable law to effectuate the Transactions, which may include any required notifications and consultation and other processes with respect to any works council, economic committee, union or similar body.

Financing Efforts. Avantor and Merger Sub will, and will cause their subsidiaries to, use their reasonable best efforts to obtain financing on the terms and subject only to the conditions described in the commitment letters, including using their reasonable best efforts to (i) promptly negotiate definitive agreements on the terms (including any market flex and securities demand provisions contained in the debt commitment letter) and subject only to the conditions contained in the commitment letters so that such agreements are in effect on the closing date, (ii) promptly satisfy (or obtain a waiver to) or cause the satisfaction (or

 

LOGO   64  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

waiver) of all conditions in the commitment letters and the definitive agreements for the financing applicable to, and within the control of, Avantor or Merger Sub or any of their affiliates in such documents, (iii) consummate such financing on or prior to the date on which the consummation of the merger is required to occur, (iv) enforce their rights under the commitment letters and (v) comply with and maintain in full force and effect the commitment letters.

The Company will (i) provide the financial information related to the Company and its subsidiaries necessary to satisfy the conditions set forth in the commitment letters and (ii) use its reasonable best efforts to provide, and will cause its subsidiaries and their respective representatives to use their reasonable best efforts to provide all customary and reasonable cooperation in connection with the arrangement, obtaining and syndication of the financing and the satisfaction of the conditions of the commitment letters to be satisfied as may be reasonably requested by Avantor.

Redemption of the Company’s Existing Notes . The Company will, as soon as reasonably practicable after Avantor so requests in writing, issue, or use its reasonable best efforts to cause the trustee under the indenture to issue, a conditional notice of optional redemption for some or all of the outstanding aggregate principal amount of the existing notes. The Company will assist Avantor upon reasonable request in making arrangements for redemption, defeasance, satisfaction and/or discharge of the existing notes pursuant to the indenture.

Reasonable Best Efforts

Each of the parties to the merger agreement must use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, as promptly as reasonably practicable, the merger and the other Transactions, including (i) the obtaining of all necessary or advisable actions or non-actions, waivers and consents from, the making of all necessary registrations, declarations and filings with and the taking of all reasonable steps as may be necessary to avoid certain legal proceedings by any governmental entity with respect to the merger agreement or the Transactions, (ii) the defending or contesting of certain legal proceedings, whether judicial or administrative, challenging the merger agreement or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other governmental entity vacated or reversed and (iii) the execution and delivery of any additional instruments necessary to consummate the Transactions and to fully carry out the purposes of the merger agreement.

In connection with and without limiting the foregoing, the Company and the Board must use reasonable best efforts to (i) take all action necessary to ensure that no anti-takeover law or similar statute or regulation is or becomes applicable to the Transactions or the merger agreement and (ii) if any anti-takeover law or similar statute or regulation becomes applicable to the Transactions or the merger agreement, take all action necessary to ensure that the Transactions may be consummated as promptly as practicable on the terms contemplated by the merger agreement and otherwise to minimize the effect of such statute or regulation on the Transactions and the merger agreement.

Avantor and the Company must, in consultation and cooperation with the other, (i) file with the United States Federal Trade Commission (the “ FTC ”) and the United States Department of Justice (the “ DOJ ”) the Notification and Report Form, if any, required under the HSR Act for the merger or any of the other Transactions as promptly as practicable (but in no event later than 20 business days after the date of the merger agreement), (ii) make all necessary filings as required under the FATA as promptly as practicable, (iii) make all appropriate filings, notices, applications or similar documents required under any applicable foreign antitrust law as promptly as practicable and (iv) if (x) a filing is formally or informally requested by CFIUS, (y) within 70 days of the date of the merger agreement, Avantor or the Company determines a CFIUS filing is advisable related to the Transactions or (z) an investigation by CFIUS is commenced for any other reason, then, in each case, the parties hereto must as soon as practicable submit to CFIUS a draft of a joint voluntary notice of the transaction contemplated by this Agreement (the “ CFIUS notice ”).

Each of Avantor and the Company must (i) furnish to the other party such necessary information and reasonable assistance as the other party may request in connection with its preparation of any filing or submission which is necessary under the HSR Act, the FATA, Section 721 of Title VII of the Defense Production Act of 1950, as amended (as codified at 50 U.S.C. § 4565) and the regulations promulgated thereunder, the National Industrial Security Program Operating Manual, DOD 5220.22-M (January 1995), and any supplements, amendments or revised editions thereof (the “ NISPOM ”), the International Traffic in Arms Regulations (“ ITAR ”) or any applicable foreign antitrust law, (ii) give the other party reasonable prior notice of any such filings or

 

  65   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

submissions and, to the extent reasonably practicable, of any substantive communication with, and any inquiries or requests for additional information from, the FTC, the DOJ, the U.S. State Department Directorate of Defense Trade Controls (“ DDTC ”), CFIUS, the DSS, and any other governmental entity regarding the merger or any of the other Transactions, and permit the other party to review and discuss in advance, and consider in good faith the views of, and secure the participation of, the other party in connection with, any such filings, submissions, substantive communications, substantive inquiries or requests, provided that such materials may be redacted (x) to remove references concerning the valuation of the Company or other competitively sensitive information; (y) as necessary to comply with contractual arrangements or applicable law; and (z) as necessary to address reasonable confidentiality concerns, (iii) unless prohibited by applicable law or by the applicable governmental entity, and to the extent reasonably practicable, (v) not participate in or attend any meeting or engage in any substantive conversation with any governmental entity in respect of the merger or any of the other Transactions without the other party, (w) give the other party reasonable prior notice of any such meeting or conversation, (x) in the event one party is prohibited by applicable law or by the applicable governmental entity from participating in or attending any such meeting or engaging in any such conversation, keep such party apprised with respect thereto, (y) cooperate in the filing of any substantive memoranda, white papers, filings, correspondence or other written communications explaining or defending the merger agreement, the merger or any of the other Transactions, articulating any regulatory or competitive argument or responding to requests or objections made by any governmental entity and (z) furnish the other party with copies of all filings, submissions, correspondence and communications (and memoranda setting forth the substance thereof) between it and its affiliates and their respective representatives, on the one hand, and any governmental entity or members of any governmental entity’s staff, on the other hand, with respect to the merger agreement, the merger and the other Transactions and (iv) comply with any inquiry or request from the FTC, CFIUS, DSS, DDTC, the DOJ or any other governmental entity as promptly as reasonably practicable. Avantor agrees not to extend, directly or indirectly, any waiting period under applicable antitrust laws or enter into any agreement with a governmental entity to delay or not consummate the merger or any of the other Transactions, except with the prior written consent of the Company, which consent may not be unreasonably withheld (provided such extension does not go beyond the outside date).

In furtherance and not in limitation of the foregoing, Avantor and Merger Sub agree to take promptly any and all steps necessary to avoid, eliminate or resolve each and every impediment and obtain all clearances, consents, approvals and waivers under any applicable antitrust law or the FATA that may be required by any governmental entity and required approvals by CFIUS and DSS, so as to enable the parties to close the Transactions as promptly as practicable (and in any event no later than the outside date), including committing to and effecting, by consent decree, hold separate orders, trust or otherwise, (i) the sale, license, holding separate, divestiture or other disposition of assets or businesses of Avantor or the Company or any of their respective subsidiaries, (ii) terminating, relinquishing, modifying or waiving existing relationships, ventures, contractual rights, obligations or other arrangements of Avantor or Company or their respective subsidiaries, (iii) creating any relationships, ventures, contractual rights, obligations or other arrangements of Avantor or the Company or their respective subsidiaries, and (iv) accepting all such requirements, mitigation measures, or conditions as may be requested or required by CFIUS, DSS or any other governmental entity as necessary or advisable in connection with, or as a condition of, the receipt of the required approvals by CFIUS and DSS (each a “ remedial action ”); provided that the Company will not be obligated to agree to, commit or effect, any remedial action unless such remedial action is conditioned upon, or will occur subsequent to, consummation of the Transactions. In furtherance and not in limitation of the foregoing, in the event that any litigation or other administrative or judicial action or proceeding is commenced, threatened or is foreseeable challenging any of the Transactions and such litigation, action or proceeding seeks, or would reasonably be expected to seek, to prevent, materially impede or materially delay the consummation of the Transactions, Avantor will take any and all action, including a remedial action, to avoid or resolve any such litigation, action or proceeding and each of the Company, Avantor and Merger Sub will cooperate with each other and use its reasonable best efforts to contest and resist any such litigation, action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Transactions as promptly as practicable (and in any event no later than the outside date). Notwithstanding the foregoing, nothing in the merger agreement will require or obligate Avantor and Merger Sub or any of their affiliates to take any remedial action with respect to Avantor, Merger Sub or the Company or any of their respective subsidiaries or affiliates, if any such remedial action individually or in the aggregate has had or would reasonably be expected to have a material adverse effect on the financial condition, assets, liabilities, businesses or results of operations of Avantor, the Company and their respective subsidiaries, taken as a whole.

 

LOGO   66  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

Neither Avantor nor Merger Sub will, nor will they permit their respective subsidiaries or affiliates to, acquire or agree to acquire any rights, assets, business, entity or division thereof (through acquisition, license, joint venture, collaboration or otherwise), if such acquisition would reasonably be expected to materially increase the risk of not obtaining (i) any applicable clearance, consent, approval or waiver under any applicable antitrust law or the FATA or (ii) required approvals by CFIUS and DSS with respect to the Transactions.

As soon as practicable, Avantor and the Company will submit to DSS and, to the extent applicable, any other governmental entity, notification of the Transactions pursuant to the NISPOM and any other applicable national security or industrial security regulations, and submit and request approval of measures to mitigate foreign ownership, control or influence arising as a result of the merger and the other Transactions. Each of Avantor and the Company will use its reasonable best efforts to finally and successfully obtain required approvals by CFIUS and DSS as promptly as practicable.

As soon as possible, but in no event later than twenty business days after the merger agreement, Avantor will prepare and file with DDTC a notice of the Transactions as required under the ITAR, 22 CFR 122.4(b). Each of Avantor and the Company will use reasonable best efforts to respond promptly to any inquiries received from DDTC for additional information or documentation, and to respond promptly to all inquiries and requests from DDTC in connection with such notice.

Conditions to the Merger

The respective obligation of each party to effect the merger is subject to the satisfaction or waiver on or prior to the effective time of certain conditions, including, among other conditions, the following:

 

  the absence of a legal restraint preventing or prohibiting the consummation of the merger being in effect;
  approval of the merger agreement by holders of VWR common stock constituting the company requisite vote;
  the applicable waiting period under the HSR Act and certain foreign antitrust laws have expired or terminated;
  the obtainment of any required clearances, consents, approvals and waivers under any applicable foreign antitrust law;
  obtainment of required approval by CFIUS, if applicable;
  receipt of written notice of no objections under the FATA or the preclusion of objections by the FATA due to passage of time;
  the representations and warranties of the Company (other than certain representations and warranties relating to (i) organization, standing and power, (ii) capital structure, (iii) authority, execution and delivery and enforceability, (iv) absence of a Company material adverse effect, (v) fees of brokers and other advisors and (vi) rights agreements and anti-takeover provisions) being true and correct as of the date of the merger agreement and as of the closing date as though made on and as of such date, except to the extent any such representation or warranty expressly relates to a specified date (in which case on and as of such specified date), other than for such failures to be true and correct that would not reasonably be expected to, individually or in the aggregate, have a Company material adverse effect;
  the fundamental representations and warranties of the Company relating to (i) organization, standing and power, (ii) authority, execution and delivery and enforceability, (iii) fees of brokers and other advisors and (iv) rights agreements and anti-takeover provisions are true and correct in all material respects as of the date of the merger agreement and as of the closing date as though made on and as of such date, except to the extent any such representation or warranty expressly relates to a specified date (in which case on and as of such specified date);
  the fundamental representations and warranties of the Company relating to capital structure are true and correct as of the date of the merger agreement and as of the closing date as though made on and as of such dates, except to the extent any such representation and warranty expressly relates to a specified date (in which case on and as of such specified date), except where the failure of any such representations and warranties to be true and correct would not, individually or in the aggregate, be reasonably expected to result in additional net cost, expense or liability to the Company, Avantor, Merger Sub or their respective affiliates of $15 million or more);
  the fundamental representation and warranty of the Company relating to absence of a Company material adverse effect are true and correct in all respects as of the date of the merger agreement and the closing date as though made on and as of such date, except to the extent any such representation and warranty expressly relates to a specified date (in which case on and as of such specified date);
 

the representations and warranties of Avantor and Merger Sub being true and correct as of the date of the merger agreement and as of the closing date as though made on and as of such date, except to the extent any such representation and warranty expressly relates to a specified date (in which case on and as of such specified date), other than for such failures to be true and correct that would not reasonably be expected to, individually or in the aggregate, prevent or materially delay the

 

  67   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

 

consummation of the merger and the other Transactions or the ability of Avantor or Merger Sub to perform their obligations under the merger agreement in any material respect;

  the Company, Avantor and Merger Sub having performed, in all material respects, their respective obligations required to be performed at or prior to the closing under the merger agreement; and
  the receipt of certificates executed by an executive officer of the Company, on the one hand, or Avantor and Merger Sub, on the other hand, to the effect that certain conditions described in the merger agreement have been satisfied.

Termination of the Merger Agreement

The Company, Merger Sub and Avantor may terminate the merger agreement by mutual written consent at any time before the closing date. In addition, either Avantor or the Company may terminate the merger agreement at any time before the closing date:

 

  in the event of an outside date termination;
  if CFIUS notifies Avantor or the Company in writing that CFIUS intends to send a report to the President of the United States for decision on the matter or DSS refuses to accept any remedial actions whatsoever to mitigate foreign ownership, control or influence;
  if any legal restraint permanently preventing or prohibiting the merger is in effect and becomes final and non-appealable; provided that the party seeking to terminate this Agreement pursuant to this clause complies in all material respects with its obligations relating to such legal restraint (treating Avantor and Merger Sub as one party); or
  in the event of a vote-down termination.

Avantor may also terminate the merger agreement:

  in the event of a Company breach termination; or
  if prior to the date of the special meeting an adverse recommendation change has occurred;

The Company may also terminate the merger agreement if:

 

  Avantor or Merger Sub breaches or fails to perform any of its representations, warranties or covenants contained in the merger agreement, which breach or failure to perform would give rise to the failure of a condition set forth in the merger agreement and cannot be or has not been cured prior to the earlier of (x) 30 days after the giving of written notice to Avantor or Merger Sub of such breach and (y) the second business day prior to the outside date (provided that the Company is not then in material breach of any representation, warranty or covenant contained in the merger agreement);
  (i) the Board has received a superior company proposal that did not result from a breach of the Company’s obligations under the go-shop and non-solicitation provisions of the merger agreement, (ii) the Company has complied with its obligations with respect to the provisions of the merger agreement relating to an adverse recommendation change and (iii) the Company has paid, or simultaneously with the termination of the merger agreement pays, the Company termination fee; or
  (i) all of the conditions precedent to Avantor and Merger Sub’s respective obligation to consummate the merger have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the effective time but subject to such conditions being capable of being satisfied at the effective time), (ii) Avantor or Merger Sub fail to complete the closing by the date the closing is required to have occurred pursuant to the merger agreement, (iii) the Company has delivered an written notice to Avantor confirming that, if the financing is funded, it stands ready, willing and able to consummate the merger and other Transactions and (iv) Avantor and Merger Sub fail to consummate the merger within two business days following delivery of such written confirmation to Avantor.

Termination Fees and Expenses

Except as expressly set forth in the merger agreement, all fees and expenses incurred in connection with the merger agreement, the merger and the other Transactions will be paid by the party incurring such fees or expenses, whether or not the merger is consummated.

The Company will pay to Avantor or its designee a fee of $85 million if the merger agreement is terminated during the go-shop period or after the go-shop period in connection with a takeover proposal (as described above, but substituting “50%” for each reference to “20%”) from an excluded party, or, otherwise, $170 million (the “Company termination fee”), in each case, if:

 

 

the Company terminates the merger agreement because (i) the Board has received a superior company proposal that did not result from a breach of the Company’s obligations under the go-shop and non-solicitation provisions of the merger agreement,

 

LOGO   68  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

 

(ii) the Company has complied with its obligations with respect to the provisions of the merger agreement relating to an adverse recommendation change and (iii) the Company has paid, or simultaneously with the termination of the merger agreement pays, the Company termination fee.

  Avantor terminates the merger agreement because of an adverse recommendation; or
  (i) after the date of the merger agreement, a takeover proposal (as described above, but substituting “50%” for each reference to “20%) is publicly proposed or announced or made known to the Board, (ii) thereafter the merger agreement is terminated by either Avantor or the Company as a result of an outside date termination or a vote down termination or by Avantor as the result of a Company breach termination and (iii) concurrently with or within twelve months after such termination the Company enters into a definitive agreement to consummate, or consummates, a takeover proposal (regardless of whether the takeover proposal relates to the same takeover proposal referred to in clause (i)).

Avantor will pay to the Company a fee of $300 million if:

 

  the Company or Avantor terminates the merger agreement because CFIUS notifies Avantor or the Company in writing that CFIUS intends to send a report to the President of the United States for decision on the matter or DSS refuses to accept any remedial actions whatsoever to mitigate foreign ownership, control or influence;
  the Company terminates the merger agreement because Avantor or Merger Sub breaches or fails to perform any of its representations, warranties or covenants contained in the merger agreement, which breach or failure to perform would give rise to the failure of certain conditions set forth in the merger agreement and cannot be or has not been cured prior to the earlier of (i) 30 days after the giving of written notice to Avantor or Merger Sub, as applicable, of such breach and (ii) the second business day prior to the outside date (provided that the Company is not then in material breach of any representation, warranty or covenant contained in the merger agreement);
  the Company terminates the merger agreement because (i) all of the conditions precedent to Avantor and Merger Sub’s respective obligation to consummate the merger have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the effective time but subject to such conditions being capable of being satisfied at the effective time), (ii) Avantor or Merger Sub fail to complete the closing by the date the closing is required to have occurred pursuant to the merger agreement, (iii) the Company has delivered a written notice to Avantor confirming that, if the financing is funded, it stands ready, willing and able to consummate the merger and other Transactions and (iv) Avantor and Merger Sub fail to consummate the merger within two business days following delivery of such written confirmation to Avantor; or
  Avantor terminates the merger agreement (if the Company had the right to terminate pursuant to either of the prior two paragraphs at such time) because the closing date has not occurred on or before the outside date, provided that Avantor’s material breach of the merger agreement has not been the primary cause of, or resulted in, the failure of the merger to occur on or prior to such date.

The Company and Avantor acknowledged, respectively, in the merger agreement that in no event will the Company termination fee or the Avantor termination fee be payable by the Company or Avantor, as applicable, on more than one occasion.

The merger agreement provides that in the event that the Company termination fee described above is paid to Avantor or its designee, such Company termination fee will constitute the sole and exclusive remedy of Avantor and Merger Sub against the Company and its subsidiaries and their respective current, former or future representatives for any loss suffered as a result of the failure of the Transactions to be consummated, and upon payment of the Company termination fee, none of the Company or its subsidiaries or any of their respective current, former or future representatives will have any further liability or obligation relating to or arising out of the merger agreement or the Transactions other than for a material breach that is a consequence of an act or failure to act undertaken by the breaching party with knowledge that such party’s act or failure to act would, or would be reasonably expected to, result in or constitute a breach of the merger agreement (such material breach, a “ willful breach ”) as set forth in the paragraph below.

The merger agreement further provides that if Avantor or Merger Sub breaches the merger agreement or fails to perform thereunder, the Company’s right to: (i) seek an injunction, specific performance or other equitable relief in accordance with the terms and limitations set forth in the merger agreement or (ii) terminate the merger agreement and (A) receive the Avantor termination fee if payable due to one of the triggering events set forth above and (B) if the Avantor termination fee is not payable pursuant to such triggering event, seek money damages from Avantor in the event of Avantor’s or Merger Sub’s willful breach, will be the sole and exclusive remedies (whether such remedies are sought in equity or at law, in contract, in tort or otherwise) of the Company and its former, current and future direct or indirect equity holders, controlling persons, directors, officers, employees,

 

  69   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

The Merger Agreement (continued)

 

 

legal counsel, financial advisors, agents, representatives, affiliates, members, managers, general or limited partners, successors or assignees (or any former, current or future equity holder, controlling person, director, officer, employee, legal counsel, financial advisors, agent, representative, affiliate, member, manager, general or limited partner, successor or assignee of any of the foregoing) (collectively, “ related parties ”) against Avantor, Merger Sub and their respective related parties or any lender, preferred equity investor and their respective related parties for any losses, damages, costs, expenses, obligations or liabilities arising out of or related to the merger agreement (or any breach of any representation, warranty, covenant, agreement or obligation contained therein), the Transactions (or any failure of such Transactions to be consummated), the commitment letters, the financings contemplated therein (or any failure of such financings to be consummated), or in respect of any oral representations made or alleged to be made in connection with the merger agreement, the commitment letters, the Transactions or otherwise; provided that in no event will Avantor have any monetary liability or obligations pursuant to the foregoing clauses (A) and (B) in the aggregate in excess of the amount of the Avantor termination fee and in no event will the Company or any of its related parties seek, directly or indirectly, to recover against any of Avantor, Merger Sub or their respective related parties (other than Avantor under the confidentiality agreement, to the extent set forth in and in accordance with the terms thereof) or any lender, preferred equity investor or their respective related parties, or compel payment by any lender, preferred equity investor or their respective related parties (other than Avantor under the confidentiality agreement, to the extent set forth in and in accordance with the terms thereof) or Avantor, Merger Sub or their respective related parties of, any damages or other payments whatsoever and in no event will the Company or any of its related parties seek, directly or indirectly, to recover against Avantor and Merger Sub, or compel payment by Avantor and Merger Sub of, any damages or other payments in excess of the amount of the Avantor termination fee.

While each of the Company and Avantor may pursue both a grant of specific performance in accordance with the terms and conditions of the merger agreement and the payment of the Company termination fee or the Avantor termination fee, as applicable, under no circumstances will the Company or Avantor be permitted or entitled to receive both (i) a grant of specific performance that results in the consummation of the merger and (ii) any money damages (including the Company termination fee or the Avantor termination fee, as applicable).

Specific Performance

The merger agreement provides that the parties will be entitled to an injunction or injunctions or any other appropriate form of equitable relief to prevent breaches of the merger agreement or to enforce specifically the performance of the terms and provisions thereof, and provides for the parties’ waiver of any requirement for the securing or posting of any bond or proof of damages in connection with any such remedy. The merger agreement provides that none of Avantor, Merger Sub or the Company may assert that a remedy of specific enforcement is unenforceable, invalid, contrary to applicable law or inequitable for any reason, or assert that a remedy of monetary damages would provide an adequate remedy.

The merger agreement further provides that the Company has the right to seek an injunction, specific performance or other equitable remedies in connection with enforcing Avantor and Merger Sub’s obligations to effect the closing of the merger, if and only if: (i) the marketing period has ended and Avantor is required to complete the closing of the merger and Avantor fails to complete the such closing by the date the closing is required to occur under the merger agreement, (ii) the financing (or, alternative financing, as the case may be) has been funded or will be funded in accordance with the terms of the commitment letters by the closing date of the merger and (iii) the Company has irrevocably confirmed in writing that, if specific performance is granted and the financing is funded, then the closing of the merger will occur in accordance with the merger agreement.

Governing Law

The merger agreement is governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.

 

LOGO   70  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

U.S. Federal Income Tax Consequences of the Merger

 

The following summarizes the U.S. federal income tax consequences of the merger that are generally applicable to stockholders of VWR. The following discussion is based upon the Internal Revenue Code of 1986, as amended (the “ Code ”), the Treasury regulations promulgated under the Code, and existing administrative rulings and court decisions, all of which are subject to change, possibly with retroactive effect, and to differing interpretations. Any change could affect the validity of the following discussion. There can be no assurance that the Internal Revenue Service (the “ IRS ”) will not challenge one or more of the tax considerations described herein.

This discussion does not address all aspects of U.S. federal income taxation that may be relevant to stockholders in light of their particular circumstances nor does it address any aspects of U.S. state, local or non-U.S. taxes, the alternative minimum tax or any aspects of the tax on “net investment income” imposed under Section 1411 of the Code. This discussion also does not address any special tax rules applicable to particular stockholders such as stockholders that are financial institutions, tax-exempt organizations, S corporations or any other entities or arrangements treated as partnerships or pass-through entities for U.S. federal income tax purposes (or an investor in such entities or arrangements), insurance companies, dealers in securities or traders in securities that elect to use a mark-to-market method of accounting, regulated investment companies, real estate investment trusts, stockholders who acquired their shares of VWR common stock pursuant to the exercise of compensatory stock options or otherwise in connection with the performance of services, U.S. Holders (as defined below) that have a functional currency other than the U.S. dollar, U.S. expatriates, certain former citizens or long-term residents of the United States, any person who receives consideration other than cash in the merger (or any transaction related thereto) and stockholders who hold their shares of VWR common stock as part of a hedge, straddle or other risk reduction, constructive sale or conversion transaction. This discussion is limited to holders who hold their shares of VWR common stock as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment) and does not address the U.S. federal income tax consequences to holders who demand appraisal rights under Delaware law. In addition, the following discussion does not address non-income tax consequences or the tax consequences of transactions effectuated prior or subsequent to, or concurrently with, the merger (whether or not any such transactions are undertaken in connection with the merger).

For purposes of this discussion, a “U.S. Holder” means a beneficial owner of shares of VWR common stock that is (i) an individual who is a citizen or resident of the United States, (ii) a corporation or an entity treated as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the United States or any state thereof or the District of Columbia or otherwise treated as such for U.S. federal income tax purposes, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust (a) that is subject to the primary supervision of a court within the United States and all of the substantial decisions of which one or more United States persons, as defined in Section 7701(a)(30) of the Code, have the authority to control, or (b) that has a valid election in effect under the applicable Treasury Regulations to be treated as a United States person under the Code. A “Non-U.S. Holder” is any beneficial owner of shares of VWR common stock that is neither a U.S. Holder nor a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes.

If a partner of a partnership or owner of another type of pass-through entity for U.S. federal income tax purposes is the owner of shares of VWR common stock, the tax treatment of the partner or owner will depend upon the status of the partner or owner and the activities of the partnership or other entity. Accordingly, partnerships and other pass-through entities that hold shares of VWR common stock and partners or owners of such partnerships or other entities, as applicable, should consult their own tax advisors regarding the tax consequences of the merger.

THE U.S. FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY AND ARE BASED UPON CURRENT LAW AS OF THE DATE HEREOF. HOLDERS OF SHARES OF VWR COMMON STOCK ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS.

 

  71   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

U.S. Federal Income Tax Consequences of the Merger (continued)

 

 

U.S. Holders

In General

The merger will be a taxable transaction for U.S. Holders. A U.S. Holder will recognize gain or loss equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the surrendered shares of VWR common stock. A U.S. Holder’s adjusted tax basis in the shares of VWR common stock is generally the amount paid for such shares of VWR common stock (less the amount of any distribution received by such holder treated as a tax-free return of capital). If a U.S. Holder acquired different blocks of shares of VWR common stock at different times or at different price, such U.S. Holder must determine gain or loss separately for each block of shares of VWR common stock exchanged for cash pursuant to the merger. Such gain or loss will be capital gain or loss, and any such gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period for the shares of VWR common stock is greater than one year as of the closing. A reduced rate on capital gain generally will apply to long-term capital gain of a non-corporate U.S. Holder. The deductibility of capital losses is subject to limitations.

Backup Withholding

Cash consideration received by a U.S. Holder pursuant to the merger may be subject to backup withholding. Backup withholding generally will apply only if the U.S. Holder fails to furnish a correct taxpayer identification number (“TIN”) or otherwise fails to comply with applicable backup withholding rules and certification requirements. Corporations are generally exempt from backup withholding. Each U.S. Holder should complete and sign the IRS Form W-9 (or substitute or successor form) included with the letter of transmittal and certify under penalties of perjury that such number is correct and that such U.S. Holder is not subject to backup withholding. If a U.S. Holder fails to provide the correct TIN or certification, payments received may be subject to backup withholding, currently at a 28% rate. Backup withholding is not an additional tax. Amounts so withheld can be credited against such holder’s federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.

Non-U.S. Holders

In General

A Non-U.S. Holder will generally not be subject to any U.S. federal income tax on any gain recognized upon such Non-U.S. Holder’s sale of shares of VWR common stock pursuant to the merger agreement unless (i) such Non-U.S. Holder is an individual who is present in the United States for 183 or more days during the taxable year of such disposition and certain other conditions are met, (ii) the gain is effectively connected with the conduct of a U.S. trade or business of the Non-U.S. Holder and, if an applicable income tax treaty so provides, is attributable to a permanent establishment or a fixed base maintained by such Non-U.S. Holder in the United States, or (iii) such Non-U.S. Holder’s shares of VWR common stock constitute a “U.S. real property interest” under the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA, which will generally be the case if, at any time during the shorter of the five-year period preceding the merger or the Non-U.S. Holder’s holding period for its shares of VWR common stock, VWR was a “United States real property holding corporation” and such holder held (actually or constructively) more than 5% of the shares of VWR common stock.

If a holder is a Non-U.S. Holder who is an individual and has been present in the United States for 183 or more days during the taxable year of the merger and certain other conditions are satisfied, such holder will be subject to a 30% tax (or a lower rate under an applicable tax treaty) on the gain recognized in the merger (which may be offset by certain U.S.-source capital losses).

If a holder is a Non-U.S. Holder and any gain recognized in the merger is effectively connected with a U.S. trade or business (and, in the case of certain tax treaties, is attributable to a permanent establishment or fixed base within the United States), then the Non-U.S. Holder generally will be taxed in the same manner as a U.S. Holder. If the Non-U.S. Holder is a foreign corporation, it may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the U.S. and such Non-U.S. Holder’s country of residence.

The Company believes that it is not, and will not be as of the effective date of the merger, a “U.S. real property holding corporation.” However, there is no assurance that the IRS will not challenge that determination. In the event that the IRS were to successfully assert that the Company is a U.S. real property holding corporation, then any gain recognized on the sale of VWR’s

 

LOGO   72  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

U.S. Federal Income Tax Consequences of the Merger (continued)

 

 

stock by a Non-U.S. Holder who or that held (actually or constructively pursuant to applicable stock ownership attribution rules) more than 5% of VWR’s common stock at any time during the 5-year period ending on the effective date of the merger would be treated as effective connected with the conduct of a trade or business within the United States and would therefore by subject to U.S. federal income tax at the graduated rates applicable to an individual or a corporation (depending on the Non-U.S. Holder’s status). Non-U.S. Holders should consult their tax advisors with respect to these rules.

Backup Withholding

A Non-U.S. Holder is generally not subject to backup withholding as described above under “— U.S. Holders—Backup Withholding,” provided such Non-U.S. Holder properly certifies its non-U.S. status on an IRS Form W-8BEN, W-8 BEN-E, or another appropriate version of IRS Form W-8 or otherwise establishes an exemption. Backup withholding is not an additional tax. Any amounts so withheld can be credited against such Non-U.S. Holder’s U.S. federal income tax liability, if any, and may entitle such Non-U.S. Holder to a refund, provided that the required information is timely furnished to the IRS.

THE FOREGOING DISCUSSION IS NOT INTENDED TO BE A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER. IN ADDITION, THE DISCUSSION DOES NOT ADDRESS TAX CONSEQUENCES WHICH MAY VARY WITH, OR ARE CONTINGENT ON, A STOCKHOLDER’S INDIVIDUAL CIRCUMSTANCES OR TO CERTAIN TYPES OF STOCKHOLDERS MENTIONED ABOVE. MOREOVER, THE DISCUSSION DOES NOT ADDRESS ANY NON-INCOME TAX OR ANY FOREIGN, STATE OR LOCAL TAX CONSEQUENCES OF THE MERGER. ACCORDINGLY, EACH STOCKHOLDER IS STRONGLY URGED TO CONSULT WITH SUCH STOCKHOLDER’S OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES OF THE MERGER TO SUCH STOCKHOLDER.

 

  73   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Regulatory Matters

 

Antitrust Approval in the U.S.

Under the HSR Act and the rules promulgated under that Act by the FTC, the transaction may not be completed until notifications have been given to the United States Department of Justice (the “ Antitrust Division ”) and the FTC and until the specified waiting period has been terminated or has expired. The initial waiting period is 30 days, but this period may be shortened if the reviewing agency grants “early termination” of the waiting period, or it may be lengthened if the parties “pull and refile” the notifications and/or the reviewing agency determines that further investigation is required and issues a formal request, or “second request,” for additional information and documentary material.

Antitrust Approval in Non-U.S. Jurisdictions

The merger is also conditioned on (1) the expiration or termination of any applicable waiting period (and any extension thereof) or receipt of any necessary approval or clearance required under applicable foreign antitrust law and (2) the expiration or termination of any applicable waiting period (and any extension thereof) or receipt of any necessary approval or clearance required under applicable foreign antitrust law. Foreign antitrust authorities in applicable jurisdictions may take action under the antitrust laws of their jurisdictions including, without limitation, seeking to enjoin the completion of the merger or permitting completion of the merger subject to regulatory conditions. There can be no assurance that a challenge to the merger under foreign antitrust laws will not be made or, if such a challenge is made, that it would not be successful.

CFIUS Approval (if applicable)

Section 721 of the Defense Production Act, as well as related Executive Orders and regulations, authorizes the President or CFIUS to review transactions which could result in control of a U.S. business by a foreign person. Under the Defense Production Act and Executive Order 11858, as amended by Executive Order 13456, CFIUS reviews certain covered transactions that are voluntarily submitted to CFIUS or that are unilaterally reviewed by CFIUS. In general, CFIUS review of a covered transaction occurs in an initial 30-day review period that may be extended by CFIUS for an additional 45-day investigation period. In unusual circumstances, the parties may withdraw the notification with CFIUS’s approval without prejudice, and refile it in order to gain more time. In certain circumstances, the 30-day review and (potentially) 45-day investigation period may be repeated. At the close of its review or investigation, CFIUS may decline to take any action relative to the covered transaction, may impose mitigation terms to resolve any national security concerns with the covered transaction, may send a report to the President recommending that the transaction be suspended or prohibited, or provide notice to the President that CFIUS cannot agree on a recommendation relative to the covered transaction. The President has 15 days under the Defense Production Act to act on CFIUS’s report.

Under the merger agreement, the parties have agreed to submit a joint voluntary notice to CFIUS if (1) a filing is formally or informally requested by CFIUS, (2) within 70 days of the date of the merger agreement, Avantor or the Company determines a CFIUS filing is advisable related to the Transactions or (3) an investigation by CFIUS is commenced for any other reason. If a CFIUS filing is made, the merger is subject to the condition that the CFIUS approval will have been obtained. In such case, the merger would be conditioned on the issuance by CFIUS of a written notification that it has concluded a review of the notification voluntarily provided pursuant to the Defense Production Act, and determined not to conduct a full investigation of the Transactions or, if a 45-day investigation is deemed to be required, notification that CFIUS has concluded action with respect to the Transactions, thereby clearing the Transactions.

FIRB Approval

The merger is also conditioned on (i) the issuance of a no objection notification by the Treasurer of the Government of Australia after review of the merger by the FIRB or (ii) the preclusion of a no objection notification by passage of time from making any order or decision under Division 2 of Part 3 of FATA. Under FATA, certain acquisitions by a foreign person of securities, assets or Australian land, and actions taken in relation to entities (being corporations and unit trusts) and businesses that have a

 

LOGO   74  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Regulatory Matters (continued)

 

 

connection to Australia may require advance notification to the Treasurer. The FIRB examines proposals by foreign persons to invest in Australia and makes recommendations to the Treasurer on whether those proposals are suitable for approval under the government’s foreign investment policy. On June 1, 2017, a notification to the FIRB in Australia was submitted.

 

  75   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Appraisal Rights

 

Under Section 262 of the DGCL, any holder of record of shares of VWR common stock who has not voted in favor of the merger, who continuously holds such shares of VWR common stock through the effective date of the merger, who complies with the provisions of Section 262 of the DGCL and who does not wish to accept the merger consideration may elect to exercise appraisal rights in lieu of receiving the merger consideration. If the merger is completed, a stockholder who properly demanded appraisal of his, her or its shares of VWR common stock prior to the vote being taken on the adoption of the merger agreement and who did not vote in favor of adoption of the merger agreement and who otherwise complies with the provisions of Section 262 of the DGCL may petition the Delaware Court of Chancery to determine the “fair value” of his, her or its shares of VWR common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, and receive payment of such fair value of the shares of VWR common stock in cash, together with interest, if any, on the amount determined to be the fair value, subject to Section 262 of the DGCL. The “fair value” of your shares of VWR common stock as determined by the Delaware Court of Chancery may be more or less than, or the same as, the $33.25 per share of VWR common stock that you are otherwise entitled to receive under the terms of the merger agreement. Stockholders that are entitled and wish to exercise appraisal rights must strictly comply with the provisions of Section 262 of the DGCL.

The following discussion is a summary of the law pertaining to appraisal rights under the DGCL. The full text of Section 262 of the DGCL is attached to this proxy statement as Annex D . All references in Section 262 of the DGCL to a “stockholder” and in this summary to a “stockholder” are to the record holder of the shares of VWR common stock.

Under Section 262 of the DGCL, when a merger is submitted for approval at a meeting of stockholders, as in the case of the merger agreement, the Company, not less than 20 days prior to such meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in the notice a copy of Section 262 of the DGCL. This proxy statement constitutes such notice, and the applicable statutory provisions are attached to this proxy statement as Annex D . This summary of appraisal rights is not a complete summary of all applicable requirements or the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the text of Section 262 of the DGCL attached as Annex  D . Any stockholder who wishes to exercise appraisal rights or who wishes to preserve the right to do so should review the following discussion and Annex D carefully and in its entirety. Failure to strictly comply with the procedures of Section 262 of the DGCL in a timely and proper manner will result in the loss of appraisal rights. Stockholders that validly withdraw, fail to perfect or otherwise lose their appraisal rights will be entitled to receive the merger consideration, without interest, provided by the merger agreement. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of VWR common stock, the Company believes that if a stockholder is considering exercising such rights, such stockholder should seek the advice of legal counsel.

A VWR stockholder wishing to exercise the right to seek an appraisal of their shares of VWR common stock must do ALL of the following:

 

  The stockholder must deliver to the Company a written demand for appraisal before the vote on the merger agreement at the special meeting.
  The stockholder must not vote in favor of the proposal to adopt the merger agreement. Because a properly executed and dated proxy that does not contain voting instructions will, unless revoked, be voted in favor of the proposal to adopt the merger agreement, a stockholder who submits a proxy and who wishes to exercise appraisal rights must abstain from voting or instruct that such stockholder’s shares of VWR common stock be voted against such proposal.
  The stockholder must continuously hold the shares of VWR common stock from the date of making the demand through the effective time. The stockholder will lose appraisal rights if the stockholder transfers the shares of VWR common stock before the effective time.
  The stockholder must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of his, her or its shares of VWR common stock within 120 days after the effective time. The surviving corporation is under no obligation to file such petition and has no intention of doing so.

Neither voting, in person or by proxy, against, abstaining from voting on nor failing to vote on the proposal to adopt the merger agreement will constitute a written demand for appraisal as required by Section 262 of the DGCL. The written demand for appraisal must be in addition to and separate from any proxy or vote.

 

LOGO   76  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Appraisal Rights (continued)

 

 

Only a holder of record of shares of VWR common stock issued and outstanding immediately prior to the effective time may demand appraisal rights for the shares of VWR common stock registered in that holder’s name. A demand for appraisal must be executed by or on behalf of the stockholder of record, fully and correctly, as the stockholder’s name appears on the stock certificates. The demand must reasonably inform the Company of the identity of the stockholder and that the stockholder intends thereby to demand appraisal of his, her or its shares of VWR common stock.

If the shares of VWR common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of the demand should be made in that capacity, and if the shares of VWR common stock are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, the agent is acting as agent for such owner or owners. A record holder, such as a broker who holds shares of VWR common stock as nominee for several beneficial owners, may exercise appraisal rights with respect to the shares of VWR common stock issued and outstanding immediately prior to the effective time held for one or more beneficial owners while not exercising such rights with respect to the shares of VWR common stock held for other beneficial owners; in such case, however, the written demand should set forth the number of shares of VWR common stock issued and outstanding immediately prior to the effective time as to which appraisal is sought and where no number of shares of VWR common stock is expressly mentioned the demand will be presumed to cover all shares of VWR common stock which are held in the name of the record owner.

IF A STOCKHOLDER HOLDS SHARES OF VWR COMMON STOCK THROUGH A BROKER WHO IN TURN HOLDS THE SHARES OF VWR COMMON STOCK THROUGH A CENTRAL SECURITIES DEPOSITORY NOMINEE SUCH AS CEDE & CO., A DEMAND FOR APPRAISAL OF SUCH SHARES OF VWR COMMON STOCK MUST BE MADE BY OR ON BEHALF OF THE DEPOSITORY NOMINEE AND MUST IDENTIFY THE DEPOSITORY NOMINEE AS RECORD HOLDER. STOCKHOLDERS WHO HOLD THEIR SHARES OF VWR COMMON STOCK IN BROKERAGE ACCOUNTS OR OTHER NOMINEE FORMS, AND WHO WISH TO EXERCISE APPRAISAL RIGHTS, SHOULD CONSULT WITH THEIR BROKERS OR NOMINEES TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE NOMINEE HOLDER TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES OF VWR COMMON STOCK. A PERSON HAVING A BENEFICIAL INTEREST IN SHARES OF VWR COMMON STOCK HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BROKER OR NOMINEE, MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT APPRAISAL RIGHTS.

A stockholder who elects to exercise appraisal rights under Section 262 of the DGCL should mail or deliver a written demand to:

VWR Corporation

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, PA 19087

(610) 386-1700

Attn: Corporate Secretary

If the merger is completed, the Company will give written notice of the effective time within ten days after such effective time to each former VWR stockholder who did not vote in favor of adopting the merger agreement and who properly made a written demand for appraisal in accordance with Section 262 of the DGCL. Within 120 days after the effective time, but not later, either the surviving corporation or any stockholder who has properly made a written demand for appraisal of his, her or its shares of VWR common stock and otherwise complied with the requirements of Section 262 of the DGCL may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of VWR common stock held by all such dissenting stockholders. A person who is the beneficial owner of shares of VWR common stock held in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file the petition described in the previous sentence. The surviving corporation is under no obligation to file any petition and has no intention of doing so. Stockholders who desire to have their shares of VWR common stock appraised should initiate any petitions necessary for the perfection of their appraisal rights within the time periods and in the manner prescribed in Section 262 of the DGCL.

Within 120 days after the effective time, any stockholder who has complied with the provisions of Section 262 of the DGCL to that point in time will be entitled to receive from the surviving corporation, upon written request, a statement setting forth the aggregate number of shares of VWR common stock not voted in favor of the merger agreement and with respect to which the

 

  77   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Appraisal Rights (continued)

 

 

Company has received demands for appraisal, and the aggregate number of holders of those shares of VWR common stock. The statement must be mailed within 10 days after such written request has been received by the surviving corporation or within 10 days after the expiration of the period for delivery of demands for appraisal, whichever is later. A person who is the beneficial owner of such shares of VWR common stock held in a voting trust or by a nominee on behalf of such person may, in such person’s own name, request from the corporation the statement described in the previous sentence. The surviving corporation must mail this statement to the stockholder within the later of ten days of receipt of the request and ten days after expiration of the period for delivery of demands for appraisal.

If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to the surviving corporation, the surviving corporation will then be obligated, within 20 days after receiving service of a copy of the petition, to provide the Delaware Court of Chancery with a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares of VWR common stock and with whom agreements as to the value of their shares of VWR common stock have not been reached by the surviving corporation. After notice to dissenting stockholders who demanded appraisal of their shares of VWR common stock as required by the Delaware Court of Chancery, the Delaware Court of Chancery is empowered to conduct a hearing upon the petition, and to determine those stockholders who have complied with Section 262 and who have become entitled to the appraisal rights provided by such section.

The Delaware Court of Chancery may require the stockholders demanding appraisal who hold certificated shares of VWR common stock to submit their stock certificates to the Register in the Delaware Court of Chancery for notation thereon of the pendency of the appraisal proceedings. If the stockholder fails to comply with the court’s direction, the Delaware Court of Chancery may dismiss the proceeding as to the stockholder. In addition, the Delaware Court of Chancery will dismiss the proceedings as to all holders of such shares of VWR common stock who are otherwise entitled to appraisal rights unless (1) the total number of shares of VWR common stock entitled to appraisal exceeds 1% of the outstanding shares of VWR common stock, or (2) the value of the consideration provided in the merger for such total number of shares of VWR common stock exceeds $1 million.

The Delaware Court of Chancery will thereafter determine the fair value of the shares of VWR common stock held by dissenting stockholders, exclusive of any element of value arising from the accomplishment or expectation of the merger, but together with interest, if any, to be paid on the amount determined to be fair value. Interest will be calculated as of effective date of the merger through the date of payment of the judgment, compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge), unless good cause is shown for the Delaware Court of Chancery to use discretion and calculate the interest rate otherwise. At any time before the entry of judgment in the proceedings, the surviving corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest will accrue thereafter as provided in Section 262 of the DGCL only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the shares of VWR common stock as determined by the Delaware Court of Chancery, and (2) interest theretofore accrued, unless paid at that time.

In determining the fair value, the Delaware Court of Chancery will take into account all relevant factors. In Weinberger v. UOP, Inc., the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the Court of Chancery must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger[.]” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.” Remedy, in cases of unfair dealing, may or may not be a dissenter’s exclusive remedy. The Delaware Court of Chancery may determine the fair value to be more than, less than or equal to the consideration that the dissenting stockholder would otherwise receive under the merger agreement. If no party files a petition for appraisal in a timely manner, then all stockholders will lose the right to an appraisal, and will instead be entitled to receive the merger consideration provided by the merger agreement, without interest.

 

LOGO   78  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Appraisal Rights (continued)

 

 

The Delaware Court of Chancery will determine the costs of the appraisal proceeding and will allocate those costs to the parties as the Delaware Court of Chancery determines to be equitable under the circumstances. Upon application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including reasonable attorneys’ fees and the fees and expenses of experts, to be charged pro rata against the value of all shares of VWR common stock entitled to appraisal.

The fair value of the shares of VWR common stock as determined under Section 262 of the DGCL could be greater than, the same as, or less than the merger consideration. An opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a merger is not an opinion as to, and does not in any manner address, fair value under Section 262 of the DGCL.

Any stockholder who has duly demanded an appraisal in compliance with Section 262 of the DGCL may not, after the effective time, vote the shares of VWR common stock subject to the demand for any purpose or receive any dividends or other distributions on those shares of VWR common stock, except dividends or other distributions payable to holders of record of shares of VWR common stock as of a record date prior to the effective time.

If no petition for appraisal is filed within 120 days after the effective date of the merger, or if a stockholder who has not commenced or joined an appraisal proceeding delivers a written withdrawal of the stockholder’s demand for appraisal within 60 days after the effective date of the merger, then the right of the stockholder to appraisal will cease. Any attempt to withdraw an appraisal demand made more than 60 days after the effective time will require written approval of the surviving corporation. Notwithstanding the foregoing, no appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, and such approval may be conditioned on such terms as the Delaware Court of Chancery deems just; provided, however, that the foregoing provisions of this sentence will not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the merger consideration within 60 days after the effective date of the merger. If the stockholder fails to perfect, successfully withdraws or loses the appraisal right, the stockholder’s shares of VWR common stock will be converted into the right to receive the merger consideration, without interest.

FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF APPRAISAL RIGHTS. IN THAT EVENT, YOU WILL BE ENTITLED TO RECEIVE THE MERGER CONSIDERATION FOR YOUR DISSENTING SHARES OF VWR COMMON STOCK IN ACCORDANCE WITH THE MERGER AGREEMENT. IN VIEW OF THE COMPLEXITY OF THE PROVISIONS OF SECTION 262 OF THE DGCL, IF YOU ARE A VWR STOCKHOLDER AND ARE CONSIDERING EXERCISING YOUR APPRAISAL RIGHTS UNDER THE DGCL, YOU SHOULD CONSULT YOUR OWN LEGAL ADVISOR.

 

  79   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Current Market Price of VWR Common Stock

 

VWR common stock has been listed on NASDAQ under the trading symbol “VWR” since October 2, 2014. The following table sets forth the high and low sales prices of VWR common stock, as reported on NASDAQ, for each of the periods listed.

 

      Common Stock  
      High      Low  

Fiscal Year Ending December 31, 2014

     

Fourth Quarter (beginning on October 2, 2014)

   $ 27.14      $ 20.60  

Fiscal Year Ending December 31, 2015

     

First Quarter

   $ 26.86      $ 23.18  

Second Quarter

   $ 28.83      $ 25.16  

Third Quarter

   $ 27.80      $ 24.43  

Fourth Quarter

   $ 28.58      $ 23.65  

Fiscal Year Ending December 31, 2016

     

First Quarter

   $ 28.20      $ 21.56  

Second Quarter

   $ 30.66      $ 25.17  

Third Quarter

   $ 31.75      $ 26.55  

Fourth Quarter

   $ 29.29      $ 24.53  

Fiscal Year Ending December 31, 2017

     

First Quarter

   $ 28.70      $ 24.42  

Second Quarter (through [    ], 2017)

   $ [    ]      $ [    ]  

The following table sets forth the closing sale prices per share of VWR common stock, as reported on NASDAQ on May 2, 2017, the last trading day prior to the publication of market speculation regarding a potential sale of VWR, and on [    ], the latest practicable date before the printing of this proxy statement:

 

May 2, 2017

   $ 28.52  

[    ]

   $                 [    ]  

If the merger is consummated, each share of VWR common stock (other than (i) shares of VWR common stock owned by the Company (excluding any shares of VWR common stock owned by any subsidiary of the Company, which will remain outstanding), Avantor or Merger Sub and (ii) shares of VWR common stock as to which appraisal rights have been properly demanded and perfected in accordance with Section 262 of the DGCL) will be converted into the right to receive $33.25 in cash and without interest and subject to any applicable withholding taxes, and VWR common stock will be removed from quotation on NASDAQ and there will be no further public market for shares of VWR common stock.

Under the terms of the merger agreement, from the date of the merger agreement until the earlier of the effective time or the termination of the merger agreement, the Company may not declare or pay dividends on shares of VWR common stock without Avantor’s written consent.

 

LOGO   80  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information known to the Company regarding the beneficial ownership of shares of VWR common stock as of May 24, 2017, for:

 

  each of the Company’s directors;
  each of the Company’s named executive officers;
  each person known by the Company to beneficially own 5% or more of its outstanding common stock; and
  all of the Company’s directors and executive officers as a group.

The following table lists the number of shares of VWR common stock and percentage of shares of VWR common stock beneficially owned based on 131,798,400 shares of VWR common stock outstanding as of May 24, 2017. Beneficial ownership is determined in accordance with the rules of the SEC, and generally includes voting power and/or investment power with respect to the securities held. Shares of VWR common stock subject to options currently exercisable or exercisable within 60 days of May 24, 2017 are deemed outstanding and beneficially owned by the person holding such options for purposes of computing the number of shares of VWR common stock and percentage beneficially owned by such person, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person. Except as indicated in the footnotes to this table, and subject to applicable community property laws, the persons or entities named have sole voting and investment power with respect to all shares of VWR common stock shown as beneficially owned by them. Except as otherwise set forth below, the street address of each beneficial owner is c/o VWR Corporation, Radnor Corporate Center, Building One, Suite 200, 100 Matsonford Road, Radnor, PA 19087.

 

  Name of Beneficial Owner    Shares Beneficially Owned  
   Number of Shares
of VWR common
stock
     Percent  of
Class
(%)
(7)
 

  5% Stockholders:

     

  Varietal Distribution Holdings, LLC (1)(3)

     45,750,000        34.7  

  Generation Investment Management (2)

     6,818,375        5.2  

  Directors and Executive Officers:

     

  Manuel Brocke-Benz (3)(4)(5)

     445,612        *  

  Gregory L. Cowan (3)(5)

     135,990        *  

  Mark T. McLoughlin (3)(5)

     102,391        *  

  Dr. Nils Clausnitzer (5)

     7,006        *  

  George Van Kula (3)(5)

     101,250        *  

  Harry M. Jansen Kraemer, Jr. (3)(6)

     22,091        *  

  Nicholas W. Alexos (1)(6)

     45,772,091        34.7  

  Robert L. Barchi (3)(6)

     22,091        *  

  Edward A. Blechschmidt (3)(6)

     22,091        *  

  Robert P. DeCresce (3)(6)

     22,091        *  

  Pamela Forbes Lieberman (3)(6)

     22,091        *  

  Timothy J. Sullivan (1)(6)

     45,772,091        34.7  

  Robert J. Zollars (3)(6)

     22,091        *  

  All directors and executive officers as a group (16 persons)

     46,877,683        35.6  
* Represents beneficial ownership of less than 1% of the shares of VWR common stock.
(1) Based on information as of December 31, 2016 set forth in a Schedule 13G/A dated February 10, 2017. Voting and dispositive power with respect to the common stock held by Varietal is exercised by its Board of Directors, which is comprised of Messrs. Alexos and Sullivan. Madison Dearborn Capital Partners V-A, L.P. (“ MDP V-A ”), Madison Dearborn Capital Partners V-C, L.P. (“ MDP V-C ”), Madison Dearborn Capital Partners V Executive-A, L.P. (“ MDP Executive ”), MDCP Co-Investors (Varietal), L.P. (“ Varietal-1 ”) and MDCP Co-Investors (Varietal-2), L.P. (“ Varietal-2 ” and together with MDP V-A, MDP V-C, MDP Executive and Varietal-1, the MDP Funds ”) are the controlling equityholders of Varietal. Madison Dearborn Partners V-A&C, L.P. (“ MDP A&C ”) is the general partner of each of the MDP Funds. Messrs. Paul J. Finnegan and Samuel M. Mencoff are the sole members of a limited partner committee of MDP A&C that have the power, acting by unanimous vote, to direct the decisions of MDP A&C regarding the vote or disposition of the securities directly held by Varietal Holdings. MDP is the general partner of MDP A&C and has the ability to direct the investment decisions of MDP A&C, including the power to direct the decisions of MDP A&C regarding the vote or disposition of securities directly held by Varietal. Messrs. Alexos, Sullivan, Finnegan and Mencoff each hereby disclaims any beneficial ownership of any shares of VWR common stock directly held by the MDP Funds. The address for MDP, MDP A&C, the MDP Funds and Messrs. Alexos, Sullivan, Finnegan and Mencoff is c/o Madison Dearborn Partners, LLC, Three First National Plaza, Suite 4600, 70 West Madison Street, Chicago, Illinois 60602. Varietal is party to a Voting and Support Agreement with Avantor and

 

  81   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Security Ownership of Certain Beneficial Owners and Management (continued)

 

 

  Merger Sub whereby it has agreed to vote its shares of VWR common stock in favor of the merger and the approval of the Transactions. See “The Special Meeting—Voting and Support Agreement.”
(2) Based on information as of December 31, 2016 set forth in a Schedule 13G/A dated February 14, 2017. Generation Investment Management LLP, an investment adviser, reported that it had sole power to vote 4,710,585 shares of VWR common stock, shared power to vote 203,794 shares of VWR common stock and sole power to dispose of 6,818,375 shares of VWR common stock. The address for Generation Investment Management, LLP is 20 Air Street, 7 th  Floor, London W1B 5AN United Kingdom.
(3) Messrs. Brocke-Benz, Cowan, McLoughlin, Van Kula, Kraemer, Barchi, Blechschmidt, DeCresce, and Zollars and Ms. Forbes Lieberman are investors in Varietal. None of the foregoing persons has direct or indirect voting or dispositive power with respect to the shares of VWR common stock held of record by Varietal.
(4) Includes 1,000 shares of VWR common stock held by Mr. Brocke-Benz’s son and daughter which are deemed to be beneficially owned by Mr. Brocke-Benz.
(5) Shares of VWR common stock and the percent of class listed as being beneficially owned by the Company’s named executive officers include outstanding options to purchase shares of VWR common stock, which are exercisable within 60 days of May 24, 2017 as follows: Mr. Brocke-Benz—433,510; Mr. Cowan—135,990; Mr. McLoughlin—102,391; Dr. Clausnitzer—7,006; and Mr. Van Kula—98,420.
(6) Shares of VWR common stock and the percent of class listed as being beneficially owned by the Company’s non-management directors include outstanding options to purchase shares of VWR common stock, which are exercisable within 60 days of May 24, 2017 as follows: 22,091 for each of Messrs. Alexos, Barchi, DeCresce, Kraemer, Sullivan and Zollars and Ms. Forbes Lieberman and 17,091 for Mr. Blechschmidt.
(7) The percentages shown are based on 131,798,400 shares of VWR common stock issued and outstanding as of May 24, 2017.

 

LOGO   82  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Future Stockholder Proposals

 

If the merger is completed, VWR will have no public stockholders and there will be no public participation in any future meetings of stockholders of VWR. However, if the merger is not completed, stockholders will continue to be entitled to attend and participate in stockholders meetings.

The Company will hold an annual meeting in 2018 only if the merger has not already been completed.

In order to be considered for inclusion in the Company’s proxy statement for its 2018 annual meeting, stockholder proposals must comply with Rule 14a-8(e) of the Exchange Act. Stockholder proposals submitted for consideration in the 2018 Proxy Statement must be submitted in writing to the Company’s principal executive offices no later than December 1, 2017.

In addition, the Company’s amended and restated bylaws include advance notice provisions relating to stockholder nominations for directors or other business not submitted for inclusion in the Company’s proxy statement. The advance notice provisions provide that, among other things, stockholders provide the Company with timely written notice regarding such nominations or other business and otherwise satisfy the requirements set forth in the Company’s amended and restated bylaws. To be timely, a stockholder who intends to present nominations for directors or a proposal at next year’s annual meeting other than pursuant to Rule 14a-8 must provide written notice of the nominations or the other business they wish to propose to the Company at the Company’s principal executive offices, and must be received no earlier than January 2, 2018, and no later than February 1, 2018. For such proposals that are not timely filed, the Board retains discretion whether to present such proposals at the 2018 annual meeting, and the Company retains discretion to vote proxies it receives in connection therewith.

Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. Such notice must also comply with all other requirements of the Company’s amended and restated bylaws.

You may contact the Company’s Corporate Secretary at its principal executive offices for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

Proponents must submit notices of proposals and nominations in writing to the following address:

VWR Corporation

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, PA 19087

(610) 386-1700

Attn: Corporate Secretary

The Corporate Secretary will forward the notices of proposals and nominations to the Nominating and Corporate Governance Committee for consideration.

 

  83   LOGO


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Where You Can Find More Information

 

Statements contained in this proxy statement, or in any document incorporated by reference herein, regarding the contents of any contract or other document, are not necessarily complete and each such statement is qualified in its entirety by reference to that contract or other document filed as an exhibit with the SEC. The SEC allows the Company to “incorporate by reference” information into this proxy statement, which means that it can disclose important information to you by referring you to other documents filed separately with the SEC. The information incorporated by reference is deemed to be part of this proxy statement, except for any information superseded by information in this proxy statement or incorporated by reference subsequent to the date of this proxy statement. This proxy statement incorporates by reference the documents set forth below that the Company has previously filed with the SEC. These documents contain important information about the Company and its financial condition and are incorporated by reference into this proxy statement.

The following of the Company’s filings with the SEC are incorporated by reference (provided that we are not incorporating by reference any information furnished to, but not filed with, the SEC):

 

  annual report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 24, 2017;
  definitive proxy statement on Schedule 14A filed with the SEC on March 31, 2017;
  quarterly report on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 5, 2017; and
  current reports on Form 8-K filed with the SEC on May 2, 2017 and May 5, 2017.

The Company also incorporates by reference into this proxy statement additional documents that it may file with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this proxy statement and the earlier of the date of the special meeting or the termination of the merger agreement (provided that we are not incorporating by reference any information furnished to, but not filed with, the SEC). These documents include periodic reports, such as Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as well as Current Reports on Form 8-K and proxy soliciting materials (provided that we are not incorporating by reference any information furnished to, but not filed with, the SEC).

You may read and copy any reports, statements or other information that the Company files with the SEC at the SEC’s public reference room at the following location: 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also obtain copies of those documents at prescribed rates by writing to the Public Reference Section of the SEC at that address. Please call the SEC at (800) 732-0330 for further information on the public reference room. These SEC filings are also available to the public from commercial document retrieval services and at www.sec.gov. In addition, stockholders may obtain free copies of the documents filed with the SEC by the Company in the “Financial Information” section of the Company’s investor relations website at investors.vwr.com. The information contained on, or accessible through, the Company’s website is not incorporated in, and does not form a part of, the proxy statement or any other report or document filed by or furnished to the SEC by the Company.

You may obtain any of the documents the Company files with the SEC, without charge, by requesting them in writing from the Company at the below address. Additionally, if you have any questions about this proxy statement, the special meeting or the merger or need assistance with voting procedures, you should contact the Company at:

VWR Corporation

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, PA 19087

(610) 386-1700

Attn: Corporate Secretary

If you would like to request documents from the Company, please do so by [                    ], 2017 in order to receive them before the special meeting. If you request any documents from the Company, the Company will mail them to you by first class mail, or another equally prompt method, within one business day after receiving your request.

The directors, executive officers and certain other members of management and employees of the Company may be deemed “participants” in the solicitation of proxies from VWR stockholders in favor of the proposed merger. You can find information

 

LOGO   84  


Table of Contents
2017 SPECIAL MEETING PROXY STATEMENT   

 

Where You Can Find More Information (continued)

 

 

about the Company’s executive officers and directors in its annual report on Form 10-K for the fiscal year ended December 31, 2016 and in its definitive proxy statement filed with the SEC on Schedule 14A on March 31, 2017.

If you have any questions about this proxy statement, the special meeting or the merger or need assistance with voting procedures, you should contact the Company’s proxy solicitor at:

D.F. King & Co., Inc.

48 Wall Street

New York, NY 10005

1 (212) 269-5550 (call collect)

1 (877) 283-0325 (toll free)

 

  85   LOGO


Table of Contents

Annex A

 

 

 

AGREEMENT AND PLAN OF MERGER

dated as of May 4, 2017,

by and among

AVANTOR, INC.,

VAIL ACQUISITION CORP

and

VWR CORPORATION

 

 

 


Table of Contents

Table of Contents

 

         Page  

ARTICLE I The Merger

     A-1  

SECTION 1.01

 

The Merger

     A-1  

SECTION 1.02

 

Merger Closing

     A-1  

SECTION 1.03

 

Effective Time

     A-1  

SECTION 1.04

 

Effects of Merger

     A-1  

SECTION 1.05

 

Certificate of Incorporation and By-laws

     A-1  

SECTION 1.06

 

Directors and Officers

     A-2  

SECTION 1.07

 

Effect on Capital Stock

     A-2  

SECTION 1.08

 

Payment of Merger Consideration

     A-2  

SECTION 1.09

 

Equity Awards

     A-4  

SECTION 1.10

 

Tax Receivables Agreement

     A-4  

ARTICLE II Representations and Warranties of the Company

     A-4  

SECTION 2.01

 

Organization, Standing and Power

     A-5  

SECTION 2.02

 

Capital Structure

     A-5  

SECTION 2.03

 

Company Subsidiaries; Equity Interests

     A-6  

SECTION 2.04

 

Authority; Execution and Delivery; Enforceability

     A-6  

SECTION 2.05

 

No Conflicts; Consents

     A-7  

SECTION 2.06

 

SEC Documents; Undisclosed Liabilities

     A-7  

SECTION 2.07

 

Information Supplied

     A-8  

SECTION 2.08

 

Absence of Certain Changes or Events

     A-9  

SECTION 2.09

  Taxes      A-9  

SECTION 2.10

 

Labor Relations

     A-10  

SECTION 2.11

 

Employee Benefits

     A-10  

SECTION 2.12

 

Property

     A-11  

SECTION 2.13

 

Contracts

     A-12  

SECTION 2.14

 

Litigation

     A-13  

SECTION 2.15

 

Compliance with Laws

     A-13  

SECTION 2.16

 

Environmental Matters

     A-13  

SECTION 2.17

 

Intellectual Property

     A-14  

SECTION 2.18

 

Insurance

     A-15  

SECTION 2.19

 

Brokers and Other Advisors

     A-15  

SECTION 2.20

 

No Rights Agreement; Anti-Takeover Provisions

     A-15  

SECTION 2.21

 

Opinion of Financial Advisor

     A-15  

SECTION 2.22

 

Product Liability

     A-15  

ARTICLE III Representations and Warranties of Parent and Merger Sub

     A-15  

SECTION 3.01

 

Organization, Standing and Power

     A-15  

SECTION 3.02

 

Merger Sub

     A-16  

SECTION 3.03

 

Authority; Execution and Delivery; Enforceability

     A-16  

SECTION 3.04

 

No Conflicts; Consents

     A-16  

SECTION 3.05

  Information Supplied      A-16  

SECTION 3.06

  Brokers      A-16  

SECTION 3.07

  Litigation      A-17  

SECTION 3.08

  Ownership of Company Common Stock      A-17  

SECTION 3.09

  Certain Business Relationships      A-17  

SECTION 3.10

  Financing      A-17  

SECTION 3.11

  Solvency      A-18  

SECTION 3.12

  Independent Investigation      A-18  

SECTION 3.13

  No Foreign Person      A-19  

ARTICLE IV Covenants Relating to Conduct of Business

     A-19  

SECTION 4.01

  Conduct of Business of the Company      A-19  

SECTION 4.02

  No Frustration of Conditions      A-21  

SECTION 4.03

  Go-Shop; No Solicitation      A-21  


Table of Contents
         Page  

ARTICLE V Additional Agreements

     A-24  

SECTION 5.01

  Access to Information; Confidentiality      A-24  

SECTION 5.02

  Reasonable Best Efforts; Notification      A-25  

SECTION 5.03

  Employee Matters      A-27  

SECTION 5.04

  Indemnification      A-28  

SECTION 5.05

  Fees and Expenses      A-29  

SECTION 5.06

  Public Announcements      A-30  

SECTION 5.07

  Transfer Taxes      A-31  

SECTION 5.08

  Withholding Rights      A-31  

SECTION 5.09

  Stockholder Litigation      A-31  

SECTION 5.10

  Works Councils      A-31  

SECTION 5.11

  Rule 16b-3 Matters      A-31  

SECTION 5.12

  Merger Sub and Surviving Corporation Compliance      A-32  

SECTION 5.13

  Stock Exchange Delisting      A-32  

SECTION 5.14

  No Control of Other Party’s Business      A-32  

SECTION 5.15

  Parent Financing      A-32  

SECTION 5.16

  Treatment of Company Indebtedness      A-36  

SECTION 5.17

  Proxy Statement      A-36  

SECTION 5.18

  Stockholders Meeting      A-37  

ARTICLE VI Conditions Precedent to the Merger

     A-37  

SECTION 6.01

  Conditions to Each Party’s Obligation      A-37  

SECTION 6.02

  Conditions to the Obligations of Parent and Merger Sub      A-38  

SECTION 6.03

  Conditions to the Obligations of the Company      A-38  

ARTICLE VII Termination, Amendment and Waiver

     A-38  

SECTION 7.01

  Termination      A-38  

SECTION 7.02

  Effect of Termination      A-39  

SECTION 7.03

  Amendment; Extension; Waiver      A-39  

SECTION 7.04

  Procedure for Termination, Amendment, Extension or Waiver      A-40  

ARTICLE VIII General Provisions

     A-40  

SECTION 8.01

  No Survival of Representations and Warranties      A-40  

SECTION 8.02

  Notices      A-40  

SECTION 8.03

  Definitions      A-41  

SECTION 8.04

  Interpretation      A-44  

SECTION 8.05

  Severability      A-45  

SECTION 8.06

  Counterparts      A-45  

SECTION 8.07

  Entire Agreement; Third-Party Beneficiaries; No Other Representations or Warranties      A-45  

SECTION 8.08

  Governing Law      A-46  

SECTION 8.09

  Assignment      A-46  

SECTION 8.10

  Specific Enforcement; Jurisdiction      A-46  

SECTION 8.11

  Waiver of Jury Trial      A-47  

SECTION 8.12

  Remedies      A-47  

SECTION 8.13

  No Recourse      A-47  

SECTION 8.14

  Cooperation      A-47  

 

EXHIBITS

Exhibit A

  -  

Certificate of Incorporation of the Surviving Corporation

Exhibit B

  -  

Index of Defined Terms

 

LOGO   A-ii