UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 7, 2011

 

 

Express Scripts, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   0-20199   43-1420563

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

One Express Way,

St. Louis, MO

  63121
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code 314-996-0900

Not Applicable

Former name or former address, if changed since last report

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 Entry Into a Material Definitive Agreement

On November 7, 2011, Express Scripts, Inc. (“Express Scripts”) entered into Amendment No. 1 (the “Amendment”), attached hereto as Exhibit 2.1, to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of July 20, 2011, by and among Express Scripts, a Delaware corporation, Medco Health Solutions, Inc., a Delaware corporation (“Medco”), Aristotle Holding, Inc., a Delaware corporation and wholly owned subsidiary of Express Scripts (“Parent”), Aristotle Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent, and Plato Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent.

The Amendment reduces the termination fee payable by either party from $950 million to $650 million in most instances. The termination fee will remain at $950 million in the event that the Merger Agreement is terminated following a change in recommendation by either party in instances where there was no takeover proposal outstanding in respect of the company making the change of recommendation. The Amendment also provides for a reduction in the number of times each company may exercise its contractual right to match a competing takeover proposal made for the other company. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 2.1 hereto, and is incorporated herein by reference.

Item 8.01

On November 7, 2011, Express Scripts and Medco Health Solutions, Inc. entered into a memorandum of understanding with plaintiffs to settle the shareholder litigation pending in the United District Court for the District of New Jersey and the Delaware Court of Chancery regarding their proposed merger.

Express Scripts and Medco have also agreed to hold the special meetings of their respective stockholders to vote on the proposed mergers to such date or dates as determined by Medco and Express Scripts, but in no event prior to December 21, 2011.

The memorandum of understanding, among other agreements among the parties, provides that the parties will enter into a Stipulation of Settlement, which will be subject to required court approvals.

Item 9.01 Financial Statements and Exhibits.

 

Exhibit No.

  

Description

2.1    Amendment No. 1 to Agreement and Plan of Merger, dated as of November 7, 2011, by and among Express Scripts, Inc., Medco Health Solutions, Inc., Aristotle Holding, Inc., Aristotle Merger Sub, Inc., and Plato Merger Sub, Inc.

* * *

 

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FORWARD LOOKING STATEMENTS

Cautionary Note Regarding Forward-Looking Statements

This material may include forward-looking statements, both with respect to us and our industry, that reflect our current views with respect to future events and financial performance. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” “may,” “would” and similar statements of a future or forward-looking nature may be used to identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties, many of which are beyond our control. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements. We believe that these factors include, but are not limited to, the following:

STANDARD OPERATING FACTORS

 

  •  

Our ability to remain profitable in a very competitive marketplace is dependent upon our ability to attract and retain clients while maintaining our margins, to differentiate our products and services from others in the marketplace, and to develop and cross sell new products and services to our existing clients;

 

  •  

Our failure to anticipate and appropriately adapt to changes in the rapidly changing health care industry;

 

  •  

Changes in applicable laws or regulations, or their interpretation or enforcement, or the enactment of new laws or regulations, which apply to our business practices (past, present or future) or require us to spend significant resources in order to comply;

 

  •  

Changes to the healthcare industry designed to manage healthcare costs or alter healthcare financing practices;

 

  •  

Changes relating to our participation in Medicare Part D, the loss of Medicare Part D eligible members, or our failure to otherwise execute on our strategies related to Medicare Part D;

 

  •  

A failure in the security or stability of our technology infrastructure, or the infrastructure of one or more of our key vendors, or a significant failure or disruption in service within our operations or the operations of such vendors;

 

  •  

Our failure to effectively execute on strategic transactions, or to integrate or achieve anticipated benefits from any acquired businesses;

 

  •  

The termination, or an unfavorable modification, of our relationship with one or more key pharmacy providers, or significant changes within the pharmacy provider marketplace;

 

  •  

The termination, or an unfavorable modification, of our relationship with one or more key pharmaceutical manufacturers, or the significant reduction in payments made or discounts provided by pharmaceutical manufacturers;

 

  •  

Changes in industry pricing benchmarks;

 

  •  

Results in pending and future litigation or other proceedings which would subject us to significant monetary damages or penalties and/or require us to change our business practices, or the costs incurred in connection with such proceedings;

 

  •  

Our failure to execute on, or other issues arising under, certain key client contracts;

 

  •  

The impact of our debt service obligations on the availability of funds for other business purposes, and the terms and our required compliance with covenants relating to our indebtedness; our failure to attract and retain talented employees, or to manage succession and retention for our Chief Executive Officer or other key executives;

 

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TRANSACTION-RELATED FACTORS

 

  •  

Uncertainty as to whether Express Scripts, Inc. (Express Scripts) will be able to consummate the mergers with Medco Health Solutions, Inc. (Medco) on the terms set forth in the merger agreement;

 

  •  

The ability to obtain governmental approvals of the mergers;

 

  •  

Uncertainty as to the market value of Express Scripts merger consideration to be paid and the stock component of the Medco merger consideration;

 

  •  

Failure to realize the anticipated benefits of the mergers, including as a result of a delay in completing the mergers or a delay or difficulty in integrating the businesses of Express Scripts and Medco;

 

  •  

Uncertainty as to the long-term value of Express Scripts Holding Company (currently known as Aristotle Holding, Inc.) common shares;

 

  •  

Limitation on the ability of Express Scripts and Express Scripts Holding Company to incur new debt in connection with the transaction;

 

  •  

The expected amount and timing of cost savings and operating synergies; and

 

  •  

Failure to receive the approval of the stockholders of either Express Scripts or Medco for the mergers.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the risk factors included in Express Scripts’ most recent reports on Form 10-K and Form 10-Q and the risk factors included in Medco’s most recent reports on Form 10-K and Form 10-Q and other documents of Express Scripts, Express Scripts Holding Company and Medco on file with the Securities and Exchange Commission (“SEC”). Any forward-looking statements made in this material are qualified in their entirety by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. Except to the extent required by applicable law, we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

This communication is not a solicitation of a proxy from any stockholder of Express Scripts, Medco or Express Scripts Holding Company. In connection with the Agreement and Plan of Merger among Medco, Express Scripts, Express Scripts Holding Company, Plato Merger Sub Inc. and Aristotle Merger Sub, Inc. (the “Merger”), Medco, Express Scripts and Express Scripts Holding Company, intend to file relevant materials with the SEC, including a Registration Statement on Form S-4 filed by Express Scripts Holding Company that will contain a joint proxy statement/prospectus. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THESE MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MEDCO, EXPRESS SCRIPTS, EXPRESS SCRIPTS HOLDING COMPANY AND THE MERGER. The Form S-4, including the joint proxy statement/prospectus, and other relevant materials (when they become available), and any other documents filed by Express Scripts, Express Scripts Holding Company or Medco with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by directing a written request to:

Mackenzie Partners, Inc.

105 Madison Avenue

New York, New York 10016

 

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This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

PARTICIPANTS IN THE SOLICITATION

Express Scripts, Express Scripts Holding Company and Medco and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the security holders of either Express Scripts and Medco in connection with the Merger. Information about Express Scripts’ directors and executive officers is available in Express Scripts’ definitive proxy statement, dated March 21, 2011, for its 2011 annual general meeting of stockholders. Information about Medco’s directors and executive officers is available in Medco’s definitive proxy statement, dated April 8, 2011, for its 2011 annual general meeting of stockholders. Other information regarding the participants and description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Form S-4 and the joint proxy statement/prospectus regarding the Merger that Express Scripts Holding Company will file with the SEC when it becomes available.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

EXPRESS SCRIPTS, INC.

(Registrant)

By:  

/s/ Keith J. Ebling

 

Name: Keith J. Ebling

Title: Executive Vice President and General Counsel

Dated: November 7, 2011

 

 

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EXHIBIT LIST

 

Exhibit No.

  

Description

2.1    Amendment No. 1 to Agreement and Plan of Merger, dated as of November 7, 2011, by and among Express Scripts, Inc., Medco Health Solutions, Inc., Aristotle Holding, Inc., Aristotle Merger Sub, Inc., and Plato Merger Sub, Inc.
  

 

 

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Exhibit 2.1

EXECUTION VERSION

AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER

AMENDMENT NO. 1, dated November 7, 2011 (“Amendment No. 1”) to that certain Agreement and Plan of Merger (the “Merger Agreement”) dated as of July 20, 2011 by and among Express Scripts, Inc., a Delaware corporation (“Express Scripts”), Medco Health Solutions, Inc., a Delaware corporation (“Medco”), Aristotle Holding, Inc., a Delaware corporation and wholly-owned subsidiary of Express Scripts (“New Express Scripts”), Aristotle Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of New Express Scripts (“Aristotle Merger Sub”) and Plato Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of New Express Scripts (“Plato Merger Sub”). Capitalized terms used by not defined herein shall have the meaning set forth in the Merger Agreement.

WHEREAS, the parties have entered in to a Memorandum of Understanding (“MOU”) as of November 7, 2011, to document the agreement in principle for the settlement with plaintiffs in various stockholder actions of such actions brought in connection with the Merger Agreement on the terms and subject to the conditions set forth therein; and

WHEREAS, the parties desire to amend certain of the provisions of the Merger Agreement;

WHEREAS, the Boards of Directors of each of Express Scripts, Medco, New Express Scripts, Aristotle Merger Sub and Plato Merger Sub have each determined that it is advisable and in the best interests of their respective companies and stockholders to enter into this Amendment No. 1 and authorized their respective companies to enter into this Amendment No. 1; and

WHEREAS, in accordance with Section 8.1 of the Merger Agreement, the Merger Agreement may only be amended by written agreement of (a) Express Scripts, (b) Medco, (c) New Express Scripts, (d) Aristotle Merger Sub and (e) Plato Merger Sub.

NOW THEREFORE, in consideration of the premises of this Amendment No. 1 and the agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereby agree as follows:

 

1. Amendment to Section 5.4(b) . Section 5.4(b) of the Merger Agreement is hereby amended and restated by adding the following proviso at the end of the last sentence of Section 5.4(b):

; provided , further , that each of Plato and Aristotle, as the case may be, will be entitled to the benefit of clauses (iii) and (iv) above, and any extension which may apply pursuant to the immediately preceding proviso, no more than one time with respect to a Takeover Proposal and any material amendments or modifications thereof.

 

2. Amendment to Section 8.15 . Section 8.15 of the Merger Agreement is hereby amended and restated by deleting the current definition of “Termination Fee” and replacing it in its entirety with the following:

“ Termination Fee ” means an amount equal to $650,000,000; provided , that, in the event that (A) a Termination Fee is payable pursuant to Section 7.3(f) and (B) at the time of the event giving rise to Aristotle’s or Plato’s right to terminate the Agreement pursuant to Section 7.1(d)(i) or Section 7.1(c)(i), as the case may be, and be paid such a Termination Fee, as the case may be, there was no Takeover Proposal outstanding with respect to the party obligated to pay such Termination Fee, the Termination Fee shall mean an amount equal to $950,000,000.

 

1

3. No Other Changes . Except as expressly provided herein, the Merger Agreement is not amended, modified or otherwise affected by this Amendment No. 1, and the Merger Agreement and the rights and obligations of the parties thereunder are hereby ratified and confirmed in all respects.

 

4. Effective Time . This Amendment No. 1 shall be effective as of the date set forth in the preamble to this Amendment No. 1.

 

5. Governing Law . This Amendment No. 1 will be governed by the laws of the State of Delaware, without regard to the conflicts of law principles thereof.

 

6. Counterparts. This Amendment No. 1 may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties (including by facsimile or via portable document format (.pdf)), it being understood that all parties need not sign the same counterpart.

[SIGNATURE PAGE FOLLOWS]

 

2

IN WITNESS WHEREOF, Express Scripts, Medco, New Express Scripts, Aristotle Merger Sub and Plato Merger Sub have duly executed this Amendment No. 1, all as of the date first written above.

Very truly yours,
MEDCO HEALTH SOLUTIONS, INC.
By:   /s/ Thomas M. Moriarty        
Name: Thomas M. Moriarty

Title: General Counsel, Secretary and President, Global Pharmaceutical Strategies

 

EXPRESS SCRIPTS, INC.
By:   /s/ Keith Ebling        
Name: Keith Ebling
Title: Executive Vice President and General Counsel

 

ARISTOTLE HOLDING, INC.
By:   /s/ Keith Ebling        
Name: Keith Ebling
Title: Executive Vice President and General Counsel

 

ARISTOTLE MERGER SUB, INC.
By:   /s/ Keith Ebling        
Name: Keith Ebling
Title: President

 

PLATO MERGER SUB, INC.
By:   /s/ Keith Ebling        
Name: Keith Ebling
Title: President

[Signature Page to Amendment No. 1]