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 20, 2018 (November 14, 2018)
B. Riley Financial, Inc.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 001-37503 | 27-0223495 | ||
|
(State
or Other Jurisdiction
of Incorporation) |
(Commission
File
Number) |
(IRS
Employer
Identification No.) |
21255
Burbank Boulevard, Suite 400
Woodland Hills, California 91367
(Address of Principal Executive Offices) (Zip Code)
Telephone:
(818) 884-3737
(Registrant’s telephone number, including area
code)
N/A
(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 ( see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.01. Completion of Acquisition or Disposition of Assets.
On November 14, 2018, pursuant to the Agreement and Plan of Merger, dated as of November 9, 2017, as amended by Amendment No. 1 thereto, dated as of May 8, 2018 (together, the “ Merger Agreement ”), by and among B. Riley Financial, Inc., a Delaware corporation (the “ Company ”), B.R. Acquisition Ltd., an Israeli corporation and an indirect wholly-owned subsidiary of the Company (“ Merger Sub ”), and magicJack VocalTec Ltd., an Israeli corporation (“ magicJack ”), Merger Sub merged with and into magicJack with magicJack continuing as the surviving corporation as an indirect wholly-owned subsidiary of the Company (the “ Merger ”).
On November 9, 2018, the parties entered into a Limited Waiver and Agreement, pursuant to which the parties agreed to waive their rights to enforce the End Date (as defined in the Merger Agreement) until November 16, 2018 and, pursuant to the terms of the Merger Agreement, designated November 14, 2018, or such other date agreed in writing by the parties, as the closing date of the Merger.
Pursuant to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the “ Effective Time ”), each outstanding ordinary share, no par value, of magicJack (“ magicJack Shares ”), other than shares owned by the Company or Merger Sub, or by any wholly-owned subsidiary of the Company, Merger Sub, or magicJack (except to the extent held for the benefit of any third party, including any customer or investment fund) was converted into the right to receive $8.71 in cash without interest (the “ Per Share Merger Consideration ”).
In addition, subject to certain exceptions, at the Effective Time, each outstanding option to acquire magicJack Shares, whether vested or unvested, was, automatically and without any required action on the part of the holder thereof, cancelled and converted into the right to receive an amount in cash, less applicable tax withholdings, equal to the product of (i) the number of magicJack Shares underlying such option and (ii) the excess, if any, of the Per Share Merger Consideration over the exercise price per share of such option; provided, however, that any such option having an exercise price per share equal to or greater than the Per Share Merger Consideration was cancelled in exchange for no consideration. At the Effective Time, each outstanding award of magicJack Shares that was subject to forfeiture or other restrictions (collectively, “ Restricted Shares ”) became vested if and to the extent provided by the terms of such award, and any portion that did not become vested was forfeited. Each vested Restricted Share was, automatically and without any required action on the part of the holder thereof, cancelled and converted into the right to receive an amount in cash less applicable tax withholdings, equal to the product of (a) the Per Share Merger Consideration, multiplied by (b) the number of magicJack Shares underlying such Restricted Share.
The aggregate consideration paid by the Company in the Merger was approximately $143 million in cash, without giving effect to related transaction fees and expenses, which amount was funded with cash on hand.
In connection with the closing of the Merger, on November 9, 2018, pursuant to a Share Purchase Agreement, dated as of November 9, 2018 (the “ Share Purchase Agreement ”), by and between B. Riley Principal Investments LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“ BRPI ”), and YMax Corporation, a Delaware corporation and wholly-owned subsidiary of magicJack (“ YMax ”), BRPI purchased from YMax 5,942,715 magicJack shares (the “ Purchased Shares ”) for aggregate cash consideration in the amount of $33.0 million in an effort to acquire all of the issued shares of magicJack in connection with the Merger.
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on November 9, 2017, which is incorporated by reference as Exhibit 2.1 hereto and is incorporated by reference into this Item 2.01.
Item 8.01 Other Events
On November 14, 2018, the Company and magicJack issued a joint press release announcing the completion of the Merger, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired .
The Company intends to file the financial statements of the business acquired under cover of Form 8-K/A no later than 71 calender days after the date this Report is required to be filed.
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(b) Pro Forma Financial Information .
The Company intends to file pro forma financial information under cover of Form 8-K/A not later than 71 calendar days after the date that this Report is required to be filed.
(d) Exhibits .
| * | Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementally a copy of any of the omitted schedules upon request by the SEC. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 20, 2018 | B. RILEY FINANCIAL, INC. | |
| By: | /s/ Phillip J. Ahn | |
| Name: Phillip J. Ahn | ||
| Title: Chief Financial Officer and Chief Operating Officer | ||
Exhibit 2.2
Amendment No. 1 to
Agreement and Plan of Merger
The parties hereto are entering into this Amendment No. 1, dated as of May 8, 2018 (this “ Amendment ”), to that certain Agreement and Plan of Merger, dated as of November 9, 2017 (the “ Merger Agreement ”) by and among B. Riley Financial, Inc., a Delaware corporation (“ Parent ”), B. R. Acquisition Ltd., an Israeli corporation and a wholly-owned subsidiary of Parent (“ Merger Sub ”), and magicJack VocalTec Ltd., an Israeli corporation (the “ Company ”). Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meanings assigned to such terms in the Merger Agreement.
WHEREAS, in accordance with Section 7.04 of the Merger Agreement, the Parties desire to amend certain provisions of the Merger Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained in this Amendment and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:
| 1. | A new Section 5.17 shall be added as follows: |
Reorganization . As soon as practicable following the Closing, the Company shall sell and transfer to BRPI Acquisition Co LLC, a wholly-owned, indirect U.S. subsidiary of the Parent (“ US Sub ”), and Parent shall cause US Sub to purchase and acquire from the Company, all outstanding capital stock of YMax Corporation, a Delaware corporation and wholly-owned subsidiary of the Company, in exchange for a promissory note or such other consideration as Parent and the Company may agree.
| 2. | Miscellaneous. This Amendment and the Merger Agreement (including the documents and the instruments referred to therein), together, contains the entire understanding of the Parties in respect of their subject matter and supersede all prior agreements and understandings (oral or written) between the Parties with respect to such subject matter, other than the Confidentiality Agreement. Except as specifically amended hereby, the Merger Agreement, as amended hereby, shall remain in full force and effect. The terms and provisions of Section 8.02, Section 8.05, Section 8.07, Section 8.08, Section 8.09, Section 8.10, Section 8.11, Section 8.12 and Section 8.13 of the Merger Agreement are incorporated herein by reference as if set forth herein in their entirety and shall apply mutatis mutandis to this Amendment. |
(Remainder of page intentionally left blank.)
IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed on the date first written above.
| B. RILEY FINANCIAL, INC. | ||
| By: | /s/ Bryant Riley | |
| Name: Bryant Riley | ||
| Title: Chairman and Chief Executive Officer | ||
| B. R. ACQUISITION LTD. | ||
| By: | /s/ Kenneth M. Young | |
| Name: Kenneth M. Young | ||
| Title: Chief Executive Officer | ||
(Signature Page to Amendment No. 1 to Merger Agreement)
| MAGICJACK VOCALTEC LTD. | ||
| By: | /s/ Don Carlos Bell III | |
| Name: Don Carlos Bell III | ||
| Title: Chief Executive Officer | ||
(Signature Page to Amendment No. 1 to Merger Agreement)
Exhibit 2.3
Limited Waiver and Agreement
This LIMITED WAIVER AND AGREEMENT, dated as of November 8, 2018 (this “ Agreement ”), is entered into by and between B. Riley Financial, Inc., a Delaware corporation (“ Parent ”), and magicJack VocalTec Ltd., an Israeli corporation (the “ Company ”). Any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Merger Agreement (as defined below).
WHEREAS, Parent, the Company and B. R. Acquisition Ltd., an Israeli corporation and an indirect wholly-owned subsidiary of Parent (“ Merger Sub ”), have entered into that certain Agreement and Plan of Merger, dated as of November 9, 2017, as amended by Amendment No. 1 thereto, dated as of May 8, 2018 (collectively, the “ Merger Agreement ”); and
WHEREAS, Parent and the Company have determined to enter into this Agreement in connection with the Merger Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Parent and the Company hereby agree as follows:
| 1. | Representations. |
| a. | Parent hereby represents and warrants to the Company that Parent has the requisite corporate power and authority to enter into this Agreement. |
| b. | The Company hereby represents and warrants to Parent that the Company has the requisite corporate power and authority to enter into this Agreement. |
| 2. | Waiver of End Date. Without prejudice to any of its other rights under the Merger Agreement, each of Parent and the Company hereby (i) waives its right to terminate the Merger Agreement pursuant to Section 7.01(b)(i) of the Merger Agreement prior to November 16, 2018 (the “ Extension Date ”), and (ii) agrees that each reference to the “End Date” in the Merger Agreement shall be deemed to refer to the Extension Date. |
| 3. | Closing Date. Notwithstanding Section 2.02 of the Merger Agreement, subject to the satisfaction or (to the extent permitted by Law) waiver by the Party or Parties entitled to benefits thereunder of the conditions set forth in Article 6 of the Merger Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or (to the extent permitted by Law) waiver of those conditions), the Closing shall take place at the offices of Bryan Cave Leighton Paisner LLP, 1290 Avenue of the Americas, New York, New York 10104 at 10:00 a.m., Israeli time, on November 14, 2018 or at such other place, time or date as shall be agreed in writing between Parent and the Company. |
| 4. | General Provisions. |
| a. | Except as expressly provided herein, nothing in this Agreement shall be deemed to constitute a waiver of compliance by any Party with respect to any other term, provision or condition of the Merger Agreement, or shall be deemed or construed to amend, supplement or modify the Merger Agreement, which shall remain in full force and effect. |
| b. | This Agreement and the Merger Agreement (including the documents and the instruments referred to therein) contain the entire understanding of Parent and the Company in respect of their subject matter and supersede all prior agreements and understandings (oral or written) between Parent and the Company with respect to such subject matter, other than the Confidentiality Agreement. |
| c. | The terms and provisions of Section 8.02, Section 8.05, Section 8.07, Section 8.08, Section 8.09, Section 8.10, Section 8.11, Section 8.12 and Section 8.13 of the Merger Agreement are incorporated herein by reference as if set forth herein in their entirety and shall apply mutatis mutandis to this Agreement. |
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed on the date first written above.
| B. RILEY FINANCIAL, INC. | |||
| By: | /s/ Phillip J. Ahn | ||
| Name: Phillip J. Ahn | |||
| Title: Chief Financial Officer and Chief Operating Officer | |||
(Signature Page to Limited Waiver and Agreement)
| MAGICJACK VOCALTEC LTD. | |||
| By: | /s/ Don Carlos Bell III | ||
| Name: Don Carlos Bell III | |||
| Title: Chief Executive Officer | |||
(Signature Page to Limited Waiver and Agreement)
Exhibit 99.1
B. Riley Financial Completes Acquisition of magicJack VocalTec
LOS ANGELES, CA and WEST PALM BEACH, Fla. And NETANYA, Israel – November 14, 2018 – B. Riley Financial, Inc. (“B. Riley”)(NASDAQ: RILY), a diversified provider of financial and advisory services, and magicJack VocalTec Ltd. (“magicJack”)(NASDAQ: CALL), a leading Voice over IP (VoIP) cloud-based communications company, today announced that B. Riley has completed its previously announced acquisition of magicJack. As of November 14, 2018, shares of magicJack halted trading on NASDAQ.
For more information, visit the investor relations website for B. Riley Financial at ir.brileyfin.com and for magicJack at www.vocaltec.com.
About magicJack VocalTec Ltd.
magicJack VocalTec Ltd., is a cloud-based Voice over IP technology and services communications provider.
About B. Riley Financial, Inc. (NASDAQ: RILY)
B. Riley Financial provides collaborative financial services and solutions tailored to fit the capital raising and financial advisory needs of public and private companies and high net worth individuals. The company operates through several wholly-owned subsidiaries, including B. Riley FBR, a full-service investment bank and institutional brokerage; Great American Group, a leading provider of asset disposition, appraisal, corporate advisory and valuation services; GlassRatner, a specialty financial advisory services and consulting firm; B. Riley Wealth Management, B. Riley Asset Management and B. Riley Alternatives, which offer investment management to institutional and high net worth investors; Great American Capital Partners, which originates and underwrites senior secured loans for asset-rich companies; and B. Riley Principal Investments, which invests in or acquires companies and assets with attractive return profiles.
| Investor Contact | Media Contact |
| Investor Relations | Jo Anne McCusker |
| ir@brileyfin.com | jmccusker@brileyfin.com |
| (310) 966-1444 | (646) 885-5425 |