Item 1A. Risk Factors
Item 1A. Risk Factors
In addition to the risk factors disclosed in the section entitled “Risk Factors” of our Form 10-K, we have identified the following risks related to the Chubb acquisition:
Our ability to complete the acquisition of Chubb is subject to various closing conditions, including the receipt of consents and approvals from governmental authorities, which may impose conditions that could adversely affect us or cause the acquisition not to be completed.
On July 26, 2021, we entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Carrier Global Corporation (“Carrier”), Carrier Investments UK Limited and Chubb Limited (“Chubb”). Pursuant to the Purchase Agreement, on the terms and subject to the conditions therein, we agreed to acquire the Chubb fire and security business through the acquisition of Chubb (the “Acquisition”). The Acquisition is subject to a number of conditions to closing as specified in the Purchase Agreement. These closing conditions include, among others, the receipt of certain regulatory approvals pursuant to any Competition and Foreign Investment Laws (as defined in the Purchase Agreement) . No assurance can be given that the required governmental and regulatory consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, if all required consents and approvals are obtained and the required conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the Acquisition could cause us not to realize, or to be delayed in realizing, some or all of the benefits that we and Chubb expect to achieve if the Acquisition is successfully completed within its expected time frame.
Additionally, either we or Carrier may terminate the Purchase Agreement under certain circumstances, including, among other reasons, if the Acquisition is not completed by July 26, 2022 (which date may be extended under certain circumstances).
We can provide no assurance that the various closing conditions will be satisfied and that the necessary approvals will be obtained, or that any required conditions will not materially adversely affect us following the Acquisition. In addition, we can provide no assurance that these conditions will not result in the abandonment or delay of the Acquisition. The occurrence of any of these events individually or in combination could have a material adverse effect on our results of operations and the trading price of our common stock.
The termination of the Purchase Agreement could negatively impact our business.
If the Acquisition is not completed for any reason, our ongoing business may be adversely affected and, without realizing any of the expected benefits of having completed the Acquisition, we would be subject to a number of risks, including the following:
•
we may experience negative reactions from the financial markets, including negative impacts on our stock price;
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we may experience negative reactions from our customers, suppliers, distributors and employees;
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we will be required to pay our costs relating to the Acquisition, such as financial advisory, legal, financing and accounting costs and associated fees and expenses, whether or not the Acquisition is completed;
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we could be subject to time-consuming and costly litigation related to the Acquisition; and
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matters relating to the Acquisition (including integration planning) require substantial commitments of time and resources by our management, which could otherwise have been devoted to day-to-day operations or to other opportunities that may have been beneficial to our business.
We will incur significant acquisition-related costs in connection with the Acquisition, and we could incur substantial expenses related to the integration of Chubb.
We have incurred and expect to incur a number of non-recurring costs associated with the integration of Chubb into our business, as well as transaction fees and other costs related to the Acquisition. These costs and expenses include fees paid to financial, legal and accounting advisors, facilities and systems consolidation costs, severance and other potential employment-related costs, including severance payments that may be made to certain Chubb employees, filing fees, printing expenses and other related charges. We will need to pay some of these costs regardless of whether the Acquisition is completed.
Item 4. Mine Safety Disclosures
Information regarding mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this quarterly report.
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Item 6. Exhibits
Exhibit No.
Description of Exhibits
10.20*
Purchase Agreement for 4.125% Senior Notes due 2029.
31.1*
Certification by Russell A. Becker, Chief Executive Officer, pursuant to Exchange Act Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification by Thomas A. Lydon, Chief Financial Officer, pursuant to Exchange Act Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certifications by Russell A. Becker, Chief Executive Officer, and Thomas A. Lydon, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95.1*
Mine Safety Disclosures.
101.INS*
XBRL Instance Document.
101.SCH*
XBRL Taxonomy Extension Schema Document.
101.DEF*
XBRL Taxonomy Extension Definition Linkbase Document.
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase Document.
*
Filed herewith
**
Furnished herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report to be signed on its behalf by the undersigned, thereunto duly authorized.
APi GROUP CORPORATION
August 11, 2021
/s/ Russell A. Becker
Russell A. Becker
Chief Executive Officer
(Duly Authorized Officer)
August 11, 2021
/s/ Thomas A. Lydon
Thomas A. Lydon
Chief Financial Officer
(Principal Financial Officer)
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.