Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on September 9, 2020, MEDNAX, Inc., a Florida
corporation (the "Company"), through MEDNAX Services, Inc., a Florida
corporation and wholly owned subsidiary of the Company ("MEDNAX Services"),
entered into a Securities Purchase Agreement (the "Purchase Agreement") with
Radiology Partners, Inc., a Delaware corporation ("Radiology Partners"),
pursuant to which Radiology Partners will acquire all of the outstanding equity
interests (the "Transaction") of Redwood Radiology, LLC, a Delaware limited
liability company and wholly owned subsidiary of MEDNAX Services, which owns the
Company's radiology and teleradiology medical group, MEDNAX Radiology Solutions.
Pursuant to the terms and conditions of the Purchase Agreement, at the closing
of the Transaction, MEDNAX Services will receive a cash payment of $885 million,
subject to certain cash, minimum net working capital, indebtedness and other
adjustments. The Transaction is subject to customary closing conditions,
including (i) the expiration or termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii)
subject to certain exceptions, the accuracy of the representations and
warranties of each party under the Purchase Agreement, and (iii) performance by
each party in all material respects with its obligations to be performed on or
prior to the closing date under the Purchase Agreement, and, subject thereto, is
expected to close during the fourth quarter of 2020. Subject to certain
exceptions, in the event of a termination of the Purchase Agreement (i) by
MEDNAX Services as a result of Radiology Partners' (a) uncured material breach
that would result in the failure of closing conditions to be satisfied or (b)
failure to consummate the Transaction after all closing conditions have been
satisfied during which time MEDNAX Services stood ready to close, or (ii) by
either party if (a) the Transaction is not consummated on or before March 8,
2021, subject to extension until September 8, 2021 if certain closing conditions
under the Purchase Agreement have not been satisfied, or (b) a governmental
authority implements a final order prohibiting the Transaction under antitrust
laws, Radiology Partners will be required to pay MEDNAX Services a cash
termination fee of $40 million, or $45 million in the event that Radiology
Partners' failure to consummate the Transaction is due to the failure of a
specified equityholder to fund an equity commitment.
The Purchase Agreement contains customary representations, warranties,
covenants, including restrictive covenants, and limited indemnification
provisions, including with respect to medical malpractice claims of the
Company's vRad teleradiology business, as well as customary tax matters and
representation and warranty and covenant breaches. The Company has agreed to
provide certain transition services to Radiology Partners after the closing of
the Transaction pursuant to a separate transition services agreement.
The foregoing description of the Purchase Agreement is not complete and is
qualified in its entirety by the full text of the Purchase Agreement, a copy of
which is attached hereto as Exhibit 2.1 and incorporated herein by reference.
The Purchase Agreement has been included to provide the Company's shareholders
with information regarding its terms. It is not intended to provide any other
information about the Company, MEDNAX Radiology Solutions, or Radiology Partners
or their respective subsidiaries and affiliates. The Purchase Agreement contains
representations, warranties and covenants by each of MEDNAX Services and
Radiology Partners. These representations, warranties and covenants were made
solely for the benefit of the parties to the Purchase Agreement and (i) may have
been used for purposes of allocating risk between the respective parties rather
than establishing matters as facts, (ii) may have been qualified in the Purchase
Agreement by confidential disclosure schedules that were delivered by and
between the parties in connection with the signing of the Purchase Agreement,
which disclosure schedules may contain information that modifies, qualifies and
creates exceptions to the representations, warranties and covenants set forth in
the Purchase Agreement, (iii) may be subject to a contractual standard of
materiality applicable to the parties that differs from what a shareholder may
view as material and (iv) may have been made only as of the date of the Purchase
Agreement or as of another date or dates as may be specified in the Purchase
Agreement, and information concerning the subject matter of the representations,
warranties and covenants may change after the date of the Purchase Agreement,
which subsequent information may or may not be fully reflected in the Company's
public disclosures, if at all. Accordingly, shareholders should not rely upon
representations, warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of the Company,
MEDNAX Radiology Solutions, or Radiology Partners or their respective
subsidiaries and affiliates.
Certain statements and information in this Current Report on Form 8-K may be
deemed to contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements may include, but are not limited to,
statements relating to the Company's objectives, plans and strategies, and all
statements, other than statements of historical facts, that address activities,
events or developments that we intend, expect, project, believe or anticipate
will or may occur in the future. These statements are often characterized by
terminology such as "believe," "hope," "may," "anticipate," "should," "intend,"
"plan," "will," "expect," "estimate," "project," "positioned," "strategy" and
similar expressions, and are based on assumptions and assessments made by the
Company's management in light of their experience and their perception of
historical trends, current conditions, expected future developments and other
factors they believe to be appropriate. Any forward-looking statements in this
Current Report on Form 8-K are made as of the date hereof, and the Company
undertakes no duty to update or revise any such statements, whether as a result
of new information, future events or otherwise. Forward-looking statements are
not guarantees of future performance and are subject to risks and uncertainties.
Important factors that could cause actual results, developments, and business
decisions to differ materially from forward-looking statements are described in
the Company's most recent Annual Report on Form 10-K and its Quarterly Reports
on Form 10-Q, including the sections entitled "Risk Factors", as well the
Company's current reports on Form 8-K, filed with the Securities and Exchange
Commission (the "Commission"), and include the impact of the COVID-19 outbreak
on the Company and its financial condition and results of operations; the
effects of economic conditions on the Company's business; the effects of the
Affordable Care Act and potential changes thereto or a repeal thereof; the
Company's relationships with government-sponsored or funded healthcare programs,
including Medicare and Medicaid, and with managed care organizations and
commercial health insurance payors; the Company's ability to consummate the
Transaction; the timing and contribution of future acquisitions; the effects of
share repurchases; and the effects of the Company's transformation and
restructuring initiatives.
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Item 5.07 Submission of Matters to a Vote of Security Holders.
On September 9, 2020, the Company held its 2020 Annual Shareholders' Meeting
(the "Annual Meeting"). Of the 85,534,188 shares of common stock outstanding and
entitled to vote, 77,219,763 shares were represented, constituting a quorum. The
final results for each of the matters submitted to a vote of shareholders at the
Annual Meeting are as follows:
Proposal 1: All of the Board's nominees for Director were elected to serve until
the Company's 2021 Annual Shareholders' Meeting or until their respective
successors are elected and qualified, by the votes set forth in the table below:
Broker
Name For Withheld Non-Vote
Karey D. Barker 72,886,040 819,669 3,514,054
Waldemar A. Carlo, M.D. 54,655,186 19,050,523 3,514,054
Paul G. Gabos 71,969,908 1,735,801 3,514,054
Manuel Kadre 54,127,932 19,577,777 3,514,054
Thomas A. McEachin 73,247,372 458,337 3,514,054
Roger J. Medel, M.D. 72,844,516 861,193 3,514,054
Mark S. Ordan 73,100,718 604,991 3,514,054
Michael A. Rucker 72,959,283 746,426 3,514,054
Guy P. Sansone 73,079,028 626,681 3,514,054
John M. Starcher, Jr. 73,303,317 402,392 3,514,054
Shirley A. Weis 71,635,791 2,069,918 3,514,054
Proposal 2: The Articles of Amendment to the Company's Amended and Restated
Articles of Incorporation, as amended, to change the Company's name to
"Pediatrix Medical Group, Inc." were approved by the shareholders, by the votes
set forth in the table below:
Broker
For Against Abstained Non-Vote
77,071,233 120,326 28,204 0
Proposal 3: The Articles of Amendment to the Amended and Restated Articles of
Incorporation, as amended, of MEDNAX Services to change its name to "PMG
Services, Inc." were approved by the Company's shareholders, by the votes set
forth in the table below:
Broker
For Against Abstained Non-Vote
77,030,450 149,578 39,735 0
Proposal 4: The appointment of PricewaterhouseCoopers LLP as the Company's
independent registered public accounting firm for the 2020 fiscal year was
ratified by the shareholders, by the votes set forth in the table below:
Broker
For Against Abstained Non-Vote
74,792,346 2,378,079 49,338 0
Proposal 5: The shareholders advised against the compensation of the Company's
named executive officers for the 2019 fiscal year, by the votes set forth in the
table below:
Broker
For Against Abstained Non-Vote
21,309,848 49,733,278 2,662,583 3,514,054
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The Company regularly makes efforts to engage with its shareholders and intends
to continue to conduct additional outreach to its shareholders in the coming
months regarding the outcome of the shareholder advisory vote on compensation of
the Company's named executive officers for the 2019 fiscal year.
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