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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
August
25, 2026
Date of Report (Date of Earliest Event Reported)
Victory
Capital Holdings, Inc.
(Exact Name of Registrant as Specified in its
Charter)
| Delaware |
001-38388 |
32-0402956 |
| (State or Other Jurisdiction |
(Commission |
(IRS Employer |
| of Incorporation) |
File Number) |
Identification No.) |
| 15935
La Cantera Parkway; San
Antonio, TX |
|
78256 |
| (Address
of principal executive offices) |
|
(Zip
Code) |
(216)
898-2400
(Registrant’s Telephone Number, Including
Area Code)
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:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
x 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))
Securities registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange
on which registered |
| Common
Stock, Par Value $0.01 |
|
VCTR |
|
NASDAQ |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities
Exchange Act of 1934 (17 CFR §240.12b-2).
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 1.01. |
Entry into a Material Definitive Agreement. |
Merger Agreement
On August 25, 2026, Victory Capital Holdings,
Inc., a Delaware corporation (the “Company”), Fortify Holdings 1, Inc., a Delaware corporation (“Merger Sub 1”),
Fortify Holdings 2, LLC, a Delaware limited liability company (“Merger Sub 2”), GC Ferry Parent, L.P., a Delaware limited
partnership (“Seller”), and GC Ferry Holdings, Inc., a Delaware corporation (“First Eagle”), entered into an Agreement
and Plan of Merger (the “Merger Agreement”). At the closing of the transactions contemplated by the Merger Agreement (the
“Closing”), the Company will acquire First Eagle by means of a two-step merger whereby Merger Sub 1 will merge with and into
the Company, with the Company continuing as the surviving corporation, followed by the merger of the Company with and into Merger Sub
2, with Merger Sub 2 continuing as the surviving limited liability company.
At the Closing, as consideration for the contemplated
transactions under the Merger Agreement, the Company will pay and/or issue, as applicable, to Seller a combination of (a) cash, (b) newly
issued shares of common stock, par value $0.01 per share, of the Company (“Company Common Stock”), representing 4.9% of the
Company’s total outstanding Company Common Stock immediately following the Closing, and (c) newly issued shares of a new class of
non-voting convertible preferred stock, par value $0.01 per share, of the Company, which will be designated as Series B Non-Voting Convertible
Preferred Stock (“Company Convertible Preferred Stock”). Seller is majority owned by affiliates of Genstar Capital Management,
LLC (collectively, “Genstar”), with the balance of Seller owned by members of First Eagle management. The purchase price is
subject to customary adjustments for First Eagle’s indebtedness, cash, working capital and unpaid transaction expenses. The purchase
price is also subject to adjustment if Seller does not obtain client consents relating to the assignment of investment advisory contracts
or the approval of new investment advisory contracts (as applicable, the “Client Consents”) representing revenues from clients
equal to at least 92.5% of the Base Revenue Run-Rate (as defined in the Merger Agreement). The purchase price is also subject to a customary
post-Closing adjustment as well as a true-up payment in respect of Client Consents obtained in the one-year period following the Closing.
The Closing is subject to certain conditions,
including (i) the expiration or termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the “HSR Act”), (ii) the attainment of certain other regulatory approvals and authorizations, (iii) the absence
of certain legal restraints preventing the consummation of the contemplated transactions, (iv) Client Consents at Closing representing
at least 75% of the Base Revenue Run-Rate, (v) the accuracy of the parties’ respective representations and warranties contained
in the Merger Agreement (subject to customary materiality thresholds), (vi) the material performance of the parties’ respective
covenants contained in the Merger Agreement, and (vii) the absence of any Material Adverse Effect (as defined in the Merger Agreement).
The parties have made customary representations
and warranties, and agreed to customary covenants, in the Merger Agreement, including regarding (i) the conduct of First Eagle and the
Company’s respective businesses during the pre-Closing period and (ii) subject to certain qualifications as set forth in the Merger
Agreement, the parties’ use of their respective reasonable best efforts to effect the expiration or termination of the required
waiting period under the HSR Act, obtain all other required regulatory approvals and otherwise consummate the transactions contemplated
by the Merger Agreement as promptly as practicable.
The Merger Agreement may be terminated under certain
circumstances, including by mutual agreement or by either party (i) if the Closing has not occurred on or before May 25, 2027 (subject
to extension as contemplated by the Merger Agreement), (ii) in the event of certain breaches by the other party of its representations,
warranties or covenants in the Merger Agreement, which breach would give rise to the failure of a closing condition, or (iii) in the event
a final, non-appealable order prohibits the contemplated transactions under the Merger Agreement.
The issuance of the shares of the Company Common
Stock and the Company Convertible Preferred Stock is subject to the approval of the Company stockholders by affirmative vote of the Company
stockholders representing a majority of the Company Common Stock present in person or by proxy and entitled to vote on such matter at
a special meeting of the stockholders to be held to consider such proposals. In the event the Company does not obtain such stockholder
approval, the share consideration described above would be adjusted such that the shares of Company Common Stock and Company Convertible
Preferred Stock issued to Seller will be subject to a cap of 19.9% of the total outstanding Company Common Stock as of the close of business
as of immediately prior to the Closing Date and Seller will instead receive the balance of the share consideration in a number of newly
issued shares of a new class of cumulative perpetual preferred stock, par value $0.01 per share, of the Company (“Company Perpetual
Preferred Stock”).
The foregoing description of the Merger Agreement
does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached hereto
as Exhibit 2.1, and is incorporated herein by reference. The Merger Agreement has been attached hereto to provide investors with information
regarding its terms. The Merger Agreement is not intended to provide any other factual information about the Company, Seller, First Eagle
or the other parties thereto. In particular, the assertions embodied in the representations and warranties in the Merger Agreement were
made as of a specified date, are modified or qualified by information in confidential disclosure schedules provided by each party to the
other in connection with the Merger Agreement, may be subject to a contractual standard of materiality different from what might be viewed
as material to the Company’s stockholders, or may have been used for the purpose of allocating risk between the parties. Accordingly,
the representations and warranties in the Merger Agreement are not necessarily characterizations of the actual state of facts about the
Company, Seller or First Eagle at the time they were made or otherwise and should only be read in conjunction with the other information
that the Company makes publicly available in reports, statements and other documents filed with the SEC.
Shareholder Agreement
At the Closing, the Company, Seller and Genstar
will enter into a shareholder agreement (the “Shareholder Agreement”), pursuant to which, among other things, Seller (or,
if the share consideration is distributed to the equityholders of Seller in accordance with the Shareholder Agreement, Genstar) will be
(i) granted certain resale shelf and piggyback registration rights in respect of the Company Common Stock and any shares of Company
Common Stock issuable by the Company upon the conversion of the Company Convertible Preferred Stock, in each case, to the extent the Company
Convertible Preferred Stock and Company Common Stock was issued to Seller under the Merger Agreement (such shares of Company Common Stock
and Company Convertible Preferred Stock, the “Acquired Shares”) or acquired pursuant to Seller’s participation rights
under the Shareholder Agreement and (ii) entitled to nominate two members of the Board for so long as it holds at least 50% of the
Holder’s Share Amount (as defined in the Shareholder Agreement) (without giving effect to certain sales by Seller and/or Genstar)
and one member of the Board for so long as it holds at least 33% of the Holder’s Share Amount (without giving effect to certain
sales by Seller and/or Genstar).
In addition, for a period of three years following
the Closing, Seller and Genstar will be subject to a customary “lock-up” of the Acquired Shares (subject to certain exceptions,
including transfers to permitted transferees) and a standstill, which among other things, prohibits Seller from acquiring additional equity
securities of the Company (subject to certain exceptions) in excess of 4.9% of the Company’s equity securities. Subject to certain
exceptions, after the three-year standstill period, Seller and Genstar will be prohibited from acquiring voting securities of the Company
in excess of 24.9% of the voting securities of the Company.
The Shareholder Agreement also provides for participation
rights for the benefit of Seller and/or Genstar in connection with certain issuances of equity securities of the Company.
Series B Non-Voting Convertible Preferred Stock Certificate of
Designation
At the Closing, the shares of Company Convertible
Preferred Stock issued to Seller under the Merger Agreement will be issued pursuant to the terms of a Certificate of Designations, Powers,
Preferences and Rights of Series B Non-Voting Convertible Preferred Stock of the Company (the “Series B Certificate of Designations”),
to be filed with the Delaware Secretary of State prior to the Closing. Except as otherwise provided by applicable law or Series B Certificate
of Designations, the holders of the Company Convertible Preferred Stock will not have voting rights (other than specified approval rights
with respect to certain actions by the Company).
The Company Convertible Preferred Stock is economically
equivalent to the Company Common Stock (including with respect to dividends), except that, upon liquidation of the Company (but not a
consolidation, merger or reorganization), holders of the Company Convertible Preferred Stock would be entitled to a liquidation preference
equal to $0.01 per share, plus the amount of any declared but unpaid dividends thereon as of the applicable date.
The shares of Company Convertible Preferred Stock
are not convertible to shares of Company Common Stock at the option of the holder. Upon transfers to an unaffiliated third party, the
shares of Company Convertible Preferred Stock so transferred will automatically convert into shares of Company Common Stock in the hands
of the transferee; provided, that, any such transfer must be in accordance with the Shareholder Agreement.
Credit Facilities Commitment Letter
In connection with entering into the Merger Agreement,
on August 25, 2026, the Company entered into a commitment letter (the “Credit Facilities Commitment Letter”) with Bank of
America, N.A. (“Bank of America”), BofA Securities, Inc. (“BofA Securities” and, together with Bank of America,
“BofA”), Royal Bank of Canada (“Royal Bank”) and RBC Capital Markets (“RBCCM” and, together with Royal
Bank, “RBC”; RBC, together with BofA, the “Commitment Parties”), pursuant to which the Commitment Parties have
committed to provide, and have agreed to arrange and syndicate, (a) a new seven-year senior secured first lien incremental term loan facility
(the “Incremental Term Loan Facility”) in an aggregate principal amount of up to $3.5 billion, (b) a new five-year senior
secured first lien revolving credit facility (the “New Revolving Facility”) in an aggregate principal amount of up to $200.0
million and (c) a senior secured bridge loan facility (the “Secured Bridge Facility” and, together with the Incremental Term
Loan Facility and the New Revolving Facility, the “Credit Facilities”) in an aggregate principal amount of up to $950.0 million,
which Secured Bridge Facility will be reduced by the gross cash proceeds of any senior secured notes (the “Secured Notes”)
issued on or prior to the Closing. The Incremental Term Loan Facility and the New Revolving Facility will be documented as incremental
facilities under the Company’s existing Credit Agreement, dated as of July 1, 2019 (as amended, supplemented or otherwise modified
from time to time, the “Existing Credit Agreement”), among the Company, the lenders and other financial institutions from
time to time party thereto and Bank of America, N.A., as administrative agent.
Proceeds of the Incremental Term Loan Facility
will be used, together with the proceeds of the Secured Bridge Facility (or any Secured Notes issued in lieu thereof), the proceeds of
any borrowings under the New Revolving Facility on the Closing date (to the extent such borrowings are permitted on the Closing date)
and cash on hand at the Company, First Eagle and/or their respective subsidiaries, to finance the acquisition and the payment of any fees,
commissions and expenses in connection therewith. The availability of the Credit Facilities is subject to the satisfaction of certain
customary conditions precedent.
Cumulative Perpetual Preferred Stock Certificate of Designation
At the Closing, if issued pursuant to the terms
of the Merger Agreement, Company Perpetual Preferred Stock issued to Seller will be issued pursuant to the terms of a Certificate of Designations,
Powers, Preferences and Rights of Cumulative Perpetual Preferred Stock of the Company (the “Cumulative Preferred Certificate of
Designations”), to be filed with the Delaware Secretary of State prior to the Closing. Except as otherwise provided by applicable
law or the Cumulative Preferred Certificate of Designations, the holders of the Company Perpetual Preferred Stock will not have voting
rights (other than specified approval rights with respect to certain actions by the Company).
The Company Perpetual Preferred Stock will rank
senior to the Company Common Stock, Company Convertible Preferred Stock and the Company’s Series A Non-Voting Convertible Preferred
Stock, par value $0.01 per share (including with respect to dividends). The Company may, at its option, redeem all or any portion of the
outstanding shares of Company Perpetual Preferred Stock at any time following the closing date at the liquidation preference plus accrued
and unpaid dividends. Upon a change of control of the Company, either the Company or holders of the Company Perpetual Preferred Stock
may redeem Company Perpetual Preferred Stock at the liquidation preference plus accrued and unpaid dividends.
Holders of the Company Perpetual Preferred Stock will be entitled
to receive cumulative dividends that will initially accrue at a rate of 8.0% per annum on the then-current liquidation preference (initially
$1,000 per share). The dividend rate will automatically increase by 1.0% per annum on each anniversary of the closing date for so long
as the Company Perpetual Preferred Stock remains outstanding, subject to a maximum rate of 15.0% per annum. Dividends are payable quarterly
in arrears and any accumulated and unpaid dividends that are not declared and paid in cash will be added to the liquidation preference.
| Item 3.02. |
Unregistered Sales of Equity Securities. |
The information under Item 1.01 of this Current
Report on Form 8-K with respect to the issuance of the shares of Company Common Stock, Company Convertible Preferred Stock and Company
Perpetual Preferred Stock, if applicable, to Seller pursuant to the terms of the Merger Agreement is incorporated herein by reference.
Such shares to be issued to Seller as consideration under the Merger Agreement will be issued to Seller in reliance on the exemption from
registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506
under the Securities Act.
| Item 9.01. |
Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit |
|
Description |
| |
|
|
| 2.1 |
|
Agreement and Plan of Merger, dated August 25, 2026, by and among Victory Capital Holdings, Inc., Fortify Holdings 1, Inc., Fortify Holdings 2, LLC, GC Ferry Parent, L.P. and GC Ferry Holdings, Inc.* |
| |
|
|
| 104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * |
Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules have been omitted. The Company agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request. |
Forward Looking Statements
This report contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable U.S. federal and non-U.S. securities
laws. Forward-looking statements can be identified by words such as “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “plan,” “project,” “target,” “will,” “would,”
“could,” “should,” “may” and similar expressions, or by discussions of strategy, objectives or future
performance. These statements include, without limitation, statements regarding the expected timing and completion of the proposed acquisition
of First Eagle; the anticipated benefits of the transaction, including expected net expense synergies, earnings accretion, revenue, Adjusted
EBITDA, Adjusted EBITDA margin, fee rate, organic growth and net flows; pro forma financial, operating and asset under management metrics;
the Company’s expected capital structure, indebtedness, net leverage and pace of de-levering; the expected treatment of First Eagle’s
investment teams, brands, products and platforms following closing; statements regarding the Company’s longer-term growth objectives;
and the future performance of the combined company. Forward-looking statements are not historical facts. They reflect the Company’s
current expectations, estimates and assumptions, are inherently subject to significant business, economic, competitive and regulatory
uncertainties and contingencies that are difficult to predict, and are not guarantees of future performance. Actual results may differ
materially.
Although it is not possible
to identify all such risks and factors, they include, among others: the risk that one or more conditions to closing is not satisfied and
that the transaction is not completed on the anticipated timeline or at all, including the failure to obtain required regulatory approvals
or required client and fund board consents; the risk that the merger agreement is terminated; the risk that the Company’s shareholders
do not approve the issuance of equity in connection with the transaction; dilution to existing shareholders resulting from the issuance
of common stock and non-voting convertible preferred stock, including on a fully diluted, as-converted basis; risks relating to the financing
of the transaction, including the availability, cost and terms of debt financing, prevailing interest rates, the Company’s ability
to syndicate the financing on expected terms, the substantial increase in the Company’s indebtedness, restrictions imposed by the
terms of that indebtedness, and the Company’s ability to de-lever on the anticipated timeline; the possibility of adverse changes
in the Company’s credit ratings; the risk that anticipated net expense synergies are not realized in the amounts or within the timeframe
expected, or at all, and that the costs to achieve them exceed current estimates; risks relating to integration, including the diversion
of management attention, the retention of key investment professionals, distribution personnel and other employees, the retention of clients
and assets, the integration of operations, technology and administrative functions, and decisions regarding branding and the rationalization
of products, strategies or teams; the fact that financial and operating information regarding First Eagle used in preparing the estimates
in this press release is derived from a privately held company, has not been independently verified or audited, and is based in part on
representations of First Eagle’s management and on the Company’s due diligence, which may prove incomplete or inaccurate;
risks relating to investment performance and net client cash flows, including that historical net flows, investment performance and Morningstar
ratings are not indicative of future results and that ratings and rankings are subject to change; the sensitivity of assets under management,
revenue and earnings to conditions in the financial markets and to changes in interest rates, credit spreads and asset valuations; the
Company’s dependence on third-party distribution relationships, including its global distribution arrangements; competitive pressure
and ongoing consolidation in the asset management industry; the incurrence of significant transaction, financing and integration expenses;
the risk of litigation or regulatory proceedings relating to the transaction; general economic, market, geopolitical and regulatory conditions;
and the other risks and factors described under “Risk Factors” and elsewhere in the Company’s Annual Report on Form
10-K for the year ended December 31, 2025, its subsequent Quarterly Reports on Form 10-Q, and its other filings with the U.S. Securities
and Exchange Commission.
Any forward-looking statement
speaks only as of the date on which it is made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
Important Additional Information
and Where to Find It
This communication is being issued in connection
with the proposed acquisition of First Eagle by the Company. In connection with the transaction, the Company intends to file a proxy statement
and certain other documents regarding the transaction with the SEC. The definitive version of the proxy statement (if and when available)
will be mailed to the Company’s stockholders.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ
THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED
WITH THE SEC, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION AND RELATED MATTERS.
Investors and security holders
may obtain, free of charge, copies of the proxy statement (when available) and other documents filed with the SEC through the website
maintained by the SEC at www.sec.gov or the investor relations section of the Company’s website at https://ir.vcm.com.
Participants in the Solicitation
The Company and certain of its
directors, executive officers and other employees may be deemed to be “participants” in the solicitation of proxies from the
Company’s stockholders with respect to the special meeting of stockholders that will be held to consider and vote upon the approval
of the share issuance in connection with the proposed transaction. Additional information regarding the identity of the participants,
and their respective direct and indirect interests in the transaction, by security holdings or otherwise, will be set forth in the proxy
statement and other materials to be filed with the SEC in connection with the transaction (if and when they become available). Information
relating to the Company’s executive officers and directors can also be found in the Company’s proxy statement for its 2026
annual meeting of stockholders filed with the SEC.
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.
| |
VICTORY CAPITAL HOLDINGS, INC. |
| |
|
|
| |
By: |
/s/ Nina Gupta |
| |
|
Name: |
Nina Gupta |
| |
|
Title: |
Chief Legal Officer |
Date:
August 31, 2026
