Avid Bioservices Inc (CDMO)

[cheynew]

I hope everyone will vote AGAINST this.

PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION, DATED DECEMBER 3, 2024

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Avid Bioservices, Inc.
14191 Myford Road
Tustin, California 92780
Dear Avid Bioservices, Inc. Stockholder:
You are cordially invited to attend a virtual special meeting (such meeting, including any adjournments or postponements thereof, the “Special Meeting”) of stockholders of Avid Bioservices, Inc. (“Avid” or the “Company”) to be held virtually on [•], at [•] Pacific time at www.virtualshareholdermeeting.com/[•].
At the Special Meeting, you will be asked to consider and vote on (1) a proposal to adopt the Agreement and Plan of Merger, dated November 6, 2024 (such agreement, as it may be amended, modified or supplemented from time to time, the “Merger Agreement”), by and among Avid, Space Finco, Inc., a Delaware corporation (“Parent”), and Space Mergerco, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”) and approve the Merger (as defined below) (the “Merger Agreement Proposal”), (2) a proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to Avid’s named executive officers that is based on or otherwise relates to the Merger Agreement and the transactions contemplated by the Merger Agreement (the “Compensation Proposal”), and (3) a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary or appropriate, including to solicit additional proxies to approve the Merger Agreement Proposal if there are insufficient votes to approve the Merger Agreement Proposal at the time of the Special Meeting (the “Adjournment Proposal”). Parent and Merger Sub are owned by funds managed by affiliates of GHO Capital Partners LLP (“GHO”) and Ampersand Capital Partners (“Ampersand”). Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into Avid, and as a result of which the separate existence of Merger Sub will cease, and Avid will continue as the surviving corporation and a wholly owned subsidiary of Parent (the “Merger”).
If the Merger is completed, you will be entitled to receive $12.50 in cash, without interest and subject to any withholding of taxes required by applicable law, for each share of Avid common stock (the “common stock”) that you own (unless you have properly exercised your appraisal rights), which represents a premium of approximately: (i) 13.8% to the closing price of Avid’s common stock of $10.98 on November 6, 2024, the last full trading day prior to the announcement of the transaction (the “Unaffected Date”); (ii) 21.9% to the volume-weighted average price of Avid’s common stock for the twenty (20) day period ending on the Unaffected Date; and (iii) 50.1% to the volume-weighted average price of Avid’s common stock for the six (6) month period ending on the Unaffected Date.
The Company’s Board of Directors (the “Board of Directors”), after considering the factors more fully described in the accompanying proxy statement, has unanimously: (i) determined that the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement (the “Transactions”), including the Merger, are advisable, and in the best interest of, Avid and its stockholders; (ii) authorized and approved the execution, delivery and performance by Avid of the Merger Agreement and the consummation of the Transactions, including the Merger; and (iii) subject to the terms and conditions of the Merger Agreement, resolved to recommend that Avid’s stockholders adopt the Merger Agreement and approve the Merger and the Transactions. The Board of Directors unanimously recommends, on behalf of Avid, that you vote: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal.
The accompanying proxy statement provides detailed information about the Special Meeting, the Merger Agreement and the Merger. A copy of the Merger Agreement is attached as Annex A to the proxy statement. We urge you to read the proxy statement, its annexes, including, but not limited to, the Merger Agreement, and any document incorporated by reference carefully and in their entirety.
The proxy statement also describes the actions and determinations of the Board of Directors in connection with its evaluation of the Merger Agreement and the Merger. You should carefully read and consider the entire accompanying proxy statement and its annexes, including, but not limited to, the Merger Agreement, as they contain important information about, among other things, the Merger and how it affects you.
TABLE OF CONTENTS

Whether or not you plan to attend the Special Meeting virtually, please complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone (using the instructions provided in the enclosed proxy card). If you attend the Special Meeting and vote virtually, your vote will revoke any proxy that you have previously submitted.
If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the Merger Agreement Proposal, without your instructions.
Your vote is very important, regardless of the number of shares that you own. We cannot complete the Merger unless the Merger Agreement Proposal is approved by the affirmative vote of the holders of a majority of the shares of Avid’s common stock that are issued and outstanding as of the close of business on [•], 2024, which is the record date for the Special Meeting.
If you have any questions concerning the Merger Agreement, the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:
MacKenzie Partners, Inc.
7 Penn Plaza, #503
New York, NY 10001
[phone] (Call Collect)
Call Toll-free: [phone]
[e-mail]
On behalf of the Board of Directors, I thank you for your support and appreciate your consideration of this matter.
Sincerely,








Joseph Carleone, Ph.D.


Nicholas S. Green
Chairman of the Board of Directors


President and Chief Executive Officer




Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Merger, passed upon the merits or fairness of the Merger Agreement or the Transactions, including the proposed Merger, or passed upon the adequacy or accuracy of the information contained in the accompanying proxy statement. Any representation to the contrary is a criminal offense.
The accompanying proxy statement is dated [•], 2024, and, together with the enclosed form of proxy card, is first being mailed to our stockholders on or about [•], 2024.
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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION, DATED DECEMBER 3, 2024

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Avid Bioservices, Inc.
14191 Myford Road
Tustin, California 92780
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [•]
Notice is hereby given that a virtual special meeting of stockholders (including any adjournments or postponements thereof, the “Special Meeting”) of Avid Bioservices, Inc., a Delaware corporation (“Avid” or the “Company”), will be held virtually on [•], at [•] Pacific time at www.virtualshareholdermeeting.com/[•], for the following purposes:
1.
To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated November 6, 2024, (such agreement, as it may be amended, modified or supplemented from time to time, the “Merger Agreement”), by and among Avid, Space Finco, Inc., a Delaware corporation (“Parent”), and Space Mergerco, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”) and approve the Merger (as defined below) (the “Merger Agreement Proposal”). Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into Avid, and as a result of which the separate existence of Merger Sub will cease, and Avid will continue as the surviving corporation and a wholly owned subsidiary of Parent (the “Merger”);
2.
To consider and vote on the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to Avid’s named executive officers that is based on or otherwise relates to the Merger Agreement and the transactions contemplated by the Merger Agreement (the “Compensation Proposal”); and
3.
To consider and vote on any proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, including to solicit additional proxies to approve the Merger Agreement Proposal if there are insufficient votes to approve the Merger Agreement Proposal at the time of the Special Meeting (the “Adjournment Proposal”).
Only stockholders of record as of the close of business on [•], 2024, are entitled to notice of the Special Meeting and to vote at the Special Meeting or any adjournment, postponement or other delay thereof.
The Company’s Board of Directors unanimously recommends, on behalf of Avid, that you vote: (1) “FOR” the Merger Agreement Proposal; (2) “FOR” the Compensation Proposal; and (3) “FOR” the Adjournment Proposal.
All stockholders are invited to attend the Special Meeting virtually. Whether or not you plan to attend the Special Meeting, please complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone (using the instructions provided in the enclosed proxy card). If you attend the Special Meeting and vote thereat, your vote will revoke any proxy that you have previously submitted. If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the Merger Agreement Proposal, without your instructions. If you hold your shares through a bank, broker or other nominee, you must obtain a “legal proxy” in order to vote virtually at the Special Meeting.








Joseph Carleone, Ph.D.


Nicholas S. Green
Chairman of the Board of Directors


President and Chief Executive Officer




Dated: , 2024
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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION, DATED DECEMBER 3, 2024
AVID BIOSERVICES, INC.
14191 Myford Road
Tustin, California 92780
IMPORTANT NOTICE REGARDING THE PROXY MATERIALS
FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON [•]
The accompanying proxy statement is available on the investor relations page of our website at https://ir.avidbio.com. The information provided on, or accessible through, our website is not part of the proxy statement, and therefore is not incorporated therein by reference. The accompanying proxy statement is dated [•], 2024 and is first being mailed on or about [•], 2024 to all stockholders of record entitled to vote at the Special Meeting.
A complete list of the stockholders entitled to vote at the Special Meeting will be available for examination during regular business hours for the ten (10) days prior to the Special Meeting at our headquarters, located at 14191 Myford Road, Tustin, California 92780. Stockholders may examine the list for any legally valid purpose related to the Special Meeting. If you would like to examine the list, please contact our corporate secretary to schedule an appointment by calling [phone] or writing to him at the address above.
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING VIRTUALLY, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE: (1) BY TELEPHONE; (2) THROUGH THE INTERNET; OR (3) BY COMPLETING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before it is voted at the Special Meeting in the manner described in the accompanying proxy statement.
If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your broker or other agent cannot vote on any of the proposals, including the Merger Agreement Proposal, without your instructions.
If you are a stockholder of record, voting virtually at the Special Meeting will revoke any proxy that you previously submitted. If you hold your shares through a bank, broker or other nominee, you must obtain a “legal proxy” in order to vote virtually at the Special Meeting.
If you fail to (1) return your proxy card, (2) grant your proxy electronically over the Internet or by telephone or (3) vote virtually at the Special Meeting, your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting and, if a quorum is present, will have the same effect as a vote “AGAINST” the Merger Agreement Proposal, the Compensation Proposal and the Adjournment Proposal (as defined below).
You should carefully read and consider the entire accompanying proxy statement and its annexes, including, but not limited to, the Merger Agreement, along with all of the documents incorporated by reference into the accompanying proxy statement, as they contain important information about, among other things, the Merger and how it affects you. If you have any questions concerning the Merger Agreement, the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:
MacKenzie Partners, Inc.
7 Penn Plaza, #503
New York, NY 10001
[phone] (Call Collect)
Call Toll-free: [phone]
[e-mail]
TABLE OF CONTENTS

TABLE OF CONTENTS







Page
SUMMARY


1
The Special Meeting


1
Vote Required; Abstentions and Broker Non-Votes


2
The Merger


2
Parties Involved in the Merger


2
Effect of the Merger


3
Effect on Avid if the Merger is Not Completed


3
Merger Consideration


4
Recommendation of the Avid Board of Directors


5
Opinion of Moelis & Company LLC


5
Interests of Avid’s Directors and Executive Officers in the Merger


6
Financing of the Merger


7
Appraisal Rights


8
Material U.S. Federal Income Tax Consequences of the Merger


9
Regulatory Approvals Required for the Merger


9
Proposal 1: The Merger Agreement Proposal


10
Conduct of Business Pending the Merger


10
Conditions to the Closing of the Merger


10
Termination of the Merger Agreement


12
QUESTIONS AND ANSWERS


13
FORWARD-LOOKING STATEMENTS


20
THE SPECIAL MEETING


21
Date, Time and Place


21
Purpose of the Special Meeting


21
Record Date; Shares Entitled to Vote; Quorum


21
Vote Required; Abstentions and Broker Non-Votes


21
Shares Held by Avid’s Directors and Executive Officers


22
Voting of Proxies


22
Revocability of Proxies


22
Adjournments and Recess


23
Board of Directors’ Recommendation


23
Solicitation of Proxies


23
Anticipated Date of Completion of the Merger


23
Delisting and Deregistration of Company Common Stock


23
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on [•]


23
Questions and Additional Information


24
THE MERGER


25
Parties Involved in the Merger


25
Effect of the Merger


25
Effect on Avid if the Merger is Not Completed


26
Merger Consideration


26
Background of the Merger


26
Recommendation of the Board of Directors and Reasons for the Merger


39
Opinion of Moelis & Company LLC


44
Financial Projections


48
Interests of Avid’s Directors and Executive Officers in the Merger


50
Financing of the Merger


59
Appraisal Rights


61




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TABLE OF CONTENTS








Page
Accounting Treatment


66
Material U.S. Federal Income Tax Consequences of the Merger


66
Regulatory Approvals Required for the Merger


69
Legal Proceedings


70
PROPOSAL 1: THE MERGER AGREEMENT PROPOSAL


71
Effects of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers


71
Closing and Effective Time


71
Merger Consideration


72
Exchange and Payment Procedures


73
Representations and Warranties


73
Access and Investigation


77
Conduct of Business Pending the Merger


77
No Solicitation of Other Offers


80
The Board of Directors’ Recommendation; Company Adverse Change Recommendation


82
Employee Benefits


84
Efforts to Close the Merger


85
Cooperation with the Financing


87
Director and Officer Indemnification and Insurance


90
Other Covenants


91
Conditions to the Closing of the Merger


91
Termination of the Merger Agreement


93
Termination Fee


94
Specific Performance


95
Limitations of Liability


95
Fees and Expenses


96
Amendment


96
Governing Law


96
PROPOSAL 2: THE COMPENSATION PROPOSAL


97
Vote Required and Board of Directors Recommendation


97
PROPOSAL 3: THE ADJOURNMENT PROPOSAL


98
MARKET PRICES AND DIVIDEND DATA


99
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


100
OTHER MATTERS


102
Other Matters


102
Future Stockholder Proposals


102
Householding of Special Meeting Materials


102
WHERE YOU CAN FIND MORE INFORMATION


103
MISCELLANEOUS


105








Annexes and Exhibits








Annex A


The Merger Agreement


A-1
Annex B


Opinion of Moelis & Company LLC


B-1
Annex C


Section 262 of the General Corporation Law of the State of Delaware