Sumo Logic (SUMO) 8-KFrancisco Partners Completes Acquisition of Sumo Logic

This Current Report on Form 8-K is being filed in connection with the completion of the previously announced Merger (as described below) pursuant to the Agreement and Plan of Merger, dated as of February 9, 2023 (the “Merger Agreement”), between Serrano Parent, LLC, a Delaware limited liability company (“Parent”), Serrano Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and Sumo Logic, Inc., a Delaware corporation (the “Company”).

On May 12, 2023 (the “Closing Date”), pursuant to the Merger Agreement, Merger Sub merged with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Parent and Merger Sub were formed by affiliates of funds advised by Francisco Partners (the “Francisco Funds”). Capitalized terms used herein but not otherwise defined have the meaning set forth in the Merger Agreement.

The information set forth in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.

On the Closing Date, Parent, as the borrower, entered into that certain Credit Agreement, among Serrano Intermediate, LLC, the Company, as subsidiary guarantor, the direct parent company of Parent, as a guarantor, AB Private Credit Investors LLC, as administrative agent and collateral agent, and the lenders party thereto (the “Credit Agreement”), which provides for an initial term loan facility in an aggregate principal amount of $500,000,000 and a revolving credit facility of $50,000,000. The obligations under the Credit Agreement are secured on a first priority basis by substantially all assets of the borrowers and the guarantors (subject to certain exclusions and exceptions). The Credit Agreement includes representations and warranties, covenants, events of default, and other provisions that are customary for facilities of their respective types.

Concurrently with the closing of the Merger, the Company paid all outstanding fees and expenses and terminated all credit commitments outstanding under that certain Amended and Restated Loan and Security Agreement, dated as of February 8, 2021, by and between the Company as a borrower, and Silicon Valley Bank, a California corporation, as a lender.

The information set forth in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”):

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 full text of the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on February 9, 2023, which is incorporated herein by reference.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

The information set forth in the Introductory Note and under Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

The Company notified The Nasdaq Stock Market LLC (“Nasdaq”) on May 12, 2023 of the consummation of the Merger. The Company requested that Nasdaq delist its Common Stock on May 12, 2023. As a result, Nasdaq filed a Form 25 with the SEC to remove the Common Stock from listing on Nasdaq and deregister the Common Stock pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The Common Stock ceased trading on the Nasdaq effective prior to the opening of trading on May 12, 2023. After effectiveness of the Form 25, the Company intends to file with the SEC a certification and notice of termination on Form 15 to terminate the registration of the Common Stock under the Exchange Act and suspend the Company’s reporting obligations under Section 13 and Section 15(d) of the Exchange Act.

The information set forth in the Introductory Note and under Items 2.01, 3.01 and 5.03 of this Current Report on Form 8-K is incorporated herein by reference.

Pursuant to the Merger Agreement and in connection with the consummation of the Merger, each outstanding share of Common Stock that was issued and outstanding immediately prior to the Effective Time (except as described in Item 2.01 hereof) was converted, at the Effective Time, into the right to receive the Per Share Price. Accordingly, at the Effective Time, the holders of such shares of Common Stock ceased to have any rights as stockholders of the Company, other than the right to receive the Per Share Price.

The information set forth in the Introductory Note and under Items 2.01 and 3.01 of this Current Report on Form 8-K is incorporated herein by reference.

As a result of the Merger, a change in control of the Company occurred, and the Company became a wholly owned subsidiary of Parent. The total amount of consideration payable to the Company’s equityholders in connection with the Merger was approximately $1.75 billion. The funds used by Parent to consummate the Merger and complete the related transactions came from equity contributions from the invested funds affiliated with Francisco Partners, and the proceeds received in connection with debt financing pursuant to the approximately $500 million term loan described above.

The information set forth in the Introductory Note and under Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

Immediately following completion of the Merger, Katherine Haar and Jennifer McCord were elected directors of the Company. The following persons, who were directors of the Company immediately prior to the completion of the Merger, resigned from the board of directors of the Company (the “Board”) and the committees of the Board on which they served, if any, at the Effective Time: Joseph Ansanelli, Christian Beedgen, Sandra Bergeron, Margaret Francis, Randy Gottfried, John D. Harkey, Jr., Tracey Newell, Ramin Sayar, and Timothy Youngblood.

Immediately following completion of the Merger, Stewart Grierson, age 57, resigned from his position as chief financial officer of the Company and was appointed as chief operating officer of the Company. Mr. Grierson served as the Company’s chief financial officer since December 2021. Prior to joining the Company, Mr. Grierson was the chief financial officer of Delphix Corporation, an enterprise software development and IT operations company, from April 2015 to December 2021. Prior to joining Delphix, Mr. Grierson served as chief financial officer and senior vice president, operations at Coraid, Inc. and as chief financial officer of ArcSight, Inc. Earlier in Mr. Grierson’s career, he worked at KPMG LLP as a senior manager. Mr. Grierson also serves on the board of directors of a privately-held company. Mr. Grierson holds a B.A. in Economics and a graduate’s degree in accounting from McGill University.

In addition, immediately following completion of the Merger, Jennifer McCord, age 46, resigned from her positions as senior vice president, finance, and chief accounting officer and was appointed as chief financial officer of the Company. Ms. McCord served as the Company’s chief accounting officer from February 2019 and as senior vice president, finance, from September 2022. Ms. McCord also served as the Company’s vice president, finance, from January 2020 to August 2022. Prior to joining the Company, Ms. McCord served as the vice president, corporate controller at Duo Security, acquired by Cisco Systems, from January 2018 to February 2019. Before Duo, Ms. McCord held various positions at Apttus, GoFundMe, Guidewire, Centrify and Oracle. Earlier in Ms. McCord’s career, she worked for PricewaterhouseCoopers. Ms. McCord holds a B.S. in Finance from Arizona State University.

Mr. Sayar, who was the Company’s chief executive officer prior to the Effective Time, resigned in connection with the Closing. In connection with his separation, Mr. Sayar will be entitled to the payments and benefits under his Change in Control and Severance Agreement with the Company, effective as of December 10, 2019, subject to his execution and non-revocation of a separation agreement and release of claims. The foregoing summary is qualified in its entirety by reference to the complete text of the Company’s Form of Change in Control and Severance Agreement, a copy of which is filed as Exhibit 10.6 to the Company’s Form S-1 filed with the SEC on August 24, 2020.

The information set forth in the Introductory Note and under Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

Effective upon completion of the Merger, the certificate of incorporation of the Company, as in effect immediately prior to the Merger, was amended and restated to be in the form of the certificate of incorporation attached as Exhibit 3.1 hereto, which is incorporated herein by reference.

Effective upon completion of the Merger, the bylaws of the Company, as in effect immediately prior to the Merger, were amended and restated to be in the form of the bylaws attached as Exhibit 3.2 hereto, which is incorporated herein by reference.

On May 12, 2023, the Company issued a press release announcing the completion of the Merger. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.