Intevac (IVAC) Risk Analysis

On February 13, 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Seagate Technology Holdings plc, an Irish public limited company ("Parent"), and Irvine Acquisition Holdings, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent ("Purchaser"). The Merger Agreement provides that Purchaser will commence a tender offer (the "Offer") to acquire all of our issued and outstanding shares of common stock for $4.00 per share, payable in cash at closing, without interest and subject to reduction for any applicable withholding of taxes. Following the consummation of the Offer, Purchaser will be merged with and into us (the "Merger"), and we will continue as the surviving corporation and a wholly owned subsidiary of Parent. We currently expect the Offer and the Merger (which we refer to collectively as the "Transaction") to be completed in the first half of 2025. Completion of the Transaction is subject to customary closing conditions set forth in the Merger Agreement, including, among other things: (1) that a sufficient number of shares of our common stock are tendered into the Offer; (2) the accuracy of the representations and warranties of the Company contained in the Merger Agreement, subject to customary thresholds and exceptions; (3) our compliance with, and performance of, in all material respects our covenants and agreements contained in the Merger Agreement; (4) the absence of a Material Adverse Effect (as defined in the Merger Agreement); and (5) other customary conditions set forth in Annex I to the Merger Agreement. There is no assurance that all of the various conditions will be satisfied, or that the Transaction will be completed on the proposed terms, within the expected timeframe, or at all. The Transaction may be delayed, and may ultimately not be completed, due to a number of factors, including: -   an insufficient number of shares of our common stock being tendered into the Offer;-   potential future stockholder litigation and other legal and regulatory proceedings, which could prevent, materially restrain, or materially impair the consummation of the Transaction; and -   the failure to satisfy the other conditions to the completion of the Transaction. If the Transaction does not close, we may suffer other consequences that could adversely affect our business, financial condition, results of operations, and stock price, and our stockholders would be exposed to additional risks, including: -   to the extent that the current market price of our stock reflects an assumption that the Transaction will be completed, the market price of our common stock could decrease if the Transaction is not completed;-   investor confidence in us could decline; stockholder litigation could be brought against us; our relationships with existing and prospective customers, service providers, investors, lenders, and other business partners may be adversely impacted; we may be unable to retain key personnel; and our results of operations may be adversely impacted due to costs incurred in connection with the Transaction;-   any disruptions to our business resulting from the announcement and pendency of the Transaction, including adverse changes in our relationships with customers, suppliers, partners and employees, may continue or intensify in the event the Transaction is not consummated or is significantly delayed;-   the risks related to the diversion of attention of our management or employees from ongoing operations during the pendency of the Transaction; and -   the requirement that we pay Parent a termination fee in connection with the termination of the Merger Agreement under certain circumstances. There can be no assurance that our business, relationships with other parties, liquidity, or financial condition will not be adversely affected, as compared to the condition prior to the announcement of the Transaction, if the Transaction is not consummated. Even if successfully completed, there are certain risks to our stockholders from the Transaction, including: -   the amount of cash to be paid under the Merger Agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, analyst estimates of, or projections relating to, our common stock;-   receipt of the all-cash per share merger consideration under the Merger Agreement is taxable to stockholders that are treated as U.S. holders for U.S. federal income tax purposes; and -   if the Transaction is completed, our stockholders will forego the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent company.

We have completed a number of acquisitions and dispositions during our operating history. We have spent and may continue to spend significant resources identifying and pursuing future acquisition opportunities. Acquisitions involve numerous risks including: (1) difficulties in integrating the operations, technologies and products of the acquired companies; (2) the diversion of our management's attention from other business concerns; and (3) the potential loss of key employees of the acquired companies. Failure to achieve the anticipated benefits of the prior and any future acquisitions or to successfully integrate the operations of the companies we acquire could have a material and adverse effect on our business, financial condition and results of operations. Any future acquisitions could also result in potentially dilutive issuance of equity securities, acquisition or divestiture-related write-offs or the assumption of debt and contingent liabilities. In addition, we have made and will continue to consider making strategic divestitures, such as the disposition of our Photonics business. With any divestiture, there are risks that future operating results could be unfavorably impacted if targeted objectives, such as cost savings or earnout payments associated with the financial performance of the divested business, are not achieved or if other business disruptions occur as a result of the divestiture or activities related to the divestiture.