SEC Form DEFR14A filed by Silk Road Medical Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 1)

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

Silk Road Medical, Inc.

(Name of Registrant as Specified In Its Charter)

 (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

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1213 Innsbruck Drive

Sunnyvale, California 94089

August 28, 2024

AMENDMENT TO THE PROXY STATEMENT

FOR

SPECIAL MEETING OF STOCKHOLDERS

This amendment, dated August 28, 2024 (which we refer to as this “amendment”), amends and supplements the definitive proxy statement on Schedule 14A, dated July 29, 2024 (as it may be amended or supplemented from time to time, the “Proxy Statement”), filed by Silk Road Medical, Inc. (“Silk Road” or the “Company”). Terms used in this amendment that are not defined have the meaning given to them in the Proxy Statement. The Proxy Statement contains information regarding the Agreement and Plan of Merger, dated June 17, 2024 (as it may be amended from time to time, the “Merger Agreement”), by and among Silk Road, Boston Scientific Corporation, a Delaware corporation (which we refer to as “Boston Scientific”) and Seminole Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Boston Scientific (which we refer to as “Merger Sub”), pursuant to which Merger Sub will merge with and into Silk Road (which we refer to as “Merger”), with Silk Road surviving the merger and becoming a wholly owned subsidiary of Boston Scientific.

The purpose of this amendment is to provide supplemental information concerning the Merger (which we refer to as the “Supplemental Disclosures”). Except as described in this amendment, the information provided in the Proxy Statement continues to apply. All paragraph headings and page references used herein refer to the headings and pages in the Proxy Statement before any additions or deletions resulting from the Supplemental Disclosures or any other amendments. The Supplemental Disclosures are identified below by bold, underlined text. Stricken-through text shows text being deleted from a referenced disclosure in the Proxy Statement. If information in the Supplemental Disclosures differs from or updates information contained in the Proxy Statement, then the information in the Supplemental Disclosures is more current and supersedes the different information contained in the Proxy Statement. THIS AMENDMENT AND THE SUPPLEMENTAL DISCLOSURES SHOULD BE READ IN CONJUNCTION WITH THE PROXY STATEMENT AND THE PROXY STATEMENT SHOULD BE READ IN ITS ENTIRETY.

Explanatory Note

As of the date of this amendment, Silk Road is aware of two complaints (which we refer to collectively as the “complaints”) that have been filed by purported stockholders of Silk Road in New York state court against Silk Road and members of the Board, captioned Williams v. Silk Road Medical, Inc. et al., Index No. 654225/2024, filed on August 19, 2024, and Kent v. Silk Road Medical, Inc. et al., Index No. 654244/2024, filed on August 20, 2024.  The complaints each assert claims against the defendants for (i) negligent misrepresentation and concealment and (ii) negligence, allegedly in violation of New York law, for issuing a Proxy Statement that contains allegedly false and misleading statements of facts and omissions of material facts. The complaints each seek, among other relief, to enjoin Silk Road from proceeding with the Merger unless and until Silk Road cures certain alleged disclosure deficiencies in the Proxy Statement. Silk Road believes that the complaints are without merit.

In addition to the complaints, as of the date of this amendment, Silk Road has received 12 demand letters on behalf of purported stockholders alleging that the Proxy Statement omits certain purportedly material information in violation of federal securities laws. These demand letters request additional disclosures in advance of the Special Meeting.

While Silk Road believes that the disclosures set forth in the Proxy Statement comply fully with all applicable law and denies the allegations in the pending complaints described above, in order to moot plaintiffs’ disclosure claims, avoid possible expense and nuisance and business delays, and provide additional information to its stockholders, Silk Road has determined voluntarily to supplement certain disclosures in the Proxy Statement related to these demands and plaintiff stockholders’ claims with the Supplemental Disclosures. Nothing in the Supplemental Disclosures shall be deemed an admission of the legal merit, necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, Silk Road specifically denies all allegations in the complaints described above that any additional disclosure was or is required or material. The Supplemental Disclosures will not affect the timing of the special meeting.

Background of the Merger

The following bolded and underlined language is added to page 36 of the Proxy Statement in the section with the heading “Background of the Merger”:

The following bolded and underlined language is added to page 37 of the Proxy Statement in the section with the heading “Background of the Merger”:

To provide assistance to, and oversight of, Silk Road management in its discussions with Boston Scientific, as well as in view of the possibility that the Silk Road Board could elect to undertake a broader review of strategic alternatives in connection with discussions with Boston Scientific, the Silk Road Board established a Transaction Committee of the Silk Road Board (which we refer to as the “Transaction Committee”) composed of Kevin Ballinger, Mr. Lasersohn and Ms. Weatherman (with Mr. Lasersohn serving as the chairman of the Transaction Committee). The Transaction Committee was formed in the light of the benefits, convenience and efficiency of having a subset of directors oversee any process of considering strategic alternatives in the context of (1) the potentially significant workload that could be involved in any decision by Silk Road to evaluate strategic alternatives; and (2) the possibility that Silk Road management and Silk Road’s advisers would need feedback and direction on relatively short notice. The Transaction Committee was not formed due to any actual or perceived conflict of interest of any director or officer of Silk Road. The Silk Road Board was aware of Mr. Ballinger’s prior employment with Boston Scientific, which ended in July 2020, and did not view such prior employment as a conflict of interest in connection with Silk Road’s solicitation of acquisition proposals from Boston Scientific and other potential acquirers or the negotiation of, or entry into, the merger agreement. The Silk Road Board delegated to the Transaction Committee, on a non-exclusive basis, the authority to, among other things, explore, review, evaluate and negotiate a possible sale of Silk Road. The Silk Road Board retained the authority to approve any definitive agreements with respect to a possible sale of Silk Road. The Silk Road Board did not condition a sale of Silk Road on the affirmative recommendation or approval of the Transaction Committee. It was also understood that the Silk Road Board would continue to have an active role in the consideration of strategic alternatives, and that the Transaction Committee would update and seek input from the Silk Road Board as appropriate. The Silk Road Board did not provide for the payment of any compensation to the members of the Transaction Committee in consideration of their service on the committee (other than their ordinary course compensation as members of the Silk Road Board).

Opinion of BofA Securities, Inc.

The following bolded and underlined language is added to, and the language stricken is deleted from, pages 48-49 of the Proxy Statement in the section with the heading “Summary of Material Company Financial Analyses—Selected Publicly Traded Companies Analyses”:

BofA Securities reviewed publicly available financial and stock market information for Silk Road and the following seven selected publicly traded medical device companies listed in the table below, which BofA Securities considered, in its professional judgment and experience, to be most relevant to its analysis, in each case, when viewed as a whole based on each company’s financial, operating and other characteristics.:

BofA Securities reviewed, among other information, enterprise values for each of the selected publicly traded companies and for Silk Road (calculated for each as equity value based on closing share prices of the applicable selected company on June 17, 2024, plus debt and debt-like items, preferred equity and non-controlling interest (as applicable), and less cash and cash equivalents (each, as applicable)) as a multiple of estimated revenue for calendar years 2024 and 2025, for the applicable company. Financial data of the selected publicly traded companies were based on public filings and publicly available Wall Street research analysts’ estimates published by FactSet as of June 17, 2024. Financial data of Silk Road was derived from the Silk Road Long-Range Plan and equity information provided by Silk Road management, as well as publicly available Wall Street research analysts’ estimates published by FactSet as of June 17, 2024.

BofA Securities noted that the enterprise value to estimated revenue multiple for calendar year 2024 observed for Silk Road was (i) 4.53x based on Wall Street research analysts’ estimates and the closing price per share of Silk Road common stock on June 17, 2024, which was the last trading day before the announcement of the merger, (ii) 4.22x based on the Silk Road Long-Range Plan and the closing price per share of Silk Road common stock on June 17, 2024, (iii) 5.91x based on Wall Street research analysts’ estimates and the merger consideration and (iv) 5.51x based on the Silk Road Long-Range Plan and the merger consideration. BofA Securities also noted that the enterprise value to estimated revenue multiple for calendar year 2025 observed for Silk Road was (i) 4.07x based on Wall Street research analysts’ estimates and the closing price per share of Silk Road common stock on June 17, 2024, (ii) 3.57x based on the Silk Road Long-Range Plan and the closing price per share of Silk Road common stock on June 17, 2024, (iii) 5.31x based on Wall Street research analysts’ estimates and the merger consideration and (iv) 4.66x based on the Silk Road Long-Range Plan and the merger consideration.

Based on BofA Securities’ review of the enterprise values to estimated revenue multiples observed for the selected publicly traded companies and on its professional judgment and experience, BofA Securities applied (i) a multiple reference range of 2.50x to 5.00x to the estimate of calendar year 2024 revenue for Silk Road reflected in the Silk Road Long-Range Plan and (ii) a multiple reference range of 2.00x to 4.25x to the estimate of calendar year 2025 revenue for Silk Road reflected in the Silk Road Long-Range Plan, in each case, to calculate ranges of implied enterprise values for Silk Road. BofA Securities then calculated implied equity value per share reference ranges for Silk Road (rounded to the nearest $0.05) by adding to these ranges of implied enterprise values an estimate of Silk Road’s net cash of approximately $99 million as of June 30, 2024, as provided by Silk Road management, and dividing the results range of implied enterprise values that resulted from the application of the 2024 revenue multiples by a number of fully-diluted shares of Silk Road common stock outstanding ranging from approximately 45.56 million to 45.98 million and the range of implied enterprise values that resulted from the application of the 2025 revenue multiples by a number of fully-diluted shares of Silk Road common stock outstanding ranging from approximately 45.53 million to 45.98 million (in each case, calculated on a treasury stock method basis, based on information provided by Silk Road management).

The following bolded and underlined language is added to, and the language stricken is deleted from, pages 49-50 of the Proxy Statement in the section with the heading “Summary of Material Company Financial Analyses—Selected Precedent Transactions Analysis”:

The following bolded and underlined language is added to, and the language stricken is deleted from, page 50 of the Proxy Statement in the section with the heading “Summary of Material Company Financial Analyses—Discounted Cash Flow Analysis”:

BofA Securities performed a discounted cash flow analysis of Silk Road to calculate a range of implied present values per share of Silk Road common stock utilizing estimates of the standalone, unlevered, after-tax free cash flows Silk Road was expected to generate over the period from July 1, 2024 through December 31, 2033, based on the Silk Road Long-Range Plan. BofA Securities calculated a terminal value for Silk Road by applying a selected perpetuity growth rate range of 4.0% to 5.0%, based on BofA Securities’ professional judgment and experience, to the terminal year unlevered free cash flows based on the Silk Road Long-Range Plan. The unlevered free cash flows, the terminal values and the estimated benefits from the Tax Attributes, as of June 30, 2024, as provided by Silk Road management, were discounted to June 30, 2024, utilizing the mid-year discounting convention, and using discount rates ranging from 11.7% to 14.5%, which were based on an estimate of Silk Road’s weighted average cost of capital, derived using the capital asset pricing model, which took into account, among other things, the risk-free rate, the relevant unlevered beta and the historical equity risk premium.

BofA Securities then calculated an implied equity value per share reference range for Silk Road (rounded to the nearest $0.05) by adding to this range of implied enterprise values an estimate of Silk Road’s net cash of approximately $99 million as of June 30, 2024, as provided by Silk Road management, and dividing the results by a number of fully-diluted shares of Silk Road common stock outstanding ranging from approximately 45.64 million to 45.98 million (calculated on a treasury stock method basis, based on information provided by Silk Road management).

The following bolded and underlined language is added to, and the language stricken is deleted from, page 51 of the Proxy Statement in the section with the heading “Other Factors—Wall Street Analysts Price Targets”:

BofA Securities reviewed certain eight publicly available equity research analyst price targets for shares of Silk Road common stock, which indicated a present value of $17.24 to $24.76 when discounted by one year at Silk Road’s estimated mid-point cost of equity of 13.1%, derived using the capital asset pricing model.

Financial Projections

The following bolded and underlined language is added to pages 53 of the Proxy Statement in the section with the heading “Financial Projections”:

The following bolded and underlined language is added to pages 55 of the Proxy Statement in the section with the heading “Financial Projections”:

The following bolded and underlined language is added to, and the language stricken is deleted from, page 55 of the Proxy Statement in the section with the heading “Employment Arrangements Following the Merger”:

Litigation Relating to the Merger

A new section captioned “Litigation Relating to the Merger,” consisting of the following three paragraphs, are added to page 72 of the Proxy Statement:

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