SEC Form S-4: Definition, Purpose, and Filing Requirements

What Is SEC Form S-4?

SEC Form S-4 is filed by a publicly traded company with the Securities and Exchange Commission (SEC). SEC Form S-4 is required to register any material information related to a merger or an acquisition. The form is also filed by companies undergoing an exchange offer, where securities are offered in place of cash. There are some key details that companies must include on the form, including their registered name and the area where they are incorporated.

Understanding SEC Form S-4

SEC Form S-4 is known as the Registration Statement under the Securities Exchange Act of 1933. Public or reporting companies must submit Form S-4 to the SEC whenever they are involved in a merger, acquisition, or stock exchange offer. The SEC reviews the information to ensure that the transaction is legal and able to proceed.

For merger and acquisition (M&A) transactions, the SEC requires that Form S-4 contain information regarding several factors, including the:

• Terms of the transaction
• Risk factors
• Ratio of earnings to fixed charges and other ratios
• pro-forma financial information
• Material contracts with the company being acquired
• Additional information required for reoffering by persons and parties deemed to be underwriters
• Interests of named experts and counsel

When completing SEC Form S-4, a company must include its registered name, jurisidiction of incorporation, classification code number, employer identification number (EIN), address and names of the principal executive officers, and the name and details of the service agent. Other details include the date of the proposed sale and the company's filer status.

Special Considerations

All mergers require SEC Form S-4 filing. For example, here are five typical types of mergers:

• Conglomerate Mergers: These mergers involve two unrelated companies in terms of business who join to expand their current markets.
• Congeneric Mergers: In this type of merger, the companies occupy the same market. The merger creates efficiencies or economies of scale because the companies may use the same raw materials, technology, and research and development (R&D) processes.
• Market Extension Mergers: The companies that are merging may have similar products operating in different markets. The goal for all parties is to expand into new markets.
• Horizontal Mergers: The merging parties are competitors within the same industry. The goal of the merger is to expand market share.
• Vertical Mergers: Vertical mergers occur for supply chain reasons. One company is typically a supplier to the other, and the merger reduces the costs of the final product.

If a merger or takeover is hostile, investors assume that stock prices will trade at a premium. Therefore, in the interests of disclosure, companies seeking a hostile takeover of another company must file form S-4 to provide public notice.

Example of SEC Form S-4

Marriott International (MAR) filed a Form S-4 on Dec. 22, 2015. It described the proposed combination with Starwood Hotel & Resorts Worldwide. The 192-page document, excluding appendices, contains complete details of the proposed transaction, which eventually closed on Sept. 23, 2016.

In addition to the pro-forma figures and valuation numbers of the transaction, the most interesting sections of the filing for investors are the reasons given by each company for the combination, the timeline of the deal, and how and when the deal came together.

The Bottom Line

Public companies in the United States are required to submit regular filings to remain compliant with financial regulators. They must also submit forms whenever there are key changes in their businesses. SEC Form S-4 is completed and filed with the SEC whenever companies undergo a merger or acquisition, including a hostile takeover. It must also be used if a company makes a stock offering, such as the exchange of securities for cash.