Item 1.01 Entry into a Material Definitive Agreement.
On March 17, 2022, Brown & Brown, Inc. (the "Company") completed the issuance
and sale of $600,000,000 aggregate principal amount of the Company's 4.200%
Senior Notes due 2032 (the "2032 Notes") and $600,000,000 aggregate principal
amount of the Company's 4.950% Senior Notes due 2052 (the "2052 Notes," and
together with the 2032 Notes, the "Notes"). The net proceeds to the Company from
the sale of the Notes, after deducting underwriting discounts and estimated
offering expenses, were approximately $1,178.2 million.
The Notes were offered and sold under the Company's Automatic Shelf Registration
Statement on Form S-3 (Registration No. 333-248587) filed with the Securities
and Exchange Commission (the "SEC") on September 3, 2020 (the "Registration
Statement"). In connection with the issuance and sale of the Notes, the Company
entered into an Underwriting Agreement, dated as of March 14, 2022, with J.P.
Morgan Securities LLC, BofA Securities, Inc., BMO Capital Markets Corp. and
Truist Securities, Inc., as representatives of the several underwriters named
therein, which was filed as an exhibit to the Company's Current Report on Form
8-K filed with the SEC on March 15, 2022.
The Notes were issued pursuant to that certain Indenture, dated as of September
18, 2014, between the Company and U.S. Bank Trust Company, National Association
(as successor to U.S. Bank National Association), as trustee (the "Base
Indenture"), as supplemented by the Fourth Supplemental Indenture, dated March
17, 2022 (the "Supplemental Indenture," and together with the Base Indenture,
the "Indenture"). The Supplemental Indenture is filed as Exhibit 4.2 to this
Current Report on Form 8-K and is incorporated by reference herein.
Information concerning the Notes and related matters is set forth in the
Registration Statement, including the Company's Prospectus and Prospectus
Supplement, which Prospectus Supplement was filed with the SEC on March 15,
2022.
The 2032 Notes bear interest at the rate of 4.200% per year and will mature on
March 17, 2032. Interest on the 2032 Notes will be payable semi-annually in
arrears on March 17 and September 17 of each year, commencing on September 17,
2022. The 2052 Notes bear interest at the rate of 4.950% per year and will
mature on March 17, 2052. Interest on the 2052 Notes will be payable
semi-annually in arrears on March 17 and September 17 of each year, commencing
on September 17, 2022. The Notes are senior unsecured obligations of the Company
and will rank equal in right of payment to all of the Company's existing and
future senior unsecured indebtedness. The Company may redeem the Notes in whole
or in part at any time and from time to time, at the "make whole" redemption
prices specified in the Prospectus Supplement for the Notes being redeemed, plus
accrued and unpaid interest thereon to but excluding the redemption date. If we
do not consummate the acquisition of GRP (Jersey) Holdco Limited and its
businesses (the "GRP Acquisition") on or prior to December 31, 2022 or, if prior
to such date, we notify the trustee in writing that the majority share purchase
agreement relating to the GRP Acquisition ("GRP Acquisition Agreement") is
terminated, then, in either case, we must redeem all of the 2032 Notes at a
redemption price equal to 101% of the principal amount of the notes, plus
accrued and unpaid interest to, but not including, the special mandatory
redemption date. The 2052 Notes are not subject to the special mandatory
redemption provision and will remain outstanding even if the GRP Acquisition is
not consummated on or prior to December 31, 2022. The form of note for the 2032
Notes and the 2052 Notes is filed as Exhibit 4.3 and 4.4, respectively, to this
Current Report on Form 8-K and is incorporated by reference herein. The Company
intends to use the net proceeds from the offering of the Notes, together with
borrowings under its revolving credit facility, cash on hand and other
borrowings, to fund the cash consideration and other amounts payable under the
GRP Acquisition Agreement and to pay fees and expenses associated with the
foregoing. If the GRP Acquisition is not consummated on or prior to December 31,
2022, the Company expects to use the net proceeds from the sale of the 2052
Notes for general corporate purposes.
The Indenture includes certain restrictive covenants, including covenants that
limit the ability of the Company and certain of its subsidiaries to, among other
things, incur certain secured debt and consolidate, merge, or transfer
substantially all of the Company's assets to another entity. The covenants are
subject to a number of important exceptions and qualifications set forth in the
Indenture. The Indenture also contains a covenant regarding the repurchase by
the Company of the Notes upon a "change of control triggering event."
The foregoing description of the Indenture and the Notes is qualified in its
entirety by their respective terms. The Base Indenture, the Supplemental
Indenture and the forms of Notes are filed as exhibits to this Current Report on
Form 8-K and are incorporated by reference herein.
In connection with the issuance of the Notes, Holland & Knight LLP, counsel to
the Company, delivered an opinion to the Company, dated March 17, 2022,
regarding the legality of the Notes upon issuance and sale thereof. A copy of
the opinion is filed as Exhibit 5.1 to this Current Report on Form 8-K and is
incorporated by reference into the Registration Statement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
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.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed herewith:
Exhibit No. Description of Exhibit
4.1 Indenture, dated as of September 18, 2014, between Brown
& Brown, Inc. and U.S. Bank Trust Company, National
Association (as successor to U.S. Bank National
Association) (incorporated by reference to Exhibit 4.1 to
Form 8-K filed on September 18, 2014).
4.2 Fourth Supplemental Indenture, dated as of March 17,
2022, between Brown & Brown, Inc. and U.S. Bank Trust
Company, National Association (as successor to U.S. Bank
National Association).
4.3 Form of Brown & Brown, Inc.'s 4.200% Notes due 2032.
4.4 Form of Brown & Brown, Inc.'s 4.950% Notes due 2052.
5.1 Opinion of Holland & Knight LLP.
23.1 Consent of Holland & Knight LLP (included as part of
Exhibit 5.1).
104 Cover Page Interactive Data File (formatted as inline
XBRL).
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