Item 1.01. Entry Into a Material Definitive Agreement
Acquisition of
On
Viking Topco is the parent corporation of Bacharach, which is engaged in the
manufacture and supply of safety equipment, including leak and gas detection
equipment and technology. Headquartered in
The Merger Agreement provides for MSA Advanced Detection to acquire Bacharach
for a purchase price of approximately
The closing of the transaction is subject to certain customary closing conditions, including (i) the absence of any injunction or other legal restraint preventing or making illegal the closing of the transaction, (ii) any waiting period applicable to the transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 having expired or been terminated, (iii) approval of the stockholders of Viking Topco, and (iv) the accuracy of each party's representations and warranties and compliance by each party with its covenants under the Merger Agreement, subject to certain materiality qualifications and exceptions. Certain of Viking Topco's stockholders and employees have also agreed to enter into restrictive covenant agreements with terms of 18 to 36 months.
At the closing, MSA Advanced Detection and Laurel Solutions will enter into an
escrow agreement with
The foregoing description of the transaction to be consummated pursuant to the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to specific terms and conditions of the Merger Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Support Agreement
Concurrently with the execution of the Merger Agreement, certain stockholders of Viking Topco (each, a "Supporting Stockholder") entered into a support agreement ("Support Agreement") with MSA Advanced Detection and Viking Topco with respect to all shares of Viking Topco stock beneficially owned by such Supporting Stockholders. The shares of Viking Topco stock subject to the Support Agreement constituted approximately 94% of the outstanding voting shares of Viking Topco stock. On the terms and subject to the conditions set forth in the Support Agreement, each Supporting Stockholder agreed to vote (or deliver a written consent) (i) in favor of adopting the Merger Agreement and the transactions contemplated thereby at any meeting of Viking Topco's stockholders, and (ii) against any proposal that conflicts, impedes or interferes with the Merger Agreement or the transactions contemplated thereby, including any Company Transaction (as defined in the Merger Agreement).
The foregoing description of the Support Agreement does not purport to be complete and is qualified in its entirety by the full text of the Support Agreement, a copy of which is filed as Exhibit 10.2 hereto and is incorporated by reference herein.
Credit Agreement
On
Amendment to Note Purchase Agreement
On
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
On
Under the Credit Agreement, funds may be borrowed on an unsecured, revolving
credit basis in a maximum outstanding amount not to exceed
Borrowings under the Credit Agreement may bear interest at a rate based upon either a "Base Rate" or a "LIBOR Rate," plus an adder based upon MSA's net leverage ratio (as defined in the Credit Agreement):
• The "Base Rate" is calculated on a daily basis as the highest of a prime rate, an overnight bank funding rate plus 0.5% per annum, or the reserve-adjusted daily published London Interbank Offered Rate for a one-month interest period plus 1%. The Base Rate cannot be less than zero. The adder ranges from zero to 0.750%. • The "LIBOR Rate" is calculated as provided in the Credit Agreement. The adder ranges from 0.875% to 1.750%.
Interest based upon the Base Rate is payable quarterly on the first day of January, April, July and October. Interest based upon the LIBOR Rate is payable on the last day of the selected interest period, unless that interest period exceeds three months, in which case it is also payable on the 90th day of the selected interest period. The Credit Agreement provides for a transition from LIBOR rates. The Credit Agreement also provides for an adjustment of the adders used in the interest rate calculation and the commitment fee calculation based upon the achievement by MSA of specified diversity and safety targets. The adjustment can decrease or increase the adders by 2.5 basis points, in the case of the interest rate calculation, and 5 basis points, in the case of the commitment fee calculation.
The Credit Agreement contains customary representations and warranties,
covenants and events of default substantially the same as the prior credit
agreement. The Credit Agreement requires MSA to comply with specified financial
covenants, including a requirement to maintain a minimum fixed charges coverage
ratio of not less than 1.50 to 1.00 and a net leverage ratio not to exceed 3.50
to 1.00 (or not to exceed 4.00 to 1.00 during the three calendar quarters
including, and following, certain specified acquisitions); in each case
calculated on the basis of the trailing four fiscal quarters. The net leverage
ratio is defined as consolidated indebtedness less unencumbered cash exceeding
• incur additional indebtedness or issue guarantees; • create or incur liens; • make loans and investments; • make acquisitions; • transfer or sell assets; • enter into transactions with affiliated parties; • make changes in its or its subsidiaries' organizational documents that are materially adverse to the lenders; and • modify the nature of MSA's or its subsidiaries' business,
subject to certain exceptions and limitations, including carve-outs and baskets, set forth in the Credit Agreement. The Credit Agreement also contains certain customary events of default, including defaults triggered by a change of control or defaults on other debt. Under the Credit Agreement, a change in control occurs if a person or group of persons acting in concert acquires beneficial ownership of 50% or more of the outstanding voting stock of MSA.
MSA intends to file copies of the Credit Agreement and the Note Agreement Amendment as exhibits to an amendment to this Current Report on Form 8-K.
Item 8.01. Other Events
On
-2-
--------------------------------------------------------------------------------
Item 9.01. Financial Statements and Exhibits
(d) Exhibits No. Description 10.1 Agreement and Plan of Merger, datedMay 23, 2021 , by and amongMSA Advanced Detection, LLC , aPennsylvania limited liability company,Cardinal Merger Subsidiary, Inc. , aDelaware corporation,MSA Safety Incorporated , aPennsylvania corporation,Viking Topco, Inc. , aDelaware corporation, andLaurel Solutions Holdings LLC , aDelaware limited liability company, solely in its capacity as a representative of the stockholders ofViking Topco, Inc. * 10.2 Form of Support Agreement 99.1 Press release datedMay 24, 2021 . 104 Cover Page Inline Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document included as Exhibit 101 * The exhibits and schedules to this agreement have been omitted. A copy of the omitted exhibits and schedules will be provided to theSecurities and Exchange Commission upon request. -3-
--------------------------------------------------------------------------------
© Edgar Online, source