Item 1.01 Entry into a Material Definitive Agreement.
The information set forth under Item 2.01 of this Current Report on Form 8-K related to the entry into the Investor Rights Agreement (as defined below) and Item 2.03 of this Current Report on Form 8-K related to the entry into the New Credit Facilities (as defined below) is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
The information set forth under Item 2.03 of this Current Report on Form 8-K related to termination of the Prior Term Loan Credit Agreement and the Prior ABL Credit Agreement (each as defined below) is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On
The aggregate cash and stock consideration paid by the Company to the former
Atotech shareholders in the Acquisition was approximately
Atotech will form a separate division of the Company, which the Company will refer to as the Materials Solutions Division.
In connection with the completion of the Acquisition, on
Also in connection with the completion of the Acquisition, as previously
disclosed in that Current Report on Form 8-K filed by the Company with the
The foregoing summary of the transactions contemplated by the Implementation Agreement, including the Investor Rights Agreement and the Lock-Up Agreement, is qualified in its entirety by reference to the Implementation
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Agreement, which is included as Exhibits 2.1, 2.2 and 2.3 to this Current Report on Form 8-K, to the Investor Rights Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and to the Lock-Up Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K, and which are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
New Term Loan Facility and New Revolving Facility
On the Effective Date, in connection with the completion of the Acquisition, the
Company entered into a credit agreement with
Interest Rate and Fees. Borrowings under the New Credit Facilities bear interest at a rate per annum equal to, at the Company's option, any of the following, plus, in each case, an applicable margin: (a) with respect to the USD Tranche A, the USD Tranche B and the New Revolving Facility, (x) a base rate determined by reference to the highest of (1) the federal funds effective rate plus 0.50%, (2) the prime rate quoted in The Wall Street Journal, or (3) a Term SOFR rate (plus an applicable credit spread adjustment) for an interest period of one month, plus 1.00%; and (y) a Term SOFR rate (plus an applicable credit spread adjustment) for the interest period relevant to such borrowing, subject, solely with respect to the USD Tranche B, to a rate floor of 0.50%; and (b) with respect to the Euro Tranche, a EURIBOR rate determined by reference to the costs of funds for Euro deposits for the interest period relevant to such borrowing adjusted for certain additional costs, subject to a EURIBOR rate floor of 0.0%. The USD Tranche A was issued with original issue discount of 0.25% of the principal amount thereof. The USD Tranche B and the Euro Tranche were issued with original issue discount of 2.00% of the principal amount thereof. The applicable margin for borrowings under the USD Tranche A is 1.50% with respect to base rate borrowings and 2.50% with respect to Term SOFR borrowings. The applicable margin for borrowings under the USD Tranche B is 1.75% with respect to base rate borrowings and 2.75% with respect to Term SOFR borrowings. The applicable margin for borrowings under the Euro Tranche is 3.00%. The initial applicable margin for borrowings under the New Revolving Facility is 1.50% with respect to base rate borrowings and 2.50% with respect to Term SOFR borrowings. Commencing with the delivery of financial statements with respect to the first quarter ending after the closing of the New Credit Agreement, the applicable margin for borrowings under the New Revolving Facility is subject to adjustment each fiscal quarter, based on the Company's first lien net leverage ratio during the preceding quarter.
In addition to paying interest on outstanding principal under the New Credit Facilities, the Company is required to pay a commitment fee in respect of the unutilized commitments under the New Revolving Facility. The initial commitment fee is 0.375% per annum. Commencing with the delivery of financial statements with respect to the first quarter ending after the closing of the New Credit Agreement, the commitment fee is subject to downward adjustment based on the Company's first lien net leverage ratio during the preceding quarter. The Company must also pay customary letter of credit fees and agency fees.
Mandatory Prepayments. The New Credit Agreement requires the Company to prepay outstanding term loans, subject to certain exceptions, with:
• 50% (subject to reduction to 25% and 0% based upon the Company's first lien net leverage ratio) of the Company's annual Excess Cash Flow (as defined in the New Credit Agreement); • 100% (subject to a reduction to 0% based upon the Company's first lien net leverage ratio) of the net cash proceeds of certain asset sales and casualty and condemnation events where the proceeds exceed the greater of$202,500,000 and 15% of the EBITDA Grower Amount (as defined in the New Credit Agreement),
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subject to reinvestment rights and certain other exceptions; and
• 100% of the net cash proceeds of any incurrence or issuance of certain
debt, other than debt permitted under the New Credit Agreement. . . .
Item 3.02. Unregistered Sales of
On the Effective Date, and pursuant to the terms and conditions of the
Implementation Agreement, the Company issued an aggregate of 10,748,728 shares
of Company common stock to the former Atotech shareholders. Such shares of
Company common stock were issued in reliance on Section 3(a)(10) of the
Securities Act of 1933, as amended, which exempts from the registration
requirements the issuance of securities which have been approved, after a
hearing upon the substantive and procedural fairness of the terms and conditions
of the relevant transaction, at which all persons to whom it is proposed the
securities will be issued shall have the right to appear, by any court expressly
authorized by law to grant such approval. Under the Implementation Agreement,
Atotech submitted the scheme of arrangement for approval of the Acquisition by
the
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers. Management Change
On the Effective Date, in connection with the completion of the Acquisition and
pursuant to the employment agreement, dated
Appointment of Director
On
Item 8.01 Other Events.
The Company hereby amends and restates in their entirety the risk factors
included under Part I Item 1A of its Annual Report on Form 10-K for the fiscal
year ended
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
The financial statements required by Item 9.01(a) of Form 8-K will be filed by amendment within 71 calendar days after the date upon which this Current Report on Form 8-K must be filed.
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(b) Pro Forma Financial Information
The pro forma financial information required by Item 9.01(b) of Form 8-K will be filed by amendment within 71 calendar days after the date upon which this Current Report on Form 8-K must be filed.
(d) Exhibits Exhibit No. Exhibit 2.1 Implementation Agreement, datedJuly 1, 2021 , by and betweenMKS Instruments, Inc. and Atotech Limited (incorporated herein by reference to the Current Report on Form 8-K filed byMKS Instruments, Inc. onJuly 2, 2021 ) 2.2 Letter Agreement, datedOctober 29, 2021 , by and amongMKS Instruments, Inc. , Atotech Limited andAtotech Manufacturing, Inc. (incorporated herein by reference to the Annual Report on Form 10-K for the fiscal year endedDecember 31, 2021 , filed byMKS Instruments, Inc. onFebruary 28, 2022 ) 2.3 Amendment to Implementation Agreement, datedApril 1, 2022 , by and among Atotech Limited,MKS Instruments, Inc. andAtotech Manufacturing, Inc. (incorporated herein by reference to the Current Report on Form 8-K filed byMKS Instruments, Inc. onApril 1, 2022 ) 10.1 Investor Rights Agreement, datedAugust 17, 2022 , by and amongMKS Instruments, Inc. and the Carlyle Stockholders 10.2 Lock-Up Agreement, between the Company and the Carlyle Shareholders, dated as ofJuly 1, 2021 (incorporated herein by reference to the Current Report on Form 8-K filed byMKS Instruments, Inc. onJuly 2, 2021 ) 10.3 Credit Agreement, dated as ofAugust 17, 2022 , by and amongMKS Instruments, Inc. , the lenders and letter of credit issuers party thereto andJPMorgan Chase Bank, N.A ., as administrative agent and collateral agent 99.1 Amended and Restated Risk Factors ofMKS Instruments, Inc. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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