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Editor’s note: We attempted to translate the legalese of this document as best we could. Thor Industries also released a plain English press release that can be found in this article.
ELKHART — Thor Industries and Tyr Holdings GmbH and Co. AG, a wholly owned subsidiary of the company, today completed a sale and purchase agreement with the shareholders of Erwin Hymer Group SE (EHG).
Thor Industries acquired all of the issued and outstanding shares of capital stock of EHG, a privately held international company and manufacturer of recreation vehicles in Europe and other locations.
In connection with the closing, the parties entered into an amendment to the purchase agreement to reflect the exclusion of EHG’s North American operations from the business operations acquired via the transaction.
Among other revisions to the purchase agreement, the amendment:
- Documented the fact that EHG sold and transferred the North American operations to be excluded from the transaction prior to the closing.
- Reduced the cash purchase price paid by the company by €170 million (approximately $194 million at the exchange rate as of Jan. 31.
- Provided that approximately €180 million (approximately $205 million) of the cash consideration paid by the company would be contributed by sellers to pay down debt of EHG that would otherwise have been assumed in the transaction.
- Deferred the company’s obligation to register the resale of the company’s common stock issued to the sellers as consideration in the transaction with the U.S. Securities and Exchange Commission under certain circumstances.
At the closing, Thor Industries paid cash consideration of approximately €1.5 billion (approximately $1.7 billion) and issued 2,256,492 shares of the company’s common stock to the sellers.
Thor Industries also assumed debt of EHG and its affiliates, of approximately €315 million (approximately $359 million), a portion of which will be refinanced as of closing.
As previously disclosed, the transaction will generally be treated as having an effective date of May 31, 2018, for tax, economic, and other purposes.
Thor Industries also entered into several other agreements as a result of the sale:
- A term loan credit agreement in which Thor Industries borrowed money from several undisclosed lenders and JPMorgan Chase Bank, which acts as administrative agent of the agreement.
- An asset-based loan (ABL) credit agreement.
Subject to certain exceptions, the obligations under each of the credit agreements are, or will be, guaranteed by each of the company’s existing and future, direct or indirect, domestic subsidiaries.
Additionally, effective as of the closing of the transaction and subject to certain exceptions and limitations:
Certain subsidies of Erwin Hymer Group (the German borrowers) will guarantee the obligations of each other German borrower under the ABL credit agreement.
A subsidy of Erwin Hymer Group (the UK borrower) will guarantee the obligations of each of the German borrowers under the ABL credit agreement.
Erwin Hymer Group and certain other non-U.S. subsidiaries of the company will guarantee the obligations of each of the German borrowers and the UK borrower under the ABL Credit Agreement.
The obligations of the borrowers under each credit agreement are secured by liens on substantially all of the assets of the company and each of its domestic subsidiaries that are guarantors under the credit agreements.
The obligations of the UK borrower and the German borrowers under the ABL credit agreement will additionally be secured by liens on substantially all of the assets of the non-U.S. subsidiaries of the company that guarantee their respective obligations under the ABL credit agreement.
Subject to earlier termination, the term loan credit agreement matures Feb. 1, 2026, and the ABL credit agreement terminates Feb. 1, 2024.
In connection with the closing of the transaction, Thor Industries borrowed an aggregate amount of approximately EUR 617.7 million, under a Euro denominated term loan, and approximately $1.386 billion, under a United States dollar denominated term loan pursuant to the term loan credit agreement.
Thor Industries also borrowed $100 million under the ABL credit agreement in order to provide funding for, among other things, the cash consideration to be paid to the EHG shareholders, the refinancing of specified existing EHG indebtedness, the refinancing of existing indebtedness of the company, and to pay fees and expenses related to the transaction.
The company may, at its option, prepay any borrowings under the term loan credit agreement, in whole or in part, at any time and from time to time without premium or penalty, except in certain circumstances. The circumstances were not disclosed in the release
Pursuant to the term loan credit agreement, Thor Industries is required to repay the aggregate outstanding principal amount of the borrowings in quarterly installments on the first day of each August, November, February and May. The payments begin May 1, 2019, and end with the last such day to occur prior to the maturity date.
The payments, in an aggregate amount for each such date equal to the aggregate principal amount of the initial loan amount (as such amount shall be adjusted pursuant to the prepayment provisions of the term loan credit agreement) multiplied by 0.25%. Thor Industries did not elaborate on that payment provision.
In addition, Thor Industries must make mandatory prepayments of principal under the term loan credit agreement upon the occurrence of certain specified events, including certain asset sales, debt issuances and receipt of annual cash flows in excess of certain amounts.
Any remaining outstanding principal balance under the term loan credit agreement is repayable on the maturity date. Amounts repaid or prepaid by the company with respect to the loans under the term loan credit agreement cannot be reborrowed.
Thor Industries may add one or more incremental term loan facilities to the term loan credit agreement, subject to obtaining commitments from any participating lenders and certain other conditions. Under the term loan credit agreement, loans generally may bear interest based on EURIBOR, LIBOR or an annual base rate, as applicable, plus, in each case, an applicable margin.
The revolving credit facility under the ABL credit agreement has total commitments of $750 million. A portion of the ABL credit agreement of up to $75 million is available for the issuance of letters of credit. A portion of the ABL credit agreement of up to $75 million is available for swingline loans.
Thor Industries may also increase commitments under the ABL credit agreement in an aggregate principal amount of up to $150 million by obtaining additional commitments from lenders, subject to obtaining commitments from any participating lenders and certain other conditions.
Borrowings by the German borrowers and the UK borrower are also subject to an applicable sublimit.
SOURCE: Thor Industries filing with the Securities and Exchange Commission