different from what might be viewed as material to stockholders, or may have been used for the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the Purchase Agreement are not necessarily characterizations of the actual state of facts about the Company, the Sellers or the Acquired Entities (or any of their respective subsidiaries or affiliates) at the time they were made or otherwise and should only be read in conjunction with the other information that the Company makes publicly available in reports, statements and other documents filed with the U.S. Securities and Exchange Commission (the “SEC”). Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

Debt Commitment Letter

In connection with the execution and delivery of the Purchase Agreement, GYP Holdings III Corp. (the “Borrower”), a Delaware corporation and indirect subsidiary of the Company, entered into a commitment letter, dated April4,2018 (the “Commitment Letter”), with the Commitment Parties, to which the Commitment Parties have agreed to provide (a)an Incremental First Lien Term Facility (as defined therein) to the Borrower in an aggregate principal amount of the lesser of (x)$375 million and (y)an amount that would not, determined as of the Closing Date (as defined therein), after giving effect on a pro forma basis to the incurrence thereof and the other transactions contemplated hereby, cause the First Lien Leverage Ratio (as defined therein) as at the end of the most recently completed fiscal quarter of the Borrower for which financial statements are available to the terms of the First Lien Credit Agreement (as defined therein) to exceed 4.20:1.00 and (b)a Second Lien Term Facility (as defined therein) to the Borrower in an aggregate principal amount of the lesser of (x)$50 million and (y)an amount that would not, determined as of the Closing Date, after giving effect on a pro forma basis to the incurrence thereof and the other transactions contemplated hereby, cause the Secured Leverage Ratio (as defined therein) as at the end of the most recently completed fiscal quarter of the Borrower for which financial statements are available to the terms of the First Lien Credit Agreement to exceed 6.00:1.00, in each case to fund, in part, the Purchase Consideration to be paid in accordance with the terms of the Purchase Agreement in connection with the consummation of the Acquisition. A portion of the Incremental First Lien Term Facility may be allocated to a Canadian-Dollar denominated term loan facility, subject to the terms of the Commitment Letter.

to the Commitment Letter, Barclays and CS have agreed to provide 70% and 30%, respectively, of the aggregate principal amount of the Incremental First Lien Term Facility and the Second Lien Term Facility to the Borrower, and Barclays and CS will act as joint lead arrangers and joint bookrunners with respect to the Incremental First Lien Term Facility and the Second Lien Term Facility, with Barclays having “left” placement with respect to such facilities.

The funding of the debt financing to the Commitment Letter is contingent upon the satisfaction of certain conditions set forth in such Commitment Letter, including, among others, (a)the absence of a Material Adverse Effect, (b)the negotiation and execution of the definitive debt financing agreements contemplated by such Commitment Letter, and (c)the Acquisition being consummated in accordance with the terms of the Purchase Agreement substantially concurrently with the initial funding of the debt financing.

The foregoing description of the Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Commitment Letter, which is attached hereto as Exhibit10.1, and is incorporated herein by reference.

Forward-Looking Statements and Information:

This Current Report on Form8-K includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statements by the Company’s use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” or “should,” or the negative thereof or other

variations thereon or comparable terminology. In particular, statements about the Acquisition in this Current Report on Form8-K are forward-looking statements. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of the Company’s control, that may cause its business, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include, among other things: changes in the prices, supply, and/or demand for products which GMS or the Acquired Entities distribute; general economic and business conditions in the United States and Canada; the activities of competitors; changes in significant operating expenses; changes in the availability of capital and interest rates; adverse weather patterns or conditions; acts of cyber intrusion; variations in the performance of the financial markets, including the credit markets; and other factors described in the “Risk Factors” section in the Company’s Annual Report on Form10-K for the fiscal year ended April30, 2017, and in its other periodic reports filed with the SEC. In addition, numerous factors could cause actual results with respect to the proposed transaction to differ materially from those in the forward-looking statements, including without limitation, the possibility that the expected synergies and cost savings and financial impacts from the proposed transaction will not be realized, or will not be realized within the expected time period; the risk that the GMS and the Acquired Entities businesses will not be integrated successfully; the ability to obtain governmental approvals of the proposed transaction on the proposed terms and schedule contemplated by the parties; disruption from the proposed transaction making it more difficult to maintain business and operational relationships and to accomplish other GMS objectives; the risk of customer attrition; the possibility that the proposed transaction does not close, including, but not limited to, failure to satisfy the closing conditions; and the ability to obtain the debt financing contemplated to fund the cash purchase price for the proposed transaction and the terms of such financing. In addition, the statements in this Current Report on Form8-K are made as of April5, 2018. The Company undertakes no obligation to update any of the forward looking statements made herein, whether as a result of new information, future events, changes in expectation or otherwise. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to April5, 2018.

Item 7.01. Regulation FD Disclosure.

On April5, 2018, the Company issued a press release announcing its entry into the Purchase Agreement. A copy of the press release is furnished as Exhibit99.1 to this Current Report on Form8-K and is incorporated herein by reference. In addition, a copy of the investor presentation dated April5, 2018 prepared by the Company is furnished as Exhibit99.2 to this Current Report on Form8-K and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form8-K, the information in this Item 7.01 of this Current Report on Form8-K, including Exhibit99.1 and Exhibit99.2 attached hereto, shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Financial Statements and Exhibits.

(d)Exhibits.

+ Certain schedules and exhibits to the Purchase Agreement have been omitted to Item 601(b)(2)of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule or exhibit upon request.

*Furnished herewith

EXHIBITINDEX

+ Certain schedules and exhibits to the Purchase Agreement have been omitted to Item 601(b)(2)of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule or exhibit upon request.

*Furnished herewith

GMS Inc. Exhibit
EX-2.1 2 a18-9625_1ex2d1.htm EX-2.1 Exhibit 2.1   SECURITIES PURCHASE AGREEMENT among GMS Inc. (as the Purchaser) TORQUEST PARTNERS FUND III,…
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About GMS INC. (NYSE:GMS)

GMS Inc. is a distributor of wallboard and suspended ceilings systems, or ceilings. The Company provides a product offering of over 20,000 stock keeping units (SKUs) of wallboard, ceilings and complementary interior construction products for interior contractors. It offers steel framing and ancillary products for its customers. Its Wallboard is a building product for interior and exterior walls and ceilings in residential and commercial structures. Its ceilings product line consists of suspended mineral fiber, soft fiber and metal ceiling systems primarily used in offices, hotels, hospitals, retail facilities, schools and a range of other commercial and institutional buildings. Its steel framing product line consists of steel track, studs and various other steel products used to frame the interior walls of a commercial or institutional building. It supplies complementary products, including insulation, ready-mix-joint compound and various other interior construction products.