VALHI, INC. (NASDAQ:VHI) Files An 8-K Entry into a Material Definitive Agreement

ME Staff
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VALHI, INC. (NASDAQ:VHI) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement.


As previously reported, on November 18, 2015, Andrews County
Holdings, Inc. (“ACH”), a subsidiary of the registrant, entered
into a Purchase Agreement (as previously amended and as
previously reported, the “Purchase Agreement”) with Rockwell
Holdco, Inc. (“Rockwell”), for the sale of Waste Control
Specialists LLC (“WCS”), a subsidiary of ACH, to Rockwell.
Rockwell is the parent company of EnergySolutions, Inc., and
Rockwell is owned by Energy Capital Partners, a private equity
firm focused on investing in North America’s energy
infrastructure. In anticipation of the Antitrust Action (as
hereinafter defined) described in Item 8.01 below, effective
November 14, 2016, ACH and Rockwell entered into a Fourth
Amendment to the Purchase Agreement (the “Fourth Amendment”).
Terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Purchase Agreement, as amended
through the Fourth Amendment. to the Fourth Amendment, among
other things:

the deadline for the closing of the transactions
contemplated by the Purchase Agreement has been extended
to July 31, 2017;

Rockwell has agreed to affirmatively contest and resist
any Action initiated by the Federal Trade Commission or
the Antitrust Division of the Department of Justice on
behalf of the United States (the “DOJ”) challenging
under Antitrust Laws the transactions contemplated by the
Purchase Agreement (“Antitrust Action”);

if judgment in any Antitrust Action is entered in favor
of the United States by a federal district court, or by a
federal court of appeals in the event the federal
district court rules against issuance of the United
States’ requested preliminary injunction, then (i)
either Party shall be entitled to immediately terminate
the Purchase Agreement under specified terms and
conditions, and (ii) the registrant agreed to reimburse
Rockwell for 50% of third-party fees and expenses
incurred by Rockwell from and after November 14, 2016
relating to the defense of any Antitrust Action which may
be initiated (including any appeal), subject to a
specified maximum reimbursement of $6.0 million plus 50%
of such fees and expenses associated with any such appeal
in excess of such $6.0 million cap;

in the event an Antitrust Action is not initiated, or in
the event an Antitrust Action is initiated but is
subsequently settled, dismissed or otherwise resolved in
accordance with the terms of the Purchase Agreement and
in a manner that permits the transactions contemplated by
the Purchase Agreement to proceed to a Closing, the
parties shall continue to honor their obligations under
the Purchase Agreement in order to effect a Closing as
promptly as practical after notification by the
government that no such Antitrust Action will be
initiated (or as promptly as practical after any such
settlement, dismissal or resolution);

in the event any Antitrust Action is initiated, then the
Aggregate Consideration shall consist solely of the Base
Cash Purchase Price and the Series A Shares shall not be
included as part of the Aggregate Consideration;

the Parties agreed to execute a general mutual release
containing specified terms and conditions, ACH waived,
and agreed it would not assert, raise or make, any claim
under the Purchase Agreement or otherwise based upon
Rockwell’s defense of any Antitrust Action, and the
Parties waived, and agreed they would not assert, raise
or make, any claim previously asserted, or which could
have been asserted, in the Lawsuit or the Arbitration
described in the Venue Agreement; and

Rockwell agreed to deposit $10 million cash within 5
Business Days after November 14, 2016 in an escrow
account (the “Escrow Account”) with an escrow agent
reasonably acceptable to the parties. In the event a
Closing occurs under the Purchase Agreement, the Escrow
Amount will be released to Rockwell. In the event of a
permitted termination of the Purchase Agreement
(including to the terms of the Fourth Amendment), the
Escrow Amount shall be released to WCS (and receipt of
such Escrow Amount following such permitted termination
of the Purchase Agreement would replace, and Rockwell
would not be obligated to pay to ACH, the $35 million
Termination Fee provided for in the Purchase Agreement),
the Parties will execute a general mutual release
containing specified terms and conditions, and ACH and
its Affiliates agreed not to make any Claim for, any
matter under, related to or arising out of, the Purchase
Agreement and related agreements or the transactions
contemplated thereby. Rockwell continues to be obligated
to pay to ACH the $35 million Termination Fee provided
for in the Purchase Agreement only in the event that all
conditions to Close under the Purchase Agreement have
been satisfied (including receipt of U.S. anti-trust
approval), but such Closing does not occur due to a
breach by Rockwell of its obligations under the Purchase
Agreement.

All other terms and conditions of the Purchase Agreement remain
unchanged. A copy of the Fourth Amendment is attached as Exhibit
2.1 to this report and is incorporated herein by reference. The
foregoing description of the Fourth Amendment does not purport to
be complete and is qualified in its entirety by reference to the
Fourth Amendment.
Item 8.01. Other Events.

On November 16, 2016, the DOJ filed an Antitrust Action in the
U.S. federal district court for the District of Delaware >


Forward-Looking Statements

The statements in this Current Report relating to matters that
are not historical facts are forward-looking statements that
represent management’s beliefs and assumptions based on
currently available information. Although the registrant believes
the expectations reflected in such forward-looking statements are
reasonable, it cannot give any assurances that these expectations
will be correct. Such statements by their nature involve
substantial risks and uncertainties that could significantly
impact expected results, and actual future results could differ
materially from those predicted. While it is not possible to
identify all factors, the registrant continues to face many risks
and uncertainties. Among the factors that could cause our actual
future results to differ materially include, but are not limited
to, the following:
Future supply and demand for our products;
The extent of the dependence of certain of our businesses
on certain market sectors;
The cyclicality of certain of our businesses (such as
Kronos’ titanium dioxide pigment (“TiO“) operations);
Customer and producer inventory levels;
Unexpected or earlier-than-expected industry capacity
expansion (such as the TiO industry);
Changes in raw material and other operating costs (such
as energy, ore, zinc, brass and steel costs) and our
ability to pass those costs on to our customers or offset
them with reductions in other operating costs;
Changes in the availability of raw materials (such as
ore);
General global economic and political conditions (such as
changes in the level of gross domestic product in various
regions of the world and the impact of such changes on
demand for, among other things, TiO2 and component
products);
Competitive products and prices and substitute products,
including increased competition from low-cost
manufacturing sources (such as China);
Possible disruption of our business or increases in the
cost of doing business resulting from terrorist
activities or global conflicts;
Customer and competitor strategies;
Potential difficulties in integrating future
acquisitions;
Potential difficulties in upgrading or implementing new
manufacturing and accounting software systems;
Potential consolidation of our competitors;
Potential consolidation of our customers;
The impact of pricing and production decisions;
Competitive technology positions;
The introduction of trade barriers;
The ability of our subsidiaries to pay us dividends;
The impact of current or future government regulations
(including employee healthcare benefit related
regulations);
Uncertainties associated with new product development and
the development of new product features;
Fluctuations in currency exchange rates (such as changes
in the exchange rate between the U.S. dollar and each of
the euro, the Norwegian krone, and the Canadian dollar)
or possible disruptions to our business resulting from
potential instability resulting from uncertainties
associated with the euro;
Operating interruptions (including, but not limited to,
labor disputes, leaks, natural disasters, fires,
explosions, unscheduled or unplanned downtime and
transportation interruptions);
Decisions to sell assets other than in the ordinary
course of business;
The timing and amounts of insurance recoveries;
Our ability to renew, amend, refinance or establish
credit facilities;
Our ability to maintain sufficient liquidity;
The ultimate outcome of income tax audits, tax settlement
initiatives or other tax matters;
Our ultimate ability to utilize income tax attributes or
changes in income tax rates related to such attributes,
the benefits of which may not presently have been
recognized under the more-likely-than-not recognition
criteria (such as Kronos’ ability to utilize its German
and Belgium net operating loss carryforwards);
Environmental matters (such as those requiring compliance
with emission and discharge standards for existing and
new facilities, or new developments regarding
environmental remediation at sites related to our former
operations);
Government laws and regulations and possible changes
therein (such as changes in government regulations which
might impose various obligations on former manufacturers
of lead pigment and lead-based paint, including NL, with
respect to asserted health concerns associated with the
use of such products);
The ultimate resolution of pending litigation (such as
NL’s lead pigment litigation, environmental and other
litigation and Kronos’ class action litigation);
Our ability to comply with covenants contained in our
revolving bank credit facilities;
Our ability to complete and comply with the conditions of
our licenses and permits;
Our ability to successfully defend against
currently-pending or possible future challenge to WCS’
operating licenses and permits;
Unexpected delays in the operational start-up of shipping
containers procured by WCS;
Changes in real estate values and construction costs in
Henderson, Nevada;
Water levels in Lake Mead; and
Possible future litigation.

Should one or more of these risks materialize (or the
consequences of such development worsen), or should the
underlying assumptions prove incorrect, actual results could
differ materially from those currently forecasted or expected.
The registrant disclaims any intention or obligation to update or
revise any forward-looking statement whether as a result of
changes in information, future events or otherwise.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits

Exhibit

Number

Description

2.1*

Fourth amendment to Purchase Agreement by and between
Rockwell Holdco, Inc., as Purchaser, and Andrews County
Holdings, Inc., as Seller, dated as of November 14, 2016

* to Item 601(b)(2) of Regulation S-K, the registrant agrees to
furnish supplementally a copy of any omitted exhibit or schedule
to the SEC upon request.

to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

VALHI, INC.


Date: November 16, 2016

By: /s/Gregory M. Swalwell

Gregory M. Swalwell

Executive Vice President, Chief Financial Officer

and Chief Accounting Officer

INDEX TO EXHIBITS


Exhibit

Number


Description


2.1*


Fourth amendment to Purchase Agreement by and between
Rockwell Holdco, Inc., as Purchaser, and Andrews County
Holdings, Inc., as Seller, dated as of November 14, 2016

.

*


About VALHI, INC. (NASDAQ:VHI)