ENPRO INDUSTRIES, INC. (NYSE:NPO) Files An 8-K Entry into a Material Definitive Agreement

ENPRO INDUSTRIES, INC. (NYSE:NPO) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Definitive Material Agreement.

On July 19, 2019, EnPro Industries, Inc. (the “Company”) entered into a Securities Purchase Agreement dated as of July 19, 2019 (the “ Purchase Agreement”) to acquire all of the equity securities of LeanTeq LLC and LeanTeq Co., Ltd. (collectively, the “Acquired Entities”), a Taiwan-based provider of refurbishment services for critical components and assemblies used in state-of-the-art semiconductor equipment (the “Acquisition”), with the owners of the Acquired Entities (the “Sellers”) and a representative of the Sellers. The Acquisition consideration is $305 million, subject to a customary working capital adjustment and reduction for net debt. The Acquisition is subject to customary closing conditions and a Taiwan Investment Commission approval and is anticipated to close in the fourth quarter of 2019.

The Purchase Agreement contains customary representations, warranties and covenants related to the Acquired Entities, the Sellers, and the Company. In addition to customary termination provisions, it provides for a $12.2 million termination fee payable by the Company if the Company fails to consummate the transaction as a result of a failure of its acquisition financing.

The parties have agreed to indemnification obligations for losses arising from breaches of their respective representations, warranties and covenants in the Purchase Agreement and other pre-closing liabilities, subject to certain limitations. The Sellers will also enter into non-competition and non-solicitation agreements in connection with the Acquisition.

The Purchase Agreement provides that the Company will establish cash retention programs to be allocated among key managers and other employees of the Acquired Entities for retention payments post-Closing.

The Purchase Agreement provides that two Sellers who are managers of the Acquired Entities (the “Seller Managers”) will apply approximately 10% of the total transaction consideration to purchase equity interests of the Company’s subsidiary (the “Acquisition Subsidiary”) acquiring the Acquired Entities to an agreement (the “LLC Agreement”) to be entered into upon the closing of the Acquisition (the “Closing”). The Seller Managers will have certain governance and information rights and be subject to transfer restrictions. Each Seller Manager will also have the right to sell to the Company, and the Company will have the right to purchase from each Seller Manager, the Seller Manager’s equity interests in the Acquisition Subsidiary, following the third anniversary of the Closing, a change-of-control of the Acquisition Subsidiary or the Company, dissolution of the Acquisition Subsidiary, termination of employment, death or disability of the Seller Manager, and certain other circumstances such as a dispute regarding the Company’s performance of the LLC Agreement. The consideration payable in two installments in the purchase and sale arrangements is generally based upon a multiple of twelve-month adjusted EBITDA based upon certain financial metrics of the Acquisition Subsidiary, plus cash and less indebtedness of the Acquisition Subsidiary prior to the relevant installment payment, subject to certain adjustments dependent upon the circumstances of the purchase and sale.

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The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Purchase Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. The representations, warranties and covenants set forth in the Purchase Agreement have been made only for the purposes of the Purchase Agreement and solely for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts. In addition, such representations and warranties were made only as of the dates specified in the Purchase Agreement and information regarding the subject matter thereof may change after the date of the Purchase Agreement. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding its terms and not to provide investors with any other factual information regarding the Company, the Acquired Entities or their respective businesses as of the date of the Purchase Agreement or as of any other date. Investors and security holders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were made only as of a specific date and are modified in important part by the underlying disclosure schedules. In addition, certain representations and warranties may be subject to a contractual standard of materiality different from what might be viewed as material to investors in the Company’s securities.

Item 7.01 Regulation FD Disclosure.

On July 22, 2019, the Company issued a press release, which is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished in this Item 7.01 and Exhibit 99.1 are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits


EX-2.1 2 d754501dex21.htm EX-2.1 EX-2.1 EXHIBIT 2.1       SECURITIES PURCHASE AGREEMENT by and among ENPRO INDUSTRIES,…
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EnPro Industries, Inc. (EnPro) is engaged in the designing, developing, manufacturing, and marketing engineered industrial products. The Company operates through three segments: Sealing Products, Engineered Products and Power Systems. Its Sealing Products segment designs, manufactures and sells sealing products, including metallic, non-metallic and composite material gaskets, resilient metal seals, elastomeric seals, hydraulic components, expansion joints and casing end seals. Its Engineered Products segment includes its bearings, aluminum blocks for hydraulic applications and reciprocating compressor components. Its Engineered Products segment includes operations that design, manufacture and sell self-lubricating, non-rolling, metal-polymer, and solid polymer and filament wound bearing products. Its Power Systems segment designs, manufactures, sells and services heavy-duty, medium-speed diesel, natural gas and dual fuel reciprocating engines.

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