Fox Factory Holding Corp. (NASDAQ:FOXF) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01Entry into a Material Definitive Agreement

As previously announced on a Form 8-K filed by Fox Factory Holding Corp. (the “Company”) on December 1, 2017, on November 30, 2017, the Company, through its subsidiaries FF US Acquisition Corp. (“Buyer”) and FF US Holding Corp. (“Buyer Parent”), entered into an Asset Purchase and Contribution Agreement (the “Purchase Agreement”) with Flagship, Inc., d/b/a Tuscany (“Seller”), and Michael Graber and Jeff Burttschell (“Owners”). Seller is engaged in the business of designing and manufacturing personal-use specialty vehicles based on OEM vehicle chassis (the “Business”). to the Purchase Agreement Buyer, a wholly owned subsidiary of Buyer Parent, acquired substantially all of the assets and assumed certain liabilities of Seller in return for the gross consideration $66.25 million, payable as a mix of (i) $53.35 million in cash and (ii) and the issuance by Buyer Parent of $12.9 million worth of Buyer Parent common stock, representing 20% of the issued common stock of Buyer Parent (the “Transaction”). All terms not defined herein shall have the meaning ascribed to them in the Purchase Agreement, attached hereto as Exhibit 10.1.

The Purchase Agreement contains customary representations, warranties, covenants and agreements of the parties. The $53.35 million cash portion of the purchase price was reduced by the payment of certain debt of Seller, funding indemnification escrows, the payment of a portion of the premium for a representation and warranty insurance policy, and is subject to a working capital adjustment. The jointly purchased representation and warranty insurance policy contains customary terms and conditions to supplement the escrow funds with respect to breaches of Seller’s representations and warranties.

As a result of the Transaction, the Company, through its subsidiaries, owns 80% of Buyer Parent, and thus 80% of the Business. Buyer Parent and Fox Factory, Inc. have the ability to purchase the remaining 20% of Buyer Parent from Seller following the second anniversary date of the Transaction through the seventh anniversary date of the Transaction. In addition, following the seventh anniversary date of the Transaction, for 180 days Seller can require Buyer Parent or Fox Factory, Inc. to purchase the remaining 20% of Buyer Parent subject to the terms of the Credit Agreement, defined below.

Additionally, on November 30, 2017, the Company amended the Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of May 11, 2016, by and among the Company, Fox Factory, Inc. and ST USA Holding Corp., the lenders party thereto, and SunTrust Bank, as Administrative Agent, as previously amended (the “Credit Agreement”), by entering into the Third Amendment to Second Amended and Restated Revolving Credit and Term Loan Agreement by and among the Company, Fox Factory, Inc. and ST USA Holding Corp., as borrowers, RFE Holding (US) Corp., FF US Holding LLC, Buyer and Buyer Parent, as guarantors, the lenders party thereto, and SunTrust Bank, as Administrative Agent (the “Amendment”). The Amendment served to modify certain negative covenants contained in the Credit Agreement to permit the Transaction, including, but not limited to, allowing for: (i) the issuance of shares by Buyer Parent to Seller in connection with the Transaction, (ii) certain provisions contained in the Stockholders’ Agreement entered into by and among Buyer Parent, Seller and Fox Factory, Inc., dated November 30, 2017, and (iii) outside financing for the acquired Business.

The foregoing descriptions of the Agreement and the Amendment do not purport to be complete and are qualified in their entirety by reference to the Agreement and Amendment as attached to this Current Report on Form 8-K as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference.

Section 2 Financial Information

Item 2.01 Completion of Acquisition or Disposition of Assets

The information included or incorporated by reference in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01 of this Current Report on Form 8-K.

Section 9Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibits are filed herewith:

FOX FACTORY HOLDING CORP Exhibit
EX-10.1 2 ex101tuscanyapa.htm EXHIBIT 10.1 Exhibit Execution CopyASSET PURCHASE AND CONTRIBUTION AGREEMENTby and amongFF US Acquisition Corp.,…
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About Fox Factory Holding Corp. (NASDAQ:FOXF)

Fox Factory Holding Corp. designs, engineers, manufactures and markets performance ride dynamics products for customers across the world. The Company’s brand ride dynamics products are used primarily on bicycles (bikes), side-by-side vehicles (Side-by-Sides), on-road vehicles with off-road capabilities, off-road vehicles and trucks, all-terrain vehicles (ATVs), snowmobiles, specialty vehicles and applications, and motorcycles. The Company’s brands include FOX, FOX RACING SHOX and RACE FACE. The Company offers front fork and rear suspension products designed for cross-country, trail, all-mountain, free-ride and downhill riding primarily for the mountain bike market. Its mountain bike products are sold in various series, including Performance series, Performance Elite series and Factory series. It also offers suspension systems. Its suspension component products in the powered vehicle category range from two inch aluminum bolt-on shocks to its position sensitive internal bypass shocks.