John Bean Technologies Corporation (NYSE:JBT) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On June 19, 2018, each of John Bean Technologies Corporation (the “Company”) and John Bean Technologies Europe B.V. (the “Dutch Borrower” and together with the Company, the “Borrowers”) entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto. The Credit Agreement provides for a $1 billion revolving credit facility, which matures on June 19, 2023, with a sublimit of $400 million on borrowings by the Dutch Borrower. In addition, the Company may cause the commitments to increase (by way of additional revolving loan capacity or term loans) by up to an amount equal to the sum of (i) $250 million, plus (ii) the amount of additional indebtedness that would not cause the Company’s Secured Net Leverage Ratio (as defined in the Credit Agreement) for the four consecutive fiscal quarters most recently ended, calculated on a pro forma basis after giving effect to the incurrence of such additional indebtedness and any permitted acquisition to be consummated using the proceeds of such additional indebtedness, to exceed 3.50 to 1.00. Any such increase will be subject to the approval of the applicable lenders providing such additional financing. At closing, borrowings under the Credit Agreement were used to repay in full all outstanding indebtedness under the Borrowers’ existing credit agreement. Borrowings under the Credit Agreement may be used for working capital and general corporate purposes, including permitted acquisitions.
The Borrowers’ obligations under the Credit Agreement are guaranteed by six of the Company’s domestic subsidiaries, and the Dutch Borrower’s obligations under the Credit Agreement will be guaranteed by two of the Company’s Dutch subsidiaries (collectively, the “Subsidiary Guarantors”). The Company also guaranteed the obligations of the Dutch Borrower under the Credit Agreement. The Borrowers’ obligations under the Credit Agreement are secured by a first-priority security interest in substantially all of the tangible and intangible personal property of the Borrowers and the domestic Subsidiary Guarantors and a pledge of the capital stock of each existing or subsequently acquired or organized domestic Subsidiary Guarantor. The Dutch Borrower’s obligations under the Credit Agreement will be secured by a pledge of the Dutch Borrower’s equity interests held by the Company, a pledge of the equity interests of the Dutch Borrower’s Dutch subsidiaries and a pledge of any future material foreign subsidiaries held directly by a U.S. entity (in each case, limited to 65% of the voting stock and 50% of the non-voting stock of any such foreign subsidiary).
Revolving loans designated by the Borrowers as “ABR Borrowings” (which must be denominated in U.S. dollars) that are outstanding under the Credit Agreement bear interest at a rate per annum equal to an alternate base rate, which is the greater of Wells Fargo’s Prime Rate, the Federal Funds Rate plus 50 basis points, and LIBOR plus 1%, plus an applicable margin depending on the Company’s Total Net Leverage Ratio (as defined in the Credit Agreement). Revolving loans designated by the applicable Borrower as “Eurocurrency Borrowings” (which may be denominated in any Agreed Currency (as defined in the Credit Agreement) selected by the applicable Borrower, including U.S. dollars) that are outstanding under the Credit Agreement bear interest at a rate per annum equal to a eurocurrency rate of LIBOR (or other comparable rates for certain currencies) subject to a floor of zero, plus an applicable margin depending on the Company’s Total Net Leverage Ratio. The applicable margin ranges from 0.075% to 1.0% for ABR Borrowings and from 1.075% to 2.0% for Eurocurrency Borrowings. In addition, the Company must pay an annual commitment fee to the lenders of 0.15% to 0.35%, depending on the Company’s Total Net Leverage Ratio.
The Credit Agreement provides that the Company is subject to a maximum Total Net Leverage Ratio of not more than 4.00 to 1.00 and an Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.50 to 1.00. The Company has the option to temporarily increase the maximum allowable Total Net Leverage Ratio to 4.50 to 1.00 following the completion of a permitted acquisition, or a series of permitted acquisitions within a 12-month period, having aggregate consideration in excess of $100 million (the “total net leverage ratio increase option”). If exercised, the total net leverage ratio increase option will remain in effect for four consecutive fiscal quarters (beginning with the quarter in which the permitted acquisition, or the last permitted acquisition in a series of permitted acquisitions for aggregate consideration in excess of $100 million, is consummated), unless revoked earlier by the Company.
In addition, the Credit Agreement includes customary negative covenants, subject to certain exceptions, restricting or limiting the Company’s and its subsidiaries’ ability to, among other things: (i) make non-ordinary course dispositions of assets; (ii) make certain mergers and acquisitions; (iii) make dividends and stock repurchases and voluntary prepayments of subordinated debt; (iv) incur indebtedness; (v) make certain loans and investments; (vi) create liens; (vii) transact with affiliates; (viii) enter into sale/leaseback transactions; (ix) enter into swap agreements; (x) enter into agreements restricting subsidiaries’ ability to pay dividends or make distributions; and (xi) modify subordinated debt documents.
The Credit Agreement contains customary events of default. If an event of default occurs and is continuing, the Borrowers may be required immediately to repay all amounts outstanding under the Credit Agreement and the commitments from the Lenders may be terminated. Lenders holding more than 50% of the loans and commitments under the Credit Agreement or the administrative agentmay elect to accelerate the maturity of the loans and/or terminate the commitments under the Credit Agreement upon the occurrence and during the continuation of an event of default.
The Credit Agreement replaces the Credit Agreement, dated as of February 10, 2015, as amended, by and among the Borrowers, Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto, which agreement was terminated in connection with the effectiveness of the Credit Agreement. No early termination fees were incurred by the Company in connection with such termination.
Item 1.02 Termination of a Material Definitive Agreement.
The information set forth under Item 1.01 of this Form 8-K is incorporated into this Item 1.02 by reference.
Item 2.03 Creation of a Direct Financial Obligation of a Registrant.
The information set forth under Item 1.01 of this Form 8-K is incorporated into this Item 2.03 by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
John Bean Technologies CORP ExhibitEX-10.1 2 a6-20x18exhibit101to8xkrec.htm EXHIBIT 10.1 Exhibit EXHIBIT 10.1CONFORMED COPYPublished CUSIP Number: 47783YAH2Revolving Credit CUSIP Number: 47783YAJ8$1,…To view the full exhibit click here
About John Bean Technologies Corporation (NYSE:JBT)
John Bean Technologies Corporation (JBT) is a technology solutions provider to the segments of the food processing and air transportation industries. The Company designs, manufactures, tests and services technological systems and products. It operates through two segments. The JBT FoodTech segment designs, manufactures services and food processing systems used for fruit juice production, frozen food production, in-container food production and convenience food preparation, among others by the food industry. The product offerings of its FoodTech businesses include Protein, Liquid Foods and Automated Systems. The JBT AeroTech segment designs, manufactures and services airport ground support and gate equipment and provides services for airport authorities; airlines, airfreight and ground handling companies; the defense contractors, and other industries. The product offerings of its AeroTech businesses include Mobile Equipment, Fixed Equipment and Airport Services.
