Matrix Service Company (NASDAQ:MTRX) Files An 8-K Entry into a Material Definitive Agreement

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Matrix Service Company (NASDAQ:MTRX) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01.

Entry into a Material Definitive Agreement.
Purchase of Houston Interests, LLC
On December 12, 2016, Matrix PDM Engineering, Inc., (Matrix PDM),
a subsidiary of Matrix Service Company (the Company), entered
into a Membership Interest Purchase Agreement dated as of such
date (the Purchase Agreement), by and among Matrix PDM, as
purchaser, the C. Douglas Houston Revocable Trust U/T/A dated
November 21, 2016, as seller, and C. Douglas Houston, an
individual and the grantor and trustee of the seller, as seller
representative. to the Purchase Agreement, Matrix PDM will
acquire all of the issued and outstanding membership interests of
Houston Interests, LLC, a global solutions consulting,
engineering, design, construction and systems integration
business headquartered in Tulsa, Oklahoma, with offices in New
Orleans, Louisiana, Columbus, Ohio and Pittsburgh, Pennsylvania
(Houston Interests). The transactions contemplated by the
Purchase Agreement closed on December 12, 2016.
The purchase price is $46.0 million of cash, subject to certain
post-closing adjustments for working capital, cash and other
items. The Purchase Agreement contains customary representations,
warranties, covenants and indemnities of the parties to the
Purchase Agreement.
The summary of the Purchase Agreement in this Current Report on
Form 8-K does not purport to be complete and is qualified in its
entirety by reference to the full text of the Purchase Agreement,
which is filed as Exhibit 2 to this Current Report on Form 8-K
and incorporated herein by reference.
The Purchase Agreement has been included to provide investors and
security holders with information regarding its terms. It is not
intended to provide any other factual or financial information
about the Company, Matrix PDM, the seller, Houston Interests or
any of their respective subsidiaries or affiliates. The
representations, warranties and covenants contained in the
Purchase Agreement were made only for purposes of the Purchase
Agreement and as of specific dates; were solely for the benefit
of the parties to the Purchase Agreement; may be subject to
limitations agreed upon by the 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; and may be
subject to standards of materiality applicable to the contracting
parties that differ from those applicable to investors. Investors
should not rely on the representations, warranties and covenants
or any description thereof as characterizations of the actual
state of facts or condition of the Company, Matrix PDM, the
seller, Houston Interests or any of their respective subsidiaries
or affiliates. Moreover, information concerning the subject
matter of the representations, warranties and covenants may
change after the date of the Purchase Agreement. The Purchase
Agreement should not be read alone, but should instead be read in
conjunction with the other filings that the Company makes with
the Securities and Exchange Commission.
Credit Agreement Amendment
On December 12, 2016, the Company entered into an Increase
Agreement and Third Amendment to Third Amended and Restated
Credit Agreement (the Amendment), by and among the Company and
certain of its Canadian subsidiaries party thereto, as Borrowers,
JPMorgan Chase Bank, N.A., as Administrative Agent, and the other
Lenders party thereto (the Lenders), which amends the Third
Amended and Restated Credit Agreement dated as of November 7,
2011 (as previously amended, the Existing Credit Agreement and,
as further amended by the Amendment, the Credit Agreement).
The Amendment amends the Existing Credit Agreement in certain
respects, including the following:
to the Existing Credit Agreements accordion feature, the
aggregate revolving loan commitments of the Lenders are
increased from $200.0 million to $250.0 million.
The maximum aggregate amount, or sublimit, for Canadian
Dollar loans is increased from U.S. $40.0 million to U.S.
$50.0 million.
During any Acquisition Adjustment Period, the Companys
Senior Leverage Ratio, determined as of the end of each of
its fiscal quarters, may not exceed 3.00 to 1.00. At all
other times, the Senior Leverage Ratio, as of the end of
any fiscal quarter, may not exceed 2.50 to 1.00.
The term Acquisition Adjustment Period is defined to mean a
period elected by the Company beginning with the purchase price
funding date for any Material Acquisition, and continuing
through the earlier of (i) the last day of the period of four
consecutive fiscal quarters beginning with the fiscal quarter
in which the Material Acquisition occurred or (ii) the Companys
election to terminate the Acquisition Adjustment Period. The
term Material Acquisition is defined to mean the purchase of
Houston Interests and any individual acquisition which equals
or exceeds $50.0 million or any series of acquisitions in the
same fiscal quarter in which the aggregate consideration equals
or exceeds $50.0 million.
The summary of the Amendment in this Current Report on Form 8-K
does not purport to be complete and is qualified in its
entirety by reference to the full text of the Amendment, which
is filed as Exhibit 10 to this Current Report on Form 8-K and
incorporated herein by reference.
Certain of the Lenders under the Credit Agreement and/or their
affiliates have provided, from time to time, and may continue
to provide, commercial banking, investment banking, financial
and other services to the Company and/or its affiliates for
which the Company and/or its affiliates have paid, and expect
to pay, customary fees.
Item 2.01.
Completion of Acquisition or Disposition of Assets.

On December 12, 2016, the transactions contemplated by the
Purchase Agreement were consummated, and the seller sold all of
the membership interests in Houston Interests to Matrix PDM.
The description of the Purchase Agreement in Item 1.01 of this
Current Report on Form 8-K is incorporated by reference into
this Item 2.01.
Item 2.03.
Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of
a Registrant.

The description of the Amendment under the heading “Credit
Agreement Amendment” in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.03. In
connection with the acquisition of Houston Interests, on
December 12, 2016, the Company borrowed $46.0 million under the
Credit Agreement to pay the purchase price.
Item 8.01.
Other Events.

On December 12, 2016, the Board of Directors approved a new
stock buyback program (the “December 2016 Program”). Under the
December 2016 Program, the Company may repurchase common stock
of the Company in any calendar year commencing with calendar
year 2016 and continuing through calendar year 2018, up to a
maximum of $25.0 million per calendar year. The Company may
repurchase its stock from time to time in the open market at
prevailing market prices or in privately negotiated
transactions. The December 2016 Program will continue through
December 31, 2018 unless and until revoked by the Board of
Directors.
Item 9.01.
Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.
Financial statements will be filed by amendment to this Current
Report on Form 8-K to Item 9.01(a)(4) no later than 71 days
after the date on which this Current Report on Form 8-K is
required to be filed.
(b) Pro forma financial information.
Pro forma financial information will be filed by amendment to
this Current Report on Form 8-K to Item 9.01(b)(2) no later
than 71 days after the date on which this Current Report on
Form 8-K is required to be filed.
(c) Exhibits.
The following exhibits are filed or furnished herewith:
Exhibit No.
Description
2
Purchase Agreement.
Increase Agreement and Third Amendment to Third
Amended and Restated Credit Agreement.
Press Release dated December 13, 2016, announcing
the purchase of Houston Interests.

Certain schedules and exhibits have been omitted to Item
601(b)(2) of Regulation S-K. The Company will furnish
supplementally copies of any omitted schedules or exhibits to
the Commission 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.
Matrix Service Company
Dated: December 16, 2016
By: /s/ Kevin S. Cavanah
Kevin S. Cavanah
Vice President and Chief
Financial Officer
EXHIBIT INDEX
Exhibit No.
Description
2
Purchase Agreement.
Increase Agreement and Third Amendment to Third
Amended and Restated Credit Agreement.
Press Release dated December 13, 2016,
announcing the purchase of Houston Interests.

Certain schedules and exhibits have been omitted


About Matrix Service Company (NASDAQ:MTRX)

Matrix Service Company provides engineering, fabrication, infrastructure, construction and maintenance services primarily to the oil, gas, power, petrochemical, industrial, mining and minerals markets. The Company’s segments include Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions and Industrial. The Electrical Infrastructure segment primarily includes construction and maintenance services to a range of power generation facilities, such as combined cycle plants, natural gas fired power stations and renewable energy installations. The Oil Gas & Chemical segment includes turnaround activities, plant maintenance services and construction in the downstream petroleum industry. The Storage Solutions segment includes new construction of crude and refined products aboveground storage tanks (ASTs), as well as planned and emergency maintenance services. The Industrial segment includes construction and maintenance work in the iron and steel and mining and minerals industries.

Matrix Service Company (NASDAQ:MTRX) Recent Trading Information

Matrix Service Company (NASDAQ:MTRX) closed its last trading session up +0.05 at 22.45 with 197,734 shares trading hands.