MSC Industrial Direct Co., Inc. (NYSE:MSM) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01Entry into a Material Definitive Agreement.

New Credit Facility

On April 14, 2017 (the Closing Date), MSC Industrial
Direct Co., Inc. (the Company) entered into a new $600
million credit facility (the New Credit Facility), to a
Credit Agreement dated as of April 14, 2017 by and among the
Company, the several banks and other financial institutions or
entities from time to time parties thereto as lenders (the
Lenders), and JPMorgan Chase Bank, N.A., as administrative
agent (the Administrative Agent). The New Credit Facility,
which matures on April 14, 2022, provides for a five-year
unsecured revolving loan facility in the aggregate amount of $600
million.

The New Credit Facility replaces the Companys existing $650
million credit facility governed by that certain Credit
Agreement, dated April 22, 2013, among the Company, the lenders
from time to time parties thereto and JPMorgan Chase Bank, N.A.,
as administrative agent (the Existing Credit Facility). On
the Closing Date, the Company borrowed $330 million under the New
Credit Facility and used an additional $16.7 million in cash on
hand to repay the full amount outstanding under, and terminate,
the Existing Credit Facility.

The New Credit Facility permits up to $50 million to be used to
fund letters of credit. The New Credit Facility also permits the
Company to request one or more incremental term loan facilities
and/or increase the revolving loan commitments in an aggregate
amount not to exceed $300 million. Subject to certain
limitations, each such incremental term loan facility or
revolving commitment increase will be on terms as agreed to by
the Company, the Administrative Agent and the lenders providing
such financing.

Borrowings under the New Credit Facility bear interest, at the
Companys option, either at (i) the LIBOR (London Interbank
Offered Rate) rate plus the applicable margin for LIBOR loans
ranging from 1.00% to 1.375%, based on the Companys consolidated
leverage ratio; or (ii) the greatest of (a) the Administrative
Agents prime rate in effect on such day, (b) the federal funds
effective rate in effect on such day, plus 0.50% and (c) the
LIBOR rate that would be calculated as of such day in respect of
a proposed LIBOR loan with a one-month interest period, plus
1.00%, plus, in the case of each of clauses (a) through
(c), an applicable margin ranging from 0.00% to 0.375%, based on
the Companys consolidated leverage ratio. The Company is required
to pay a quarterly undrawn fee ranging from 0.10% to 0.20% per
annum on the unutilized portion of the New Credit Facility, based
on the Companys consolidated leverage ratio. The Company is also
required to pay quarterly letter of credit usage fees ranging
between 1.00% to 1.375% (based on the Companys consolidated
leverage ratio) on the amount of the daily average outstanding
letters of credit, and a quarterly fronting fee of 0.125% per
annum on the undrawn and unexpired amount of each letter of
credit.

The New Credit Facility is unsecured and contains customary
restrictions on the ability of the Company and its subsidiaries
to (i) incur debt, (ii) make investments, (iii) engage in
fundamental corporate changes, such as mergers, consolidations,
amalgamations, liquidations or dissolutions, (iv) incur liens,
(v) dispose of assets, (vi) enter into certain contractual
restrictions on the ability of the Companys subsidiaries to make
distributions, and (vii) engage in transactions with affiliates.
These covenants are subject to a number of significant exceptions
and limitations. The New Credit Facility also requires that,
during the term of the New Credit Facility, the Company maintain
a maximum consolidated leverage ratio of total indebtedness to
EBITDA (earnings before interest expense, taxes, depreciation and
amortization) of no more than 3.00 to 1.00 (or, at the election
of the Company after its consummates a material acquisition, a
four-quarter temporary increase to 3.50 to 1.00), and a minimum
consolidated interest coverage ratio of EBITDA to total interest
expense of at least 3.00 to 1.00. Borrowings under the New Credit
Facility are guaranteed by certain of the Companys restricted
subsidiaries.

The New Credit Facility also contains customary events of
default. If an event of default under the New Credit Facility
occurs and is continuing, then with the consent of the requisite
lenders the Administrative Agent may, or at the request of the
requisite lenders the Administrative Agent shall, terminate the
revolving loan commitments and declare any outstanding
obligations under the New Credit Facility to be immediately due
and payable. In addition, if the Company or certain of its
material subsidiaries becomes the subject of voluntary or
involuntary proceedings under any bankruptcy, insolvency or
similar law, then any outstanding obligations under the New
Credit Facility will automatically become immediately due and
payable.

The foregoing description of the New Credit Facility is not
complete and is qualified in its entirety by reference to the
full terms and conditions of the New Credit Facility, which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated herein by reference.

Some of the Lenders under the New Credit Facility or the Existing
Credit Facility and/or their affiliates have from time to time
performed and may in the future perform various commercial
banking, investment banking and other financial advisory services
for the Company and/or its subsidiaries in the ordinary course of
business, for which they have received or will receive customary
fees and commissions.

Amended and Restated Note Purchase Agreement

On July 28, 2016, the Company completed the issuance and sale of
$75.0 million aggregate principal amount of its 2.65% Senior
Notes, Series A, due July 28, 2023 and $100.0 million aggregate
principal amount of its 2.90% Senior Notes, Series B, due July
28, 2026 (the Notes) in a private placement exempt from
the registration requirements of the Securities Act of 1933, as
amended. The Notes were issued to a note purchase agreement,
dated July 28, 2016 (the Existing Note Purchase
Agreement).

On the Closing Date, the Company amended and restated the
Existing Note Purchase Agreement (as so amended and restated, the
Amended and Restated Note Purchase Agreement) to (i)
substantially conform the covenants contained in the Amended and
Restated Note Purchase Agreement to those contained in the New
Credit Facility and (ii) provide that in the event of a change of
control, the Company will be required to offer to repurchase the
Notes at par value.

The foregoing description of the Amended and Restated Note
Purchase Agreement is not complete and is qualified in its
entirety by reference to the full terms and conditions of the
Amended and Restated Note Purchase Agreement, which is filed as
Exhibit 10.2 to this Current Report on Form 8-K and incorporated
herein by reference.

Item 1.02Termination of a Material Definitive
Agreement.

The information set forth above under New Credit
Facility with respect to the Existing Credit Facility in
Item 1.01 is hereby incorporated by reference into this Item
1.02.

Item 2.03Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.

The information set forth above under New Credit
Facility with respect to the New Credit Facility in Item
1.01 is hereby incorporated by reference into this Item 2.03.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits

The following exhibits are filed with this Report on Form 8-K:

About MSC Industrial Direct Co., Inc. (NYSE:MSM)

MSC Industrial Direct Co., Inc. is a North American distributor of metalworking and maintenance, repair and operations (MRO) products and services. The Company’s range of MRO products include cutting tools, measuring instruments, tooling components, metalworking products, fasteners, flat stock, raw materials, abrasives, machinery hand and power tools, safety and janitorial supplies, plumbing supplies, materials handling products, power transmission components and electrical supplies. The Company serves a range of customers throughout the United States, Canada and the United Kingdom, from individual machine shops, to manufacturing companies, to government agencies, such as the General Services Administration and the Department of Defense. The Company also serves durable and non-durable goods manufacturing, education and healthcare markets, among others. As of September 3, 2016, the Company had operated a network of 12 customer fulfillment centers.

MSC Industrial Direct Co., Inc. (NYSE:MSM) Recent Trading Information

MSC Industrial Direct Co., Inc. (NYSE:MSM) closed its last trading session down -1.22 at 88.20 with 607,624 shares trading hands.