RE/MAX Holdings, Inc. (NYSE:RMAX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On November 22, 2016, RE/MAX, LLC (the Company) entered into an
Asset Purchase Agreement (the APA) with RE/MAX of
Kentucky/Tennessee, Inc. (RE/MAX of Kentucky/Tennessee); RE/MAX
of Georgia, Inc. (RE/MAX of Georgia); RE/MAX of Southern Ohio,
Inc. (RE/MAX of Southern Ohio and, together with RE/MAX of
Kentucky/Tennessee and RE/MAX of Southern Ohio, the Sellers); the
stockholder of the Sellers; and certain key employees of the
Sellers. to the APA, the Company has agreed to acquire certain
assets of the Sellers (the Acquisition). The assets to be
acquired include the regional franchise agreements issued by the
Company permitting the sale of RE/MAX franchises in Georgia,
Kentucky, Tennessee, and certain areas of Ohio. The Company
intends to acquire these assets in order to expand its owned and
operated regional franchising operations. The Company will pay a
purchase price of approximately $50.4 million. The Acquisition,
which is subject to customary closing conditions, is expected to
close by the end of 2016. Each of the parties to the APA has made
certain representations, warranties, and covenants that are
customary for a transaction of this nature. The foregoing
description of the APA does not purport to be complete and is
qualified in its entirety by reference to the APA, which is
attached hereto as Exhibit 2.1 and incorporated herein by
reference. The Company is a wholly-owned subsidiary of RMCO, LLC
(RMCO), and RE/MAX Holdings, Inc. is the sole manager of RMCO.
On November 22, 2016, the Company and RMCO entered into the
second amendment (the Second Amendment) to the credit agreement,
dated July 31, 2013 (the Credit Agreement) with JPMorgan Chase
Bank, N.A., as administrative agent and the various lenders party
thereto. The Second Amendment increases the revolving commitment
of the lenders by $20,000,000 (to a total of $30,000,000),
effective on the closing date of the Acquisition, and waives
certain limitations on acquisitions in order to enable the
Company to consummate the Acquisition. The revolving commitment
under the Credit Agreement is in addition to existing term loans
borrowed by the Company under the Credit Agreement. The foregoing
summary of the Second Amendment does not purport to be complete
and is qualified in its entirety by reference to the Second
Amendment, a copy of which is filed as Exhibit 10.1 to the
Current Report on Form 8-K.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
Reference is hereby made to the disclosure in Item 1.01 of this
Form 8-K regarding the Second Amendment to the Credit Agreement,
which disclosure is hereby incorporated in Item 2.03 of this Form
8-K.
Item 7.01 Regulation FD Disclosure. *
On November 28, 2016, the Company issued a press release
regarding the Acquisition. A copy of the press release is
furnished as Exhibit 99.1 hereto.
RE/MAX Holdings, Inc. has prepared materials for investors and
analysts related to the Acquisition and other transactions and
intends to make the materials available on the investor relations
section of its primary website (http://www.remax.com). The
materials are furnished as Exhibit 99.2 to this Current Report on
Form 8-K.
Item 9.01. Financial Statements and Exhibits. *
| Exhibit No. | Description |
| 2.1 |
Asset Purchase Agreement, dated November 22, 2016, by and among RE/MAX, LLC; RE/MAX of Kentucky/Tennessee, Inc.; RE/MAX of Georgia, Inc.; RE/MAX of Southern Ohio, Inc.; Lisa McPherson, Scott McPherson, Robin McPherson, and Frank McCarty, each in their respective capacity as co-trustee for The McPherson Family Trust; Dane Ellison; and David Smith. (Exhibits and schedules have been omitted to Item 601(b)(2) of Regulation S-K. The Registrant hereby undertakes to furnish supplemental copies of any omitted exhibits and schedules upon request by the SEC.) |
| 10.1 |
Second Amendment to Credit Agreement, dated as of November 22, 2016, among RMCO, LLC, RE/MAX, LLC, the several lenders from time to time parties thereto and JPMorgan Chase Bank, N.A., as administrative agent. |
| 99.1 | Press Release issued on November 28, 2016 by RE/MAX, LLC |
| 99.2 | 2016 Independent Regions Acquisitions Supplementary Materials |
*The information contained in Item 7.01 and Exhibits 99.1 and
99.2 of Item 9.01 of this Current Report on Form 8-K are being
furnished and shall not be deemed filed for purposed of Section
18 of the Securities Exchange Act of 1934, as amended, nor shall
such information or exhibits be deemed incorporated by reference
in any registration statement or other filings of the Registrant
under the Securities Act of 1933, as amended, except as shall be
set forth by specific reference in such filing.
About RE/MAX Holdings, Inc. (NYSE:RMAX)
RE/MAX Holdings, Inc. is a franchisor of real estate brokerage services. The Company is engaged in the business of recruiting and retaining agents, and selling franchises. The Company operates in two segments: Real Estate Franchise Services and Brokerages. The Real Estate Franchise Services segment comprises the operations of its owned and independent global franchising operations, and corporate-wide professional services expenses. The Brokerages segment contains the operations of its owned brokerage offices in the United States, the results of operations of a mortgage brokerage company, in which it owns a non-controlling interest and reflects the elimination of intersegment revenue and other consolidation entities. Its franchisees operate under the RE/MAX brand name. In the United States and Canada, it owns over 10 of over 30 regional franchises, representing over 55% of its the United States and Canada agent count. The remaining over 20 regional franchises are Independent Regions. RE/MAX Holdings, Inc. (NYSE:RMAX) Recent Trading Information
RE/MAX Holdings, Inc. (NYSE:RMAX) closed its last trading session down -0.35 at 48.80 with 194,186 shares trading hands.