Item 1.01
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Entry into a Material Definitive Agreement.
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On January 13, 2017, Global Power Equipment Group
Inc., a Delaware corporation (the
Company
), completed the sale of all of the issued and outstanding shares of capital stock (the
Shares
) of Hetsco Holdings, Inc., a Delaware corporation (
Hetsco
Holdings
), which, in turn, is the sole stockholder of Hetsco, Inc., to Chart Lifecycle, Inc., a Delaware corporation (the
Buyer
), pursuant to the terms of the Stock Purchase Agreement (the
Purchase
Agreement
) entered into on January 13, 2017, by and between the Company and the Buyer.
Subject to the terms and conditions of the Purchase
Agreement, the Company agreed to sell the Shares for approximately $22 million in cash (the
Purchase Price
), subject to certain adjustments as provided for in the Purchase Agreement. Pursuant to the terms of the Purchase
Agreement, $1.5 million of the Purchase Price was placed in escrow in order to satisfy certain indemnification obligations of the Company, any post-closing adjustments to the Purchase Price, and certain insurance premium security arrangements, with
$650,000 eligible for release after 18 months, $300,000 eligible for release after 36 months, $300,000 eligible for release after 48 months, and the remaining amount eligible for release after 60 months (in each case, less any pending
indemnification claims or amounts previously paid).
The Purchase Agreement also contains customary representations, warranties and covenants, including
non-competition and non-solicitation provisions and indemnification provisions.
Hetsco Holdings is the parent company of Hetsco, Inc., a global provider
of mission critical brazed aluminum heat exchanger repair, maintenance, and safety services to the industrial gas, liquefied natural gas, and energy industries. The Company previously operated Hetsco Holdings as part of its Services Division.
The Company will include the Purchase Agreement as an exhibit to its 2016 Annual Report on Form 10-K, to be filed with the U.S. Securities and Exchange
Commission. The foregoing description does not constitute a complete summary of the terms of the Purchase Agreement and is qualified in its entirety by reference to the full text of the agreement.
On January 17, 2017, the Company issued a press release announcing, among other things, the matters set forth above. A copy of the press release is filed
as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 1.01.