UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): July 28, 2008
BE
AEROSPACE, INC.
(Exact
name of registrant as specified in charter)
Delaware
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0-18348
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06-1209796
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(State
or other
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(Commission
File Number)
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(I.R.S.
Employer
|
jurisdiction
of incorporation)
|
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Identification
No.)
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1400
Corporate Center Way, Wellington, Florida
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33414
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (561) 791-5000
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e
-4(c))
Item
1.01
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Entry into a Material
Definitive Agreement
.
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On July
28, 2008, BE Aerospace, Inc. (the “Company”) completed its previously announced
acquisition (the “Acquisition”) of the Consumables Solutions business from
Honeywell International Inc. (“Honeywell”) pursuant to a stock and asset
purchase agreement, dated June 9, 2008 (the “Purchase Agreement”), between the
Company and Honeywell. The purchase price for the Acquisition
consisted of $901.4 million of cash and six million shares (the “Shares”) of the
Company’s common stock (“Common Stock”).
Supply
Agreement
. In connection with the Acquisition, the Company
entered into a supply agreement, dated as of July 28, 2008 (the “Supply
Agreement”), with Honeywell to be the exclusive supplier of certain consumables
products and standard fasteners and other consumables to support Honeywell's
Aerospace business's internal manufacturing needs. The Supply
Agreement has an initial term of 20 years and will be automatically renewed
for two additional five-year periods if the Company meets certain metrics with
respect to on-time delivery, quality and other benchmarks. Other than
for a material uncured breach following a change of control of the Company to a
specified competitor of Honeywell, the Supply Agreement is not terminable during
the first ten years of the initial term. Following the tenth
anniversary of the Supply Agreement, Honeywell may terminate the Supply
Agreement if the Company fails to meet certain performance
metrics. Under certain limited circumstances, Honeywell would be
permitted to suspend temporarily or terminate the exclusivity provisions of the
Supply Agreement.
License
Agreement.
In connection with the Acquisition, the Company
entered into a license agreement, dated as of July 28, 2008 (the “License
Agreement”), providing the Company with a license from Honeywell for certain
technical information, know-how, business data and intellectual property rights
to allow it to manufacture, sell, have sold, import and distribute to Honeywell
and third parties certain proprietary parts, including fasteners, seals, gaskets
and electrical components. The license has a perpetual term and is
exclusive with respect to sales of parts to third parties for the first
30 years. In addition, it is exclusive with respect to sales of
parts to Honeywell during the term of any exclusivity granted under the term of
the Supply Agreement. If the Supply Agreement is terminated
(or exclusivity under the Supply Agreement is suspended), the license will
become non-exclusive with respect to parts distributed to Honeywell but remains
exclusive with respect to parts distributed to third parties. The
License Agreement is non-terminable except under certain limited conditions
involving a change of control of the Company or assignment by the Company to
certain parties under specified circumstances.
Stockholders
Agreement.
In connection with the Acquisition, the Company
entered into a stockholders agreement, dated as of July 28, 2008 (the
“Stockholders Agreement”), with Honeywell, Honeywell UK Limited, Honeywell
Holding France SAS and Honeywell Deutschland GmbH (collectively, the
“Stockholders”). The Stockholders Agreement prohibits the
Stockholders from transferring any Shares during the first year following the
date of the Stockholders Agreement, other than pursuant to the right to
participate in certain underwritten offerings by the Company. After
the first anniversary but before the second anniversary of the date of the
Stockholders Agreement, the Stockholders will be permitted to transfer up to 50%
of their Shares. After the second anniversary of the date of the
Stockholders Agreement, the Stockholders will be permitted to transfer up to
100% of their Shares, and the Stockholders will
have the
right to demand that the Company file a registration statement covering the
resale of the Shares. The Stockholders may make a maximum of two such
registration demands. The Stockholders will also have the ability to
participate in underwritten offering of Common Stock that the Company conducts,
subject to certain underwriter cutback rights. The registration
rights terminate on the earlier of when the Stockholders collectively hold less
than 25% of the Shares and five years after the closing date of the
Acquisition. The Stockholders Agreement also prohibits the
Stockholders from (a) acquiring additional Common Stock, (b) seeking
to influence management of the Company or soliciting proxies to vote the
Company’s securities or (c) making any proposal for a business combination
or other extraordinary transaction involving the Company, until the later of the
second anniversary of the Stockholders Agreement or the time the Stockholders no
longer own 4% or more of the then-outstanding Common Stock. The transfer and
standstill restrictions will terminate upon the occurrence of certain change of
control or certain other transactions.
Credit
Agreement
.
The
Company, as borrower, entered into a new senior secured credit facility, dated
as of July 28, 2008 (the “
Credit Agreement”
), consisting of (a) a five-year, $350.0
million revolving credit facility (the “
Re
volving Credit Facility”
) and (b) a six-year, $525.0 million
term loan facility (the “
Term Loan Facility”
), with JPMorgan Chase Bank, N.A., as
Administrative Agent, UBS Securities LLC and Credit Suisse Securities (USA) LLC,
as Syndication Agents, The Roya
l
Bank of Scotland plc and Wells Fargo
Bank, N.A., as Documentation Agents, and certain lenders party
thereto. The Credit Agreement also provides for the ability of the
Company to request additional incremental term loans upon satisfaction of
certain cust
o
mary conditions.
The Company's obligations under the
Credit Agreement will be secured by liens on substantially all of the Company's
domestic assets, including a pledge of a portion of the capital stock of certain
foreign subsidiaries.
The
Credit Agreem
ent will, in
certain circumstances, be required to be prepaid with excess cash flow and
proceeds from certain asset sales, debt issuances and condemnation and casualty
proceeds, subject to certain thresholds and reinvestment
rights. Unless terminated ear
l
ier, the Revolving Credit Facility will
mature on July 28, 2013 and the Term Loan Facility will mature on July 28,
2014.
The Credit Agreement requires that the
Company maintain a total leverage ratio of not less than 4.25 to 1.00 and an
interest charge
coverage
ratio of not less than 2.25 to 1.00 during the period starting from July 28,
2008 through December 31, 2009 and, for any period thereafter, the Company must
maintain a total leverage ratio of not less than 4.00 to 1.00 and an interest
charge cove
r
age ratio of not less than 2.50 to
1.00. The Credit Agreement contains certain customary affirmative
covenants with respect to the Company and its subsidiaries. The
Credit Agreement also includes certain customary negative covenants with respect
to the
C
ompany and its subsidiaries, including
limitations on incurrence of debt, limitations on liens, limitations on
incurrence of contingent obligations, prohibitions on fundamental changes,
including by way of merger, consolidation, amalgamation, sale,
liquid
a
tion or dissolution, prohibition on sale
or other disposition of assets, limitations on investments, loans and advances
by the Company, limitation on capital expenditures, limitations on declaration
and payment of dividends, restrictions on transactions w
i
th affiliates, limitations on derivative
transactions, prohibition on amendments to organizational documents, prohibition
on changes to fiscal year, limitations on guarantees, and limitations on
prepayment of other debt, in each case, subject to certain e
x
ceptions, materiality and/or threshold
amounts. The Credit Agreement further provides for certain
customary
representations and warranties and
events of default, including change of control and cross-defaults to other
debt.
Borrowings under the Term
Loan
Facility were used to
fund, in part, the cash portion of the consideration for the Acquisition, to
repay all outstanding amounts under the Company
’
s Old Credit Agreement (defined below)
and to pay certain fees and expenses related to the
Acquisition.
Item
1.02
|
Termination of a
Material Definitive
Agreement
.
|
In connection with entering into the
Credit Agreement described in Item 1.01, the Company repaid all amounts
outstanding under its Amended and Restated Credit Agreement, dated as of August
24, 2006 (t
he “
Old Credit Agreement”
), among the Company, as Borrower, the
lenders and other financial institutions named therein, JPMorgan Chase Bank,
N.A., as Administrative Agent, and UBS Securities LLC and Credit Suisse
Securities (USA) LLC, as Syndication Agent
s
. Certain of the lenders and
agents under the Old Credit Agreement and/or their affiliates are acting as
lenders and/or agents under the Credit Agreement described in Item 1.01
above. The Old Credit Agreement, which has been terminated as of July
28, 20
0
8, provided for a revolving credit
facility of $200.0 million and a term loan facility of $300.0
million. The total outstanding borrowings under the Old Credit
Agreement (inclusive of principal, interest and certain fees payable thereunder)
prior to repa
y
ment in full on July 28, 2008 was
approximately $150.8 million.
Item
2.01
|
Completion of
Acquisition or Disposition of
Assets
.
|
On July
28, 2008, the Company completed the Acquisition. The purchase price
for the Acquisition consisted of $901.4 million of cash and plus the
Shares.
The
Company used the net proceeds received by the Company from the issuance by the
Company on July 1, 2008 of $600,000,000 aggregate principal amount of its 8½%
Senior Notes due 2018 (the “Notes”), $525.0 million of borrowings under the Term
Loan Facility of the Credit Agreement and cash on hand to pay the cash portion
of the Acquisition, to repay, in full, the Old Credit Agreement, and to pay
related fees and expenses.
The
financial statements and pro forma financial information required to be filed
pursuant to Rule 3-05 of Regulation S-X and Article 11 of Regulation S-X have
been previously filed on the Company’s Current Report on Form 8-K on June 23,
2008.
Item
3.02
|
Unregistered Sales of
Equity Securities
.
|
Pursuant
to the Purchase Agreement, on July 28, 2008, the Company paid a portion of the
purchase price of the Acquisition with the Shares. The Shares were
issued to Honeywell and certain of its subsidiaries in a private placement in
reliance upon the exemption from registration provided by Section 4(2) of the
Securities Act. The Company received a representation from Honeywell
that it (and its subsidiaries) acquired the shares solely for the purpose of
investment and not with a view to, or for offer or sale in connection with, any
distribution thereof in violation of the federal securities laws.
SIGNATURE
Pursuant
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.
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BE
AEROSPACE, INC.
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By:
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/s/
Thomas
P. McCaffrey
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Name:
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Thomas
P. McCaffrey
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Title:
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Senior
Vice President
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and
Chief Financial Officer
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Date: August
1, 2008
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