KLX Inc. (“KLX” or the “Company”) (NASDAQ:KLXI), announced today
that it has (i) increased the Consent Payment (as defined below)
with respect to the previously announced solicitation of consents
(the “Consent Solicitation”) to amend (the “Proposed Amendments”)
the indenture (the “Indenture”) governing the Company’s 5.875%
Senior Notes due 2022 (the “Notes”) and (ii) extended the
Expiration Date (as defined below) with respect to the Consent
Solicitation. The Consent Solicitation is being made in
accordance with the terms and subject to the conditions stated in a
Consent Solicitation Statement, dated May 30, 2018 (the “Consent
Solicitation Statement”) to holders of Notes as of 5:00 p.m., New
York City time, on May 30, 2018 (the “Record Date”). As of the date
of the Consent Solicitation Statement, the aggregate outstanding
principal amount of the Notes was $1,200,000,000.
As revised, the Company will pay a consent
payment in the aggregate amount of $4,500,000, payable pro rata, to
Holders of Notes as of the Record Date who validly deliver consents
to the Proposed Amendments prior to the Expiration Date (which are
not validly revoked) in the manner described in the Consent
Solicitation Statement (the “Consent Payment”). The Consent Payment
will be paid to consenting holders promptly after the Expiration
Date, as further described in the Consent Solicitation Statement.
Holders as of the Record Date providing consents after the
Expiration Date will not receive the Consent Payment.
As revised, the Consent Solicitation is
scheduled to expire at 5:00 p.m., New York City time, on June 8,
2018, unless extended or earlier terminated (the “Expiration
Date”). The original Expiration Date was scheduled to expire at
5:00 p.m., New York City time, on June 5, 2018. All terms of the
Consent Solicitation, other than the Consent Payment and the
Expiration Date, remain the same as set forth in the Consent
Solicitation Statement.
As previously announced, pursuant to an
Agreement and Plan of Merger (the “Merger Agreement”), dated April
30, 2018, by and among The Boeing Company, a Delaware corporation
(“Boeing”), Kelly Merger Sub, Inc., a Delaware corporation and a
wholly owned subsidiary of Boeing (“Merger Sub”) and KLX, at the
effective date of the Merger, KLX will merge with and into Merger
Sub, with KLX as the surviving entity (the “Merger”).
Prior to the consummation of the Merger, KLX
intends to spin off to its shareholders KLX Energy Services
Holdings, Inc. ("KLX Energy"), a to-be-formed wholly owned
subsidiary of KLX and the eventual parent company of KLX's Energy
Services Group (the “Spin-Off”). The Company is seeking consents to
the Proposed Amendments in consideration of the payment by the
Company of the Consent Payment (as amended as set forth in this
press release), in order to permit the consummation of the Spin-Off
by the Company prior to the consummation of the Company’s merger
with Boeing. The Notes are currently redeemable at the option of
the Company. If the Proposed Amendments are approved and the
Spin-Off is consummated, the Company expects to redeem the Notes
concurrent with the Merger. If the Proposed Amendments are
not approved, or if the Company otherwise elects to delay
consummation of the Spin-Off for any reason, the Company expects
that the Spin-Off will be consummated simultaneously with the
consummation of the Merger and the Notes would be redeemed.
The consummation of the Consent Solicitation is
subject to a number of conditions that are set forth in the Consent
Solicitation Statement, including, without limitation, (i) having
received consent from Holders representing a majority of the
outstanding aggregate principal amount of the Notes (the “Requisite
Consents”), (ii) the absence of any law or regulation, and the
absence of any injunction or action or other proceeding (pending or
threatened) that (in the case of any action or proceeding if
adversely determined) would make unlawful or invalid or enjoin the
implementation of the Proposed Amendments or the payment of the
Consent Payment or that would question the legality or validity
thereof and (iii) an amendment to the terms of the Company’s senior
secured credit agreement to permit the Proposed Amendments to the
Notes.
The Proposed Amendments will become effective
and operative with respect to the Notes upon receipt of the
Requisite Consents and the execution of the Supplemental Indenture
(the “Effective Time”), which may occur prior to the Expiration
Date if the Requisite Consents are received before then. Upon
receipt of the Requisite Consents, the Company and the guarantors
party to the Indenture intend to execute a Supplemental Indenture
to the Indenture governing the Notes, and will deliver the
Supplemental Indenture to the trustee for execution in accordance
with the Indenture. No consents may be revoked after the Effective
Time. The Proposed Amendments, following receipt of the Requisite
Consents, will become effective and operative upon execution of the
Supplemental Indenture. Upon the Proposed Amendments becoming
effective and operative, all Holders of the Notes would be bound by
the terms thereof, even if they did not deliver consents to the
Proposed Amendments. The Supplemental Indenture will become
inoperative if the Consent Payment is not made promptly after the
Expiration Date in accordance with the terms of the Consent
Solicitation Statement (as amended as set forth in this press
release).
Requests for copies of the Consent Solicitation
Statement and other related materials should be directed to Ipreo
LLC, the Information and Tabulation Agent (the “Information and
Tabulation Agent”) for the Consent Solicitation, at (212) 849-3880
(collect) or (888) 593-9546 (toll-free).
The Company’s obligations to pay the Consent
Payment (as amended as set forth in this press release) are set
forth solely in the Consent Solicitation Statement (as amended as
set forth in this press release). This press release and the
Consent Solicitation Statement shall not constitute an offer to
purchase nor a solicitation of an offer to sell any Notes or other
securities. The Consent Solicitation is being made only by, and
pursuant to the terms of, the Consent Solicitation Statement (as
amended by this press release), and the information in this news
release is qualified by reference to the Consent Solicitation
Statement. No recommendation is made, or has been authorized to be
made, as to whether or not holders of Notes should consent to the
adoption of the Proposed Amendments pursuant to the Consent
Solicitation. Each holder of Notes must make its own decision as to
whether to give its consent to the Proposed Amendments. The Consent
Solicitation is not being made in any jurisdiction in which the
making thereof would not be in compliance with the applicable laws
of such jurisdiction. In any jurisdiction in which the Consent
Solicitation is required to be made by a licensed broker or dealer,
the Consent Solicitation will be deemed to be made on behalf of the
Company by one or more registered brokers or dealers licensed under
the laws of such jurisdiction. None of the Company, J.P. Morgan
Securities LLC, Citigroup Global Markets Inc., Goldman Sachs &
Co. LLC or the Information and Tabulation Agent makes any
recommendation in connection with the Consent Solicitation. Subject
to applicable law, the Company may amend, extend or terminate the
Consent Solicitation.
About KLX Inc.
KLX Inc., through its two operating segments,
provides mission critical products and complex logistical solutions
to support its customers’ high value assets. KLX serves its
customers in demanding environments that face high cost of downtime
and require dependable, high quality just-in-time customer support.
The Aerospace Solutions Group is a leading distributor and value
added service provider of aerospace fasteners and consumables
offering the broadest range of aerospace hardware and consumables
and inventory management services worldwide. The Energy Services
Group provides vital services and products to oil and gas
exploration and production companies on an episodic, 24/7
basis.
Forward-Looking Statements
This news release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Such forward-looking statements, including
those regarding the timing and consummation of the transactions
described herein, involve risks and uncertainties. The Company’s
actual experience and results may differ materially from the
experience and results anticipated in such statements. Factors that
might cause such a difference include those discussed in the
Company’s filings with the Securities and Exchange Commission
(“SEC”), which include its Annual Report on Form 10-K and Current
Reports on Form 8-K. For more information, see the section entitled
“Forward-Looking Statements” contained in the Company’s Annual
Report on Form 10-K and in other filings. The forward-looking
statements included in this news release are made only as of the
date of this news release and, except as required by federal
securities laws and rules and regulations of the SEC, the Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
CONTACT:Michael
PerlmanDirector, Investor RelationsKLX Inc.(561) 791-5435
KLX Inc. (NASDAQ:KLXI)
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