Introductory Note
As previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 27, 2022 (the “Previous 8-K”) by Primoris Services Corporation, a Delaware corporation (“Primoris”), Primoris entered into an Agreement and Plan of Merger (the “Merger Agreement”) with PLH Group, Inc, a Delaware corporation (the “Company”), Amp Merger Sub, Inc, a Delaware corporation and wholly-owned subsidiary of Primoris (“Merger Sub”), and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as representative as set forth in the Merger Agreement, which provided for, among other things, the merger of Merger Sub with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of Primoris (the “Merger”).
Item 1.01. Entry into a Material Definitive Agreement.
Third Amended and Restated Credit Agreement
On August 1, 2022 (the “Closing Date”), Primoris entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”) with CIBC Bank USA, as administrative agent (the “Administrative Agent”), collateral agent and joint lead arranger, the several other financial institutions party thereto as joint lead arrangers and agents and the several other financial institutions party thereto as lenders (collectively, the “Lenders”), amending and restating the existing credit agreement to (i) provide a new term loan in the aggregate principal amount of $945.0 million (the “New Term Loan”) to refinance outstanding term loans and provide a new term loan , (ii) provide a new revolving loan commitment in the aggregate amount of $325.0 million (the “Revolving Credit Facility”) to refinance and increase existing revolving loan commitments whereby the Lenders agree to make loans on a revolving basis from time to time and to issue letters of credit for up to the $325.0 million committed amount and (iii) to extend the maturity date of the Credit Agreement from January 15, 2026 to August 1, 2027.
Under the Credit Agreement, Primoris must make quarterly principal payments on the term loans in an amount equal to approximately $11.8 million. The first principal payment will be due on September 30, 2022.
The principal amount of all loans under the Credit Agreement will bear interest at either: (i) Term SOFR plus an applicable margin as specified in the Credit Agreement (based on Primoris’ net senior debt to EBITDA ratio as defined in the Credit Agreement), or (ii) the Base Rate (which is the greater of (a) the Federal Funds Rate (as defined in the Credit Agreement) plus 0.50% or (b) the Prime Rate (as defined in the Credit Agreement) for such date). Non-use fees, letter of credit fees and administrative agent fees are payable at rates and times as specified in the Credit Agreement.
The principal amount of any loan drawn under the Credit Agreement may be prepaid in whole or in part at any time, without premium or penalty.
The Credit Agreement includes customary restrictive covenants for facilities of this type.
The proceeds from the New Term Loan were used to finance the acquisition of the Company and its subsidiaries, to pay costs and expenses relating to the acquisition and the Credit Agreement, to refinance existing indebtedness and for general corporate purposes.
The foregoing description of the Credit Agreement is only a summary and is qualified in its entirety by reference to the complete text of the Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.
Item 2.01.Completion of Acquisition or Disposition of Assets
On August 1, 2022, the Merger was consummated in accordance with the terms of the Merger Agreement. In connection with the consummation of the Merger, Primoris paid aggregate consideration of $470.0 million in cash in respect of the acquisition of the Company, subject to a customary purchase price adjustment mechanism providing that the Company be free of cash and debt.
The foregoing description of the Merger Agreement and the transactions contemplated thereby is only a summary and is qualified in its entirety by reference to the complete text of the Merger Agreement, which Primoris previously filed as Exhibit 2.1 to the Previous 8-K, which is incorporated by reference in this Current Report on Form 8-K.
