Item 1.01. Entry Into a Material Definitive Agreement.
Agreement to Acquire the Pursuit division of S2 Yachts, Inc.
On August 21, 2018, Malibu Boats, LLC, a Delaware limited liability company (“Malibu”) and a wholly-owned indirect subsidiary of Malibu Boats, Inc., a Delaware corporation (the “Company”), and PB Holdco, LLC, a Delaware limited liability company (the “Purchaser”) and a wholly-owned direct subsidiary of Malibu, entered into an agreement to acquire the Pursuit division (“Pursuit”) of S2 Yachts, Inc., a Michigan corporation (“S2”) from S2 and Gen 123 Properties, LLC, a Michigan limited liability company (“Gen123” and together with S2, the “Sellers”) and an affiliate of S2, pursuant to an asset purchase agreement, dated as of August 21, 2018 (the “Asset Purchase Agreement”), by and among the Purchaser, Malibu, the Sellers and the principals of S2 named therein (the “Acquisition”) for an aggregate purchase price of $100 million. A portion of the purchase price will be deposited into an escrow account to secure certain post-closing obligations of the Sellers. The Purchaser will pay the purchase price for the Acquisition in cash with borrowings under its Second Amended and Restated Credit Agreement following an amendment to increase the amount available under the revolving credit facility, as described below.
The Asset Purchase Agreement contains customary representations and warranties regarding Pursuit and the Sellers, customary covenants, including a covenant regarding the conduct of Pursuit’s business between signing and closing of the Acquisition and post-closing restrictive covenants from the Sellers and certain other parties in favor of the Purchaser, indemnification provisions and other provisions customary for transactions of this nature. The closing of the Acquisition will occur no earlier than October 1, 2018, but otherwise on the third business day following the satisfaction or waiver of all closing conditions set forth in the Asset Purchase Agreement (other than closing conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver thereof at the closing) or as the Purchaser and the Seller may otherwise mutually agree in writing.
The foregoing description of the Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Asset Purchase Agreement, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference. Certain schedules and annexures to the Asset Purchase Agreement have been omitted pursuant to Item 601(b)(2) of RegulationS-K. The Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule or annexure upon request.
The Asset Purchase Agreement has been provided solely to inform investors of its terms. The representations, warranties and covenants contained in the Asset Purchase Agreement were made only for the purposes of such agreement and as of specific dates, were made solely for the benefit of the parties to the Asset Purchase Agreement and may be intended not as statements of fact, but rather as a way of allocating risk to one of the parties if those statements prove to be inaccurate. In addition, such representations, warranties and covenants may have been qualified by certain disclosures not reflected in the text of the Asset Purchase Agreement and may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. The Company’s shareholders and other investors are not third-party beneficiaries under the Asset Purchase Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of the Company, Pursuit or the Sellers.
First Incremental Facility Amendment and First Amendment to Second Amended and Restated Credit Agreement
On August 21, 2018, Malibu, as the borrower (the “Borrower”), entered into the First Incremental Facility Amendment and First Amendment (the “Amendment”) to its existing Second Amended and Restated Credit Agreement dated as of June 28, 2017 (as amended, the “Credit Agreement”), by and among the Borrower, Malibu Boats Holdings, LLC, parent of the Borrower and a wholly-owned subsidiary of the Company (the “LLC”), and certain subsidiaries of the Borrower parties thereto, as guarantors, the lenders parties thereto, and SunTrust Bank, as administrative agent, swingline lender and issuing bank. The Amendment increases the amount available under the revolving credit facility by $50.0 million (the “Incremental Revolving Commitment”) from $35.0 million to $85.0 million. Revolving loans made pursuant to the Amendment will have terms and conditions identical to revolving loans under the Credit Agreement except a ticking fee will accrue on the Incremental Revolving Commitment. The Borrower will be required to pay a ticking fee, which will accrue at a rate of 0.30% per annum on the aggregate amount of the Incremental Revolving Commitment. The availability of the Incremental Revolving Commitment is subject to the satisfaction of certain conditions set forth in the Amendment, including the closing of the Acquisition.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
