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): November 30, 2007
ESCO TECHNOLOGIES INC.
(Exact Name of Registrant as Specified in Charter)
Missouri 1-10596 43-1554045
(State or Other (Commission (I.R.S. Employer
Jurisdiction of Incorporation) File Number) Identification No.)
9900A Clayton Road, St. Louis, Missouri 63124-1186
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 314-213-7200
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 (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2 (b) under the
Exchange Act (17 CFR 240.14d-2 (b)
[ ] Pre-commencement communications pursuant to Rule 13e-4 (c) under the
Exchange Act (17 CFR 240.13e-4 (c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
The information set forth in Item 2.03 of this Form 8-K is incorporated in this
Item 1.01 by reference.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On December 3,2007, the Registrant issued a press release announcing the
completion of its $319 million acquisition of Doble Engineering Company. A copy
of the press release is furnished with this report as Exhibit 99.1 and is
incorporated herein by reference. The closing of the transaction occurred on
November 30, 2007. The information set forth in Item 1.01 "Entry into a Material
Definitive Agreement" in the Current Report on Form 8-K dated November 6, 2007
is incorporated in this Item 2.01 by reference.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
On November 30, 2007, the Registrant entered into a $330,000,000 five-year
revolving credit facility, dated as of November 30, 2007, among the Registrant,
National City Bank as lender, swingline lender, offshore currency fronting
lender, letter of credit issuer, administrative agent and sole lead arranger,
and the lenders from time to time parties thereto (the "Credit Facility").
National City Bank expects in the future to syndicate the Credit Facility with
certain other financial institutions. The Credit Facility is secured by the
unlimited guaranty of the Registrant's material U.S. subsidiaries and the pledge
of 65% of the share equity of each of the Registrant's material foreign
subsidiaries. The Credit Facility replaces the Registrant's current $100 million
revolving credit facility that would otherwise mature in October 2009. In
addition to loans drawn down by the Registrant, certain of the U.S. subsidiaries
of the Registrant, subject to certain limits and restrictions, may from time to
time request the issuance of letters of credit under the Credit Facility. Such
letters of credit are guaranteed by the Registrant. The U.S. Dollar equivalent
of all loans and letter of credit obligations under the Credit Facility
denominated in foreign currencies may not exceed $50,000,000 in the aggregate at
any time.
The Registrant has used the Credit Facility to partially finance its recent
acquisition of Doble Engineering Company (referred to in Item 2.01 herein), and
intends to use the Credit Facility to finance other permitted acquisitions,
permitted repurchases of its outstanding capital stock, capital expenditures,
and for general corporate and working capital purposes. As of December 4, 2007,
approximately $275,000,000 in borrowings was outstanding under the Credit
Facility. Interest on loans under the Credit Facility may be calculated at the
U.S. prime rate or at a spread over LIBOR, at the Registrant's election. In
addition, the Registrant will pay a commitment fee on the Credit Facility and
certain other fees. Interest on loans under the Credit Facility that accrue at
the U.S. prime rate will be due and payable on the last day of each March, June,
September and December and on November 30, 2012 or such earlier date as all of
the lenders' commitments shall terminate (the "Commitment Termination Date").
Interest on loans that accrue at a LIBOR rate will be due and payable on the
last day of the applicable interest period or, if an interest period is in
excess of three months, on each three month anniversary of the beginning of the
interest period and on the last day of the interest period and on the Commitment
Termination Date. The principal balance of loans shall be due and payable in
full on the Commitment Termination Date. The Registrant may also borrow under
the Credit Facility in the form of one or more letters of credit or swing-line
loans, subject, among other things, to the Registrant's payment of applicable
fees.
The Credit Facility imposes various restrictions on the Registrant, including
usual and customary limitations on the ability of the Registrant or any of its
subsidiaries to incur debt, to grant liens upon their assets, and prohibition of
certain consolidations, mergers, and sales and transfers of assets by the
Registrant and its subsidiaries. In addition, so long as any amounts remain
outstanding or unpaid under the Credit Facility, the Registrant may not exceed a
stated consolidated interest expense to EBITDA (as measured on a rolling four
quarter basis) ratio and a stated funded debt to EBITDA (as measured on a
rolling four quarter basis) ratio. The Credit Facility includes usual and
customary events of default for facilities of this nature (with customary grace
periods, as applicable) and provides that, upon the occurrence of an event of
default, payment of all amounts payable under the Credit Facility may be
accelerated and/or the lenders' commitments may be terminated. In addition, upon
the occurrence of certain insolvency or bankruptcy related events of default,
all amounts payable under the Credit Facility shall automatically become
immediately due and payable, and the lenders' commitments shall automatically
terminate.
ITEM 9.01 FINANCIAL STATEMENTS and EXHIBITS
(a) Financial statements of businesses acquired.
The financial statements required by this Item 9.01, with respect to the
acquisition described in Item 2.01 herein, will be filed by amendment as soon as
practicable, and in any event not later than 71 days after the date on which
this Form 8-K is required to be filed.
(b) Pro forma financial information
The pro forma financial information required by this Item 9.01, with respect to
the acquisition described in Item 2.01 herein, will be filed by amendment as
soon as practicable, and in any event not later than 71 days after the date on
which this Form 8-K is required to be filed.
(c) Exhibits
Exhibit No. Description of Exhibit
4.1 Credit Agreement dated as of November 30, 2007 among the Registrant,
National City Bank and the lenders from time to time parties thereto*
99.1 Press release dated December 3, 2007
*The Registrant agrees to furnish supplementally a copy of any omitted schedule
to the Commission upon request.
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.
ESCO TECHNOLOGIES INC.
Dated: December 5, 2007 By: /s/ T.B. Martin
T.B. Martin
Assistant Secretary
Index of Exhibits
Exhibit No. Description of Exhibit
4.1 Credit Agreement dated as of November 30, 2007 among the Registrant,
National City Bank and the lenders from time to time parties thereto
99.1 Press release dated December 3, 2007