Item 1.01.
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Entry into a Material Definitive Agreement.
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On March 28, 2019, Darling Ingredients Inc. (the Company) and the subsidiary guarantors named therein entered into a Purchase
Agreement (the Purchase Agreement) with Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), for itself and on behalf of the other several initial purchasers named therein (together with Merrill Lynch,
the Initial Purchasers), for the sale by the Company, and the purchase by the Initial Purchasers, severally, of $500,000,000 aggregate principal amount of the Companys 5.25% Senior Notes due 2027 (the Notes). The
Purchase Agreement contains customary representations, warranties and agreements by the Company and the subsidiary guarantors named therein. In addition, the Company and such subsidiary guarantors have agreed to indemnify the Initial Purchasers
against certain liabilities, including liabilities for material mistatements or omissions in connection with the offering of the Notes, or to contribute to payments the Initial Purchasers may be required to make because of any of those liabilities.
On April 3, 2019, the Notes, which were offered in a private offering, were issued pursuant to a Senior Notes Indenture, dated as of
April 3, 2019 (the Indenture), among the Company, the guarantors party thereto from time to time, and Regions Bank, as trustee (the Trustee).
The gross proceeds from the sale of the Notes were $500,000,000. The gross proceeds from the sale of the Notes, together with cash on hand,
are expected to be used to refinance all of the Companys 5.375% Senior Notes due 2022, by cash tender offer for those notes and, if and to the extent necessary, by redemption of those notes, to pay the discount of the Initial Purchasers and to
pay the other fees and expenses related to the offering of the Notes.
The Notes will mature on April 15, 2027. The Company will pay
interest on the Notes on April 15 and October 15 of each year, commencing on October 15, 2019. Interest on the Notes will accrue from April 3, 2019 at a rate of 5.25% per annum and be payable in cash.
Guarantees
. The Notes will initially be guaranteed (such guarantees, the Guarantees) by the Companys restricted
subsidiaries, other than foreign subsidiaries, that are borrowers under or that guarantee the Companys existing secured term loan facilities and secured revolving credit facility (collectively, the Senior Secured Facilities). In
the future, the Notes will be guaranteed by the Companys restricted subsidiaries, other than foreign subsidiaries, receivables entities and certain other subsidiaries, that are borrowers under or that guarantee the Senior Secured Facilities
or, if the Senior Secured Facilities are not outstanding, that incur certain other indebtedness. The Guarantee of any guarantor of the Notes (each, a Guarantor) may be released under circumstances specified in the Indenture.
Ranking
. The Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of the Companys
existing and future senior unsecured indebtedness. The Notes are effectively junior to all of the Companys existing and future secured indebtedness, including its indebtedness under the Senior Secured Facilities, to the extent of the value of
the assets securing such indebtedness. The Notes are structurally junior to all existing and future indebtedness and other liabilities (including trade payables and capital lease obligations) of all subsidiaries of the Company that do not guarantee
the Notes, including current and future foreign subsidiaries that are borrowers under or that guarantee the Senior Secured Facilities but not the Notes. The Notes are senior in right of payment to all of the Companys future subordinated
indebtedness, if any.
The Guarantees are senior unsecured obligations of the Guarantors and rank equally in right of payment with all of
each Guarantors existing and future senior unsecured indebtedness, including, such Guarantors guarantee of the 3.625% Senior Notes due 2026 issued by Darling Global Finance B.V., a subsidiary of the Company. The Guarantees are
effectively junior to all of each Guarantors existing and future secured indebtedness, including such Guarantors indebtedness under the Senior Secured Facilities, to the extent of the value of the assets securing such indebtedness. The
Guarantees are structurally junior to all existing and future indebtedness and other liabilities (including trade payables and capital lease obligations) of each Guarantors
non-guarantor
subsidiaries,
including current and future foreign subsidiaries of each Guarantor that are borrowers under or that guarantee the Senior Secured Facilities but not the Notes. The Guarantees are senior in right of payment to all of each Guarantors future
subordinated indebtedness, if any.
Offer to Purchase; Open Market Purchases
. The Company is not required to make any mandatory
redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Company may be required to offer to purchase Notes as described under Change of Control Repurchase Event below. The Company may
acquire Notes by means other than a redemption, whether by tender offer, open market purchases, negotiated transactions or otherwise and at differing prices, in accordance with applicable securities law, so long as such acquisition does not
otherwise violate the terms of the Indenture.