WESCO International, Inc. 8-K
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): September 28, 2005
WESCO INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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001-14989
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25-1723345 |
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(State or other jurisdiction
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(Commission
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(IRS Employer |
of incorporation)
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File Number)
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Identification No.) |
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225 West Station Square Drive, Suite 700 |
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Pittsburgh, Pennsylvania
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15219 |
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(Address of principal executive offices)
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(Zip code) |
Registrants telephone number, including area code: (412) 454-2200
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
Amendment and Restatement of Revolving Credit Facility
On September 28, 2005, WESCO Distribution, Inc. (WESCO Distribution), a wholly-owned
subsidiary of WESCO International, Inc. (the Company), entered into an amended and restated $275
million revolving credit facility (the Revolving Credit Facility), which includes a letter of
credit subfacility of up to $50 million, pursuant to the terms and conditions of a Second Amended
and Restated Credit Agreement, dated as of September 28, 2005 (the Revolving Credit Agreement),
by and among WESCO Distribution, the other credit parties signatory thereto, the lenders signatory
thereto from time to time, General Electric Capital Corporation, as Agent and U.S. Lender, GECC
Capital Markets Group, Inc., as Lead Arranger, GE Canada Finance Holding Company, as Canadian Agent
and a Canadian Lender, Bank of America, N.A., as Syndication Agent, and The CIT Group/Business
Credit, Inc. and Citizens Bank of Pennsylvania, as Co-Documentation Agents.
The Revolving Credit Facility matures in June 2010 and is collateralized by substantially all
assets of WESCO Distribution other than its real property and by substantially all assets of WESCO
Distribution Canada, Inc. WESCO Distributions obligations under the Credit Facility have been
guaranteed by the Company and by certain of WESCO Distributions subsidiaries. The Revolving
Credit Facility consists of two separate sub-facilities: (i) a U.S. sub-facility with a borrowing
limit of up to $225 million and (ii) a Canadian sub-facility with a borrowing limit of up to $50
million. Availability under the Revolving Credit Agreement is limited to the amount of eligible
inventory and Canadian inventory and receivables applied against certain advance rates. Interest
on the Revolving Credit Facility is at LIBOR plus a margin that will range from 1.00% to 1.75%,
depending upon the amount of excess availability under the Revolving Credit Facility.
In addition, the Revolving Credit Facility permits, among other things, the previously
announced acquisition of Carlton-Bates Company (Carlton-Bates) and includes the terms of an
existing consent of the lenders under the Revolving Credit Facility permitting (i) the previously
announced issuance of convertible senior debentures (the Debentures) by the Company and the
unsecured guarantee by WESCO Distribution of the Companys obligations to the holders of the
Debentures and (ii) so long as no event of default has occurred and is continuing under the
Revolving Credit Facility, payments from WESCO Distribution to the Company for payment in respect
of certain indebtedness, including the Debentures.
The Revolving Credit Agreement contains customary affirmative and negative covenants for
credit facilities of this type, including limitations on WESCO Distribution, the Company and
certain of the Companys other subsidiaries (collectively, the WESCO Loan Parties) with respect
to indebtedness, liens, investments, mergers and acquisitions, dispositions of assets and
transactions with affiliates. The Revolving Credit Agreement provides for customary events of
default, including failure to pay principal, interest or fees when due, failure to comply with
covenants, the fact that any representation or warranty made by any of the WESCO Loan Parties is
untrue or incorrect in any material respect, commencement of certain insolvency or receivership
events affecting any of the WESCO Loan Parties and occurrence of a change in
control of any of the WESCO Loan Parties. Upon the occurrence of an event of default, the
commitments of the lenders may be terminated, and all outstanding obligations of the WESCO Loan
Parties under the Revolving Credit Facility may be declared immediately due and payable.
The Revolving Credit Facility amends and restates WESCO Distributions existing $250 million
revolving credit facility entered into on June 17, 2005 (the Old Credit Facility). WESCO
Distribution was in compliance with all applicable financial covenants and other restrictions under
the Old Credit Facility as of the date of the Credit Agreement.
The foregoing is a summary of the material terms and conditions of the Revolving Credit
Agreement and not a complete discussion of the document. Accordingly, the foregoing is qualified
in its entirety by reference to the full text of the Revolving Credit Agreement attached to this
Current Report as Exhibit 10.1, which is incorporated herein by reference.
Amendment to Accounts Receivable Securitization Facility
On
October 4, 2005, WESCO Distribution entered into an amendment of its existing accounts
receivable securitization facility (the Accounts Receivable Securitization Facility), pursuant to
the terms and conditions of Sixth Amendment to Second Amended and Restated Receivables Purchase
Agreement, dated as of October 4, 2005 (the Amendment), by and among WESCO Receivables Corp.,
WESCO Distribution, the Purchasers and Purchaser Agents party thereto and Wachovia Capital Markets,
LLC (as successor to Wachovia Securities, Inc.). The amendment to the Accounts Receivable
Securitization Facility increases the purchase commitment from $350 million to $400 million and
includes Carlton Bates and Carlton-Bates Company of Texas, L.P. as originators under the facility.
The foregoing is a summary of the material terms and conditions of the Amendment and not a
complete discussion of the document. Accordingly, the foregoing is qualified in its entirety by
reference to the full text of the Amendment attached to this Current Report as Exhibit 10.2, which
is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Contract.
Effective September 28, 2005, the Amended and Restated Credit Agreement, dated as of June 17,
2005 (the Old Revolving Credit Agreement), entered into by and among WESCO Distribution, the
other credit parties signatory thereto, the lenders signatory thereto from time to time, General
Electric Capital Corporation, as Agent, GECC Capital Markets Group, Inc., as Lead Arranger, Bank of
America, N.A., as Syndication Agent, and The CIT Group/Business Credit, Inc. and Citizens Bank of
Pennsylvania, as Co-Documentation Agents, was terminated. The Old Credit Agreement was due to
expire in June 2010 and was amended and restated by the Revolving Credit Agreement described under
Item 1.01 above. The Old Credit Agreement provided for maximum borrowings of $250 million and was
subject to a floating interest rate based on LIBOR. The Old Credit Agreement contained customary
financial and other covenants and events of default.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On September 29, 2005, the Company announced the completion of its acquisition of
Carlton-Bates from its shareholders. On that day, a wholly-owned subsidiary of WESCO Distribution
merged with and into Carlton-Bates, which became a wholly-owned subsidiary of WESCO Distribution.
The Company paid at closing a cash merger price of approximately $250 million, of which $25 million
is held in escrow to address up to $5 million of post-closing adjustments relating to working
capital and up to $20 million of potential indemnification claims, with all distributions from the
escrow to be made within 30 months. To fund the merger price paid at closing, WESCO Distribution
borrowed $250 million under its accounts receivable securitization facility, which had been paid
down, in part, with the net proceeds of the previously announced private offerings of $150 million
aggregate principal amount of convertible senior debentures by the Company and $150 million
aggregate principal amount of senior subordinated notes by WESCO Distribution. The acquisition was
completed pursuant to the terms and conditions of the Agreement and Plan of Merger, dated August
16, 2005 (the Merger Agreement), by and among Carlton-Bates, the shareholders of Carlton-Bates
signatory thereto, the Company Representative (as defined therein), WESCO Distribution and C-B
WESCO, Inc. The Merger Agreement is attached to this Current Report as Exhibit 10.3.
On September 29, 2005, the Company issued a press release regarding the completion of the
acquisition of Carlton-Bates. A copy of that press release is filed as Exhibit 99.1 to this
Current Report.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The disclosure set forth above under Item 1.01 is hereby incorporated by reference into this
Item 2.03.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
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Exhibit 10.1 |
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Amended and Restated Credit Agreement, dated as of September 28, 2005, by and
among WESCO Distribution, Inc., the other credit parties signatory thereto, the lenders
signatory thereto from time to time, General Electric Capital Corporation, as Agent and
U.S. Lender, GECC Capital Markets Group, Inc., as Lead Arranger, GE Canada Finance
Holding Company, as Canadian Agent and a Canadian Lender, Bank of America, N.A., as
Syndication Agent, and The CIT Group/Business Credit, Inc. and Citizens Bank of
Pennsylvania, as Co-Documentation Agents (filed herewith). |
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Exhibit 10.2 |
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Sixth Amendment to Second Amended and Restated Receivables Purchase Agreement,
dated as of October 4, 2005, by and among WESCO Receivables Corp., WESCO
Distribution, Inc., the Purchasers and Purchaser Agents party thereto and Wachovia
Capital Markets, LLC (as successor to Wachovia Securities, Inc.) (filed herewith). |
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Exhibit 10.3 |
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Agreement and Plan of Merger, dated August 16, 2005, by and among Carlton-Bates
Company, the shareholders of Carlton-Bates Company signatory thereto, the Company
Representative (as defined therein), WESCO Distribution, Inc. and C-B WESCO, Inc.
(filed herewith). |
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Exhibit 99.1 |
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Press Release dated September 29, 2005 (filed herewith). |
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.
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WESCO INTERNATIONAL, INC. |
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By:
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/s/ Stephen A. Van Oss |
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Stephen A. Van Oss
Senior Vice President and Chief Financial
and Administrative Officer |
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Dated: October 4, 2005