Business Context and Reporting Period
Company: TTM Technologies, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: May 31, 2015
Event: Completion of the acquisition of Viasystems Group, Inc. (the "Merger") and entry into new material credit facilities to fund the transaction.
Key Financial Metrics and Capital Structure
This filing details the financing structure for the Merger rather than operating performance metrics (revenue, profit, or cash flow) for a specific period.
- Total Debt Raised: $1,030 million borrowed under new Credit Facilities.
- Term Loan Facility: $950 million borrowed (Total facility capacity: $1,115 million).
- Asset-Based Revolving (ABL) Facility: $80 million borrowed (Total facility capacity: $150 million).
- Merger Consideration: Viasystems shareholders received $11.33 in cash and 0.706 shares of TTM common stock per share.
- Use of Proceeds: Funding cash consideration, refinancing Viasystems debt, refinancing foreign subsidiary debt, and paying transaction fees.
Material Changes and Agreements
The filing reports the execution of definitive agreements and the closing of the Merger on May 31, 2015.
- Acquisition Completion: Viasystems is now a wholly-owned subsidiary of TTM Technologies.
- Debt Commitments: Execution of Term Loan and ABL Credit Agreements with JPMorgan Chase, Barclays, RBS, and HSBC.
- Registration Rights: Finalized agreement with Hicks, Muse, Tate & Furst (HM Funds) and GSC Recovery (BD Funds) providing a 90-day priority period for demand registration rights.
- Termination of Voting Agreements: Voting agreements with HM Funds and BD Funds regarding Viasystems stock were terminated upon the Effective Time of the Merger.
Outlook, Risks, and Covenants
Debt Covenants and Repayment:
- Term Loan Maturity: May 31, 2021.
- ABL Maturity: May 31, 2020.
- Amortization: Quarterly principal repayments on the Term Loan commence October 1, 2015, starting at 0.25% of the outstanding balance and increasing to 1.25% by October 2017.
- Financial Covenants: The Term Loan requires a specified consolidated leverage ratio; the ABL requires a consolidated fixed charge coverage ratio (applicable only under certain circumstances).
- Mandatory Prepayments: Required upon asset sales, debt issuances, or receipt of Excess Cash Flow.
Risks and Contingencies:
- Events of Default: Include payment defaults, covenant breaches, bankruptcy, and changes in control. An ABL default may trigger a Term Loan default if outstanding ABL borrowings exceed $25 million and remain uncured for 30 days.
- Forward-Looking Statements: The Company disclaims any obligation to update expectations or forward-looking statements.
Investor Verification Checklist
- Verify the pro forma financial information and historical financial statements of Viasystems, which are scheduled to be filed by amendment within 71 days.
- Review the full text of the Term Loan and ABL Credit Agreements (Exhibits 10.1 and 10.2) for specific definitions of "Excess Cash Flow" and leverage ratio thresholds.
- Monitor the 90-day "HM/BD Priority Period" for potential demand registration rights exercises by the HM Funds and BD Funds.
- Confirm the initial quarterly principal repayment amount due on October 1, 2015, based on the 0.25% amortization schedule.