SEC Form 8-K Summary
Registrant: B. Riley Principal Merger Corp. (BRPM), in connection with its proposed business combination with Alta Equipment Holdings, Inc. The report is dated February 3, 2020, and was signed February 4, 2020. The filing is not a periodic financial statement and does not provide current revenue, profit, cash flow, margin, or balance-sheet results.
Business Context and Reporting Period
BRPM, Alta, and related parties entered into a merger agreement on December 12, 2019. Under the agreement, a BRPM subsidiary will merge with Alta, making Alta a wholly owned subsidiary of BRPM. The newly executed debt commitments satisfy the merger agreement’s requirement for at least $310 million of debt financing, subject to effectiveness conditions and closing of the business combination.
Financing, Liquidity, and Debt Terms
- ABL Facility: Asset-based revolving facility of up to the lesser of $300 million or the borrowing base, less loans and letters of credit. Scheduled maturity is February 13, 2025.
- Second Lien Facility: Borrowings of either $155 million or $165 million, as selected at effectiveness. Scheduled maturity is August 13, 2025.
- Floor Plan Facility: Asset-based revolving facility of up to the lesser of $40 million or the borrowing base, less loans and letters of credit. Scheduled maturity is February 13, 2025.
- Each facility was expected to become effective upon satisfaction of customary conditions on or before February 14, 2020. The filing does not state amounts drawn at the reporting date.
- Interest rates vary by facility, reference rate, and pricing grid. The Second Lien Facility carries a stated spread of 7.00% plus the applicable base rate or 8.00% plus the adjusted LIBO rate.
- Unused-line fees apply to the ABL and Floor Plan facilities.
- The facilities include leverage, coverage, fixed-charge, availability, and minimum Consolidated EBITDA covenants. The stated minimum Consolidated EBITDA for the fiscal year ended December 31, 2019 is $79 million.
Material Changes and Unusual Items
- BRPM entered into a Fifth Amended and Restated ABL First Lien Credit Agreement, a Second Lien Note Purchase Agreement, and a Fifth Amended and Restated Floor Plan First Lien Credit Agreement.
- Alta separately announced definitive agreements to acquire Liftech Equipment Companies, Inc. and FlaglerCE Holdings, LLC. The filing does not provide purchase prices, expected closing dates, or financial results for either acquisition.
- Substantially all of the company’s assets are pledged as collateral. Covenant breaches may result in default, acceleration, termination of lending commitments, foreclosure on collateral, and cross-defaults across the facilities.
Outlook, Risks, and Contingencies
Completion of the financing and business combination remained subject to customary conditions, including transaction approvals and other closing requirements. Forward-looking statements address the proposed merger, the Liftech and Flagler acquisitions, anticipated benefits, and future operating and financial performance, but the filing provides no quantitative guidance.
- Key risks include failure to obtain stockholder approval, failure to satisfy closing conditions, termination of the merger or acquisition agreements, and inability to maintain NYSE listing.
- Other risks include integration and execution challenges, competition, growth and profitability pressures, customer and supplier retention, employee retention, transaction costs, legal proceedings, regulatory changes, and broader economic or business conditions.
Most Important Facts to Verify
- Whether the business combination closed and whether the three credit facilities became effective by February 14, 2020.
- The actual amount drawn under each facility and the resulting pro forma net debt and leverage.
- Whether Alta met the $79 million fiscal 2019 minimum Consolidated EBITDA covenant.
- The final consideration, financing, and closing status of the Liftech and Flagler acquisitions.
- Applicable covenant thresholds, borrowing-base availability, and any defaults or cross-defaults.
- Subsequent filings for actual financial results, transaction completion, and updated guidance.