Middleby Announces Strategic Financing Transactions

Aug. 18, 2020
The Middleby Corporation, Inc. (NASDAQ: MIDD; “Middleby” or the “Company”), a leading worldwide manufacturer of equipment for the commercial foodservice, food processing, and residential kitchen industries, today announced that it has commenced a set of strategic financing transactions, including an amendment to its senior credit facility and the launch of a $550 million convertible notes offering. The Company also expects to enter into a related capped call hedge transaction, which will offset potential dilution from the conversion feature of the notes.

“Consummation of these strategic transactions will enhance our capital structure and provide greater financial flexibility as we lead our business into the future. Most importantly, these actions reinforce continued investment in our operating and strategic initiatives supporting longterm growth objectives,” commented Middleby Chief Executive Officer Tim Fitzgerald.

Overview of Credit Facility Amendment

* The amended credit agreement will provide for a senior secured credit facility in an aggregate principal amount of $3.1 billion, consisting of (i) a $2.75 billion multi-currency revolving credit facility and (ii) a $350 million term loan facility (after giving effect to the $400 million prepayment upon effectiveness of the amendment). The maturity date remains unchanged at January 31, 2025.
* The threshold leverage ratio restricting the incurrence of debt has been increased to 5.50 to 1.00 from 4.00 to 1.00 through the maturity of the facility.
* The borrowing cost under the senior credit facility remains unchanged by the amendment at total net debt leverage ratios of below 4.00 to 1.00. Pricing at newly established leverage tiers above 4.00 times increase to a maximum of LIBOR plus 250 basis points at the highest allowable borrowing levels.
* The amended credit agreement sets forth a secured net debt leverage ratio of 3.50 to 1.00, with an initial elevated period providing for a higher covenant of 4.50 to 1.00 times through March 2021 and 4.25 to 1.00 times through June 2021.
* At the end of the company’s fiscal second quarter, the company’s net debt as definedunde r the credit facility amounted to $1,786.7 million and the secured leverage ratio was 2.99 to 1.00. On a pro-forma basis, after reflecting the anticipated repayment of $400 million of the senior term loan upon effectiveness of the amendment, the net debt under the senior credit facility would amount to $1,386.7 million and the secured leverage ratio would amount to 2.32.
* Borrowing availability under existing facilities after giving effect to the contemplated transactions would amount to $1.4 billion.

The information in this press release is for informational purposes only and shall not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities.

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