8-KMaterial AgreementsFinancial EventsExhibits & Filings

EMCOR Group, Inc. 8-K Report, Material Agreement (Sep 24, 2007)

Filed September 24, 2007For Securities:EME

Summary

EMCOR Group, Inc. has filed an 8-K report detailing a significant new financing arrangement and an amendment to its existing credit facility. On September 19, 2007, the company entered into a $300 million Term Loan Agreement with Bank of Montreal, which can be expanded by an additional $150 million under certain conditions. The primary purpose of this new loan was to finance a portion of the acquisition of FR X Ohmstede Acquisition Co. This new debt is secured by substantially all of the company's U.S. subsidiaries' assets and is guaranteed by these subsidiaries. Furthermore, EMCOR also amended its existing Amended and Restated Credit Agreement. This amendment, effective the same day, permitted the company to enter into the new term loan and proceed with the Ohmstede acquisition. The existing credit facility provides for up to $375 million in revolving credit. Investors should note that the collateral securing the new term loan also secures the obligations under the revolving credit facility, indicating a consolidated collateral approach for these significant debt instruments.

Key Highlights

  • 1EMCOR Group entered into a $300 million Term Loan Agreement dated September 19, 2007.
  • 2The term loan has the potential to increase by an additional $150 million, subject to lender consent.
  • 3Proceeds from the term loan were used to finance part of the acquisition of FR X Ohmstede Acquisition Co.
  • 4The new term loan is secured by substantially all assets of the company and its U.S. subsidiaries.
  • 5The company's U.S. subsidiaries have provided guarantees for the term loan.
  • 6EMCOR also amended its existing credit agreement to permit the new term loan and acquisition.
  • 7The existing credit agreement provides a revolving credit facility of up to $375 million.

Frequently Asked Questions

The primary purpose of the $300 million term loan is to fund a portion of the acquisition of FR X Ohmstede Acquisition Co., as well as associated costs and expenses.

The term loan is secured by substantially all of the assets of EMCOR Group, Inc. and substantially all of the assets of its U.S. subsidiaries, as detailed in a Second Amended and Restated Security Agreement and Pledge Agreement.

The final payment for the term loan, including all outstanding principal and interest, is due on October 17, 2010.

The amendment to the Credit Agreement, effective September 19, 2007, was necessary to permit EMCOR to enter into and borrow under the new Term Loan Agreement and to proceed with the acquisition of Ohmstede. It ensures the new financing aligns with their existing credit structure.