How much is nVent paying for the acquisition, and how is it being financed?

The aggregate purchase price is $695 million, subject to customary adjustments. nVent Finance and nVent intend to borrow the full $500.0 million available under the Term Loan Facility to finance a portion of the price and related fees and expenses.

Is the term loan currently drawn?

No. As of June 21, 2024, no loans were outstanding under the Term Loan Facility. Funding depends on the acquisition closing and the satisfaction or waiver of specified conditions.

What happens to the loan commitment if the acquisition does not close?

The lenders' commitment expires on the earliest of several events, including mutual termination of the Purchase Agreement, five business days after the Purchase Agreement's 'End Date,' public announcement of abandonment of the acquisition, or termination of nVent's obligations under the Purchase Agreement.

What are the key terms and covenants of the loan?

The facility matures two years after the term loans are made and bears interest at an adjusted base rate or adjusted term SOFR plus an applicable margin, based on nVent's net leverage ratio or nVent Finance's public debt rating. Covenants cap consolidated debt to EBITDA at 3.75 to 1.00 (or 4.25 to 1.00 for four testing periods after certain material acquisitions), require EBITDA to cash interest of at least 3.00 to 1.00, and restrict liens, mergers, acquisitions and subsidiary debt.

NVT 8-K: Financial Events

01—Abstract

Summary

Summary of the 8-K filed June 24, 2024. Cited figures are marked; the original filing is the authoritative source.

nVent Electric plc entered into a Term Loan Agreement on June 21, 2024, to help finance its previously announced acquisition of Trachte, LLC's parent company, Warrior Intermediate Parent, LLC.

The Purchase Agreement, dated June 5, 2024, sets an aggregate purchase price of $695 million^a, subject to customary adjustments. The acquisition is being pursued through a Membership Purchase Interest Agreement with Warrior Ultimate Parent, LLC, Warrior Intermediate Parent, LLC, and Hoffman Schroff Holdings, Inc. The financing is a two-year, $500.0 million senior unsecured term loan facility, with nVent Finance S.à r.l. as borrower and nVent as guarantor. No loans were outstanding as of June 21, 2024, and nVent Finance and nVent intend to borrow the full $500.0 million to fund a portion of the purchase price and related fees and expenses.

Funding is conditioned on the acquisition closing substantially concurrently, among other conditions, including the absence of a material adverse effect on the Company since June 5, 2024. Ticking fees of 0.15%^b per annum on undrawn commitments begin accruing September 4, 2024. The facility carries interest at an adjusted base rate or adjusted term SOFR plus an applicable margin, and can be prepaid without penalty or premium, subject to customary breakage costs.

It includes financial covenants capping the consolidated debt-to-EBITDA ratio at 3.75 to 1.00 (or 4.25 to 1.00 for four testing periods in connection with certain material acquisitions) and requiring a minimum EBITDA-to-cash-interest ratio of 3.00 to 1.00. Covenants also restrict liens, mergers, acquisitions and subsidiary debt.

02—Key points

Key Highlights

nVent will acquire Trachte, LLC's parent company for an aggregate purchase price of $695 million, subject to customary adjustments under the June 5, 2024 Purchase Agreement.
nVent Finance S.à r.l. entered into a two-year, $500.0 million senior unsecured Term Loan Facility on June 21, 2024, guaranteed by nVent Electric plc.
The full $500.0 million is intended to finance a portion of the purchase price and related fees and expenses; no loans were outstanding as of June 21, 2024.
Borrowing is conditioned on the acquisition closing substantially concurrently with funding, among other conditions, including no material adverse effect on the Company since June 5, 2024.
Ticking fees of 0.15% per annum on undrawn commitments begin accruing September 4, 2024, until funding or commitment termination.
Financial covenants require debt-to-EBITDA of no more than 3.75 to 1.00 (or 4.25 to 1.00 for four testing periods after certain material acquisitions) and EBITDA-to-cash-interest of at least 3.00 to 1.00.
Loans may be prepaid voluntarily without penalty or premium, subject to minimum amounts and customary breakage costs.

03—Questions

Frequently Asked Questions

How much is nVent paying for the acquisition, and how is it being financed?
The aggregate purchase price is $695 million, subject to customary adjustments. nVent Finance and nVent intend to borrow the full $500.0 million available under the Term Loan Facility to finance a portion of the price and related fees and expenses.
Is the term loan currently drawn?
No. As of June 21, 2024, no loans were outstanding under the Term Loan Facility. Funding depends on the acquisition closing and the satisfaction or waiver of specified conditions.
What happens to the loan commitment if the acquisition does not close?
The lenders' commitment expires on the earliest of several events, including mutual termination of the Purchase Agreement, five business days after the Purchase Agreement's 'End Date,' public announcement of abandonment of the acquisition, or termination of nVent's obligations under the Purchase Agreement.
What are the key terms and covenants of the loan?
The facility matures two years after the term loans are made and bears interest at an adjusted base rate or adjusted term SOFR plus an applicable margin, based on nVent's net leverage ratio or nVent Finance's public debt rating. Covenants cap consolidated debt to EBITDA at 3.75 to 1.00 (or 4.25 to 1.00 for four testing periods after certain material acquisitions), require EBITDA to cash interest of at least 3.00 to 1.00, and restrict liens, mergers, acquisitions and subsidiary debt.

04—Continue

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