01—Abstract
Summary
Summary of the 8-K filed October 31, 2018. Cited figures are marked; the original filing is the authoritative source.
United Rentals, Inc. (URI) filed an 8-K on October 31, 2018, announcing the successful completion of its acquisition of Vander Holding Corporation for an aggregate purchase price of $2.1 billiona.
This strategic acquisition is expected to be financed, in part, through a new $1 billionb senior secured term loan facility. The company also announced updates to its 2018 guidance reflecting the consummation of the merger. Investors should note that the credit agreement for the new loan facility does not contain financial covenants, which could be a point of interest regarding future financial flexibility.
02—Key points
Key Highlights
- Completion of the acquisition of Vander Holding Corporation for $2.1 billion.
- Secured a new $1 billion senior secured term loan facility to help finance the acquisition and refinance existing debt.
- The new term loan facility matures on October 31, 2025.
- Interest rates on the term loan facility are based on LIBOR or a base rate plus a specified margin.
- The credit agreement for the new loan facility contains covenants that restrict certain corporate actions but notably does not include financial covenants.
- Proceeds from the term loan facility are also being used to pay related fees and expenses.
- URI has purchased representations and warranties insurance for the acquisition.
03—Questions
Frequently Asked Questions
What was the main purpose of this 8-K filing?
The main purpose of this 8-K filing was to announce the completion of United Rentals' acquisition of Vander Holding Corporation and the entry into a new $1 billion Credit and Guaranty Agreement, which includes a senior secured term loan facility.
How was the Vander Holding acquisition financed?
The acquisition was financed in part by a new $1 billion senior secured term loan facility. Proceeds were also used to refinance existing indebtedness of Vander Holding and its subsidiaries, and to cover related fees and expenses.
Are there any financial covenants in the new credit agreement?
No, the Credit and Guaranty Agreement for the new $1 billion term loan facility does not include any financial covenants. However, it does contain covenants that limit or restrict the ability of the company and its subsidiaries to incur additional indebtedness, incur additional liens, make restricted payments, and engage in mergers, acquisitions, and dispositions.
What is the maturity date for the new term loan facility?
The new senior secured term loan facility matures on October 31, 2025.
04—Continue