NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO
DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
FOR
IMMEDIATE RELEASE
13 June
2024
RECOMMENDED CASH AND SHARE
OFFER
FOR
TYMAN PLC ("TYMAN")
BY
QUANEX BUILDING PRODUCTS CORPORATION ("QUANEX")
to be implemented by means of a
Scheme of Arrangement
under Part 26 of the Companies Act 2006
Quanex Material Contract
Disclosure
On 22 April 2024, the boards of
Quanex and Tyman announced that they had reached agreement on the
terms of a recommended cash and share offer for the entire issued
ordinary share capital of Tyman (the "Transaction"). It is intended
that the Transaction will be implemented by means of a scheme of
arrangement under Part 26 of the Companies Act 2006 (the
"Scheme").
On 11 June 2024, Tyman published a
shareholder circular relating to the Scheme (the "Scheme Document") and convening the
Court Meeting and the General Meeting.
Capitalised terms used but not
defined in this announcement have the meanings set out in the
Scheme Document.
Amendment to the Second
Amended and Restated Credit Agreement
Paragraph 8.2 (Quanex Group material contracts) of
Part 8 (Additional Information on
Tyman and Quanex) of the Scheme Document contains a summary
of the principal contents of certain material contracts, not being
a contract in the ordinary course of business, that have been
entered into by members of the Quanex Group between 22 April 2022
and the Latest Practicable Date.
On 12
June 2024, Quanex (acting as borrower), Wells
Fargo Bank, National Association ("Wells Fargo Bank", acting as agent,
swingline lender and issuing lender, the "Agent"), the other entities therein
specified in the capacities therein specified, and the lenders
parties thereto, entered into an amendment to the Second Amended
and Restated Credit Agreement, dated as of 6 July 2022 (the terms
of which have been summarised in the Scheme Document) (the
"Existing Credit
Agreement", and the Existing Credit Agreement as so amended,
the "Amended Credit
Agreement").
The Amended Credit Agreement will,
among other things: (1) increase the senior secured revolving
credit facility to an aggregate principal amount of US$475,000,000
(the "Revolving Credit
Facility"), which Revolving Credit Facility is expected to
include alternative currency, letter of credit and swing-line
sub-facilities of US$100,000,000, US$30,000,000 and US$15,000,000
respectively and (2) provide for a senior secured term loan A
facility in an aggregate principal amount of US$500,000,000 (the
"Term A Facility", and
together with the Revolving Credit Facility, the "Facilities"). The proceeds are intended
to be used in part, in lieu of the proceeds of the Interim
Facilities Agreement, to fund a portion of the purchase price for
the acquisition of Tyman. The terms of the Interim Facilities
Agreement (as further detailed in paragraph 12 (Financing arrangements relating to
Quanex) of Part 8 (Additional Information on Tyman and
Quanex) of the Scheme Document) continue to apply
notwithstanding Quanex's entry into the Amended Credit
Agreement.
Under the terms of the Amended
Credit Agreement, Quanex may request incremental increases of the
Facilities, provided that the total aggregate principal amount for
such increases shall not exceed an amount equal to the greater of
(1) US$310,000,000 and (2) 100% of consolidated EBITDA of Quanex
and its subsidiaries for the most recently completed four-fiscal
year period.
The maturity date of the Facilities
will be five years after the date on which the initial funding of
the Facilities occurs. The Term A Facility will amortize (on a
quarterly basis) at 5% per annum of the original principal amount
of the Term A Facility (with the remainder due at maturity). The
Term A Facility must be prepaid with 100% of the net cash proceeds
of the issuance or incurrence of debt (other than permitted debt)
and 100% of the net cash proceeds of all asset sales, insurance and
condemnation recoveries, and other asset dispositions by Quanex or
its restricted subsidiaries, subject to any exclusions or
conditions in the Amended Credit Agreement. Loans under the
Facilities may be prepaid at any time upon notice, subject to any
conditions requiring minimum amounts or multiples set forth in the
Amended Credit Agreement.
Loans under the Facilities will bear
interest, at Quanex's option, at (1) the Base Rate plus the
Interest Margin or (2) Adjusted Term SOFR plus the Interest Margin.
The definitions of "Base Rate" and "Adjusted Term SOFR" shall
remain the same as specified or defined in the Existing Credit
Agreement. The Interest Margin will range from 1.000% to 1.750% for
Base Rate Loans and 2.000 to 2.750% for Term SOFR Loans.
All material U.S. subsidiaries of
Quanex will guaranty the Facilities on terms consistent with the
Existing Credit Agreement. The obligations of Quanex and the
guarantors under the Facilities will be secured by first-priority
security interests on substantially all of their personal property,
on terms and subject to exceptions and limitations consistent with
the Existing Credit Agreement.
The Amended Credit Agreement will
contain customary representations and warranties, events of default
and covenants for transactions of this type and are generally
consistent with those in the Existing Credit Agreement, subject to
negotiated baskets and exceptions thereto as specified in the
Amended Credit Agreement.
Enquiries
Quanex
Scott Zuehlke - Senior Vice President, Chief Financial Officer and
Treasurer
+1 713 877 5327
UBS
(Sole Financial adviser to Quanex)
London: Joe Hannon, Romine Hakme, Josh
Chauhan
+44 20 7567 8000
New York: Simon Smith, Jane Zovak, Vijay Kumra
+1 212 713 2000
Joele Frank, Wilkinson Brimmer Katcher
(PR adviser to Quanex)
Arielle
Rothstein
+1 212 355 4449
Andrew Siegel
Lyle Weston
Travers Smith LLP is acting as
English legal adviser to Quanex and Foley & Lardner LLP is
acting as US legal adviser to Quanex in connection with the
Transaction.
Important notices about financial
advisers
UBS AG London Branch ("UBS") is authorised and regulated by
the Financial Market Supervisory Authority in Switzerland. It is
authorised by the Prudential Regulation Authority ("PRA") and subject to regulation in the
United Kingdom by the Financial Conduct Authority ("FCA") and limited regulation in the
United Kingdom by the PRA. UBS is acting exclusively as sole
financial adviser to Quanex and for no one else in connection with
the Transaction and will not be responsible to anyone other than
Quanex for providing the protections afforded to its clients nor
for providing advice in relation to the Transaction, the contents
of this announcement or any other matters referred to in this
announcement. Neither UBS nor any of its subsidiaries, branches or
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of UBS in connection with the Transaction, this announcement and
any statement contained herein or otherwise.
No Offer or Solicitation
This announcement is for informational purposes only and is
not intended to and does not constitute an offer to sell or the
solicitation of an offer to subscribe for or buy or an invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
transaction or otherwise, nor shall there be any sale, issuance or
transfer of securities in any jurisdiction in contravention of
applicable law. In particular, this announcement is not an offer of
securities for sale into the United States or in any other
jurisdiction. No offer of securities shall be made in the United
States absent registration under the US Securities Act, or pursuant
to an exemption from, or in a transaction not subject to, such
registration requirements. Any securities issued in the Transaction
are anticipated to be issued in reliance upon an exemption from
such registration requirements pursuant to Section 3(a)(10) of the
US Securities Act.
The Transaction will be made solely by means of the Scheme
Document to be published by Tyman in due course, or (if applicable)
pursuant to an Offer Document to be published by Quanex, which (as
applicable) would contain the full terms and conditions of the
Transaction. Any decision in respect of, or other response to, the
Transaction, should be made only on the basis of the information
contained in such document(s) and the Definitive Proxy Statement.
As explained below, if Quanex ultimately seeks to implement the
Transaction by way of a Takeover Offer, that offer will be made in
compliance with applicable US laws and
regulations.
This announcement does not constitute a prospectus or a
prospectus exempted document.
This announcement has been prepared for the purpose of
complying with English law and the Takeover Code and the
information disclosed may not be the same as that which would have
been disclosed if this announcement had been prepared in accordance
with the laws of jurisdictions other than England and
Wales.
In
accordance with normal United Kingdom practice and pursuant to Rule
14e-5(b) under the US Exchange Act, Quanex or its nominees, or its
brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase, shares or other securities of
Tyman outside of the US, other than pursuant to the Transaction,
until the date on which the Transaction and/or Scheme becomes
Effective, lapses or is otherwise withdrawn. These purchases may
occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such
purchases or arrangements to purchase will be disclosed as required
in the UK, will be reported to a Regulatory Information Service and
will be available on the London Stock Exchange website
at www.londonstockexchange.com.
Overseas
jurisdictions
The release, publication or distribution of this announcement
in or into jurisdictions other than the United Kingdom may be
restricted by the laws of those jurisdictions and therefore persons
into whose possession this announcement comes should inform
themselves about, and observe, such restrictions. In particular,
the ability of persons who are not resident in the United Kingdom
to vote their Tyman Shares at the Court Meeting or General Meeting,
or to appoint another person as proxy to vote at the Court Meeting
or General Meeting on their behalf, may be affected by the laws of
the relevant jurisdictions in which they are located. Further
details in relation to the Overseas Shareholders will be contained
in the Scheme Document (or, if the Transaction is to be implemented
by a Takeover Offer, the Offer Document). Any failure to comply
with any such restrictions may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the Transaction disclaim any responsibility or liability for the
violation of such restrictions by any person.
Unless otherwise determined by Quanex or required by the
Takeover Code, and permitted by applicable law and regulation, the
Transaction will not be made available, directly or indirectly, in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction and no person may vote in favour of
the Scheme by any such means from within a Restricted Jurisdiction
or any other jurisdiction if to do so would constitute a violation
of the laws of that jurisdiction and no person may vote in favour
of the Transaction by use of mail or any other means of
instrumentality (including, without limitation, facsimile, email or
other electronic transmission, telex or telephone) of interstate or
foreign commerce of, or any facility of a national, state or other
securities exchange of, any Restricted
Jurisdiction.
Accordingly, copies of this announcement and all documents
relating to the Transaction are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in, into or from a Restricted Jurisdiction where to do so
would violate the laws in that jurisdiction, and persons receiving
this announcement and all documents relating to the Transaction
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction. Doing so may render invalid any related purported
vote in respect of the Transaction. If the Transaction is
implemented by way of a Takeover Offer (unless otherwise permitted
by applicable law or regulation), the Transaction may not be made,
directly or indirectly, in or into, or by use of mail or any other
means or instrumentality (including, without limitation, facsimile,
email or other electronic transmission, telex or telephone) of
interstate or foreign commerce of, or any facility of a national,
state or other securities exchange of, any Restricted Jurisdiction
and the Transaction will not be capable of acceptance by any such
use, means, instrumentality or facilities from within any
Restricted Jurisdiction.
The availability of the Transaction or of New Quanex Shares
pursuant to the Transaction to Tyman Shareholders who are not
resident in the United Kingdom or the ability of those persons to
hold such shares may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not
resident in the United Kingdom should inform themselves of, and
observe, any applicable requirements.
The Transaction shall be subject to English law and the
jurisdiction of the Court and to the applicable requirements of the
Takeover Code, the Panel, the London Stock Exchange, the FCA, the
Listing Rules and the Registrar of Companies.
Additional information for US
investors in Tyman
Tyman Shareholders in the United States should note that the
Transaction relates to the securities of a UK company and is
proposed to be effected by means of a scheme of arrangement under
English law. This announcement, the Scheme Document and certain
other documents relating to the Transaction have been or will be
prepared in accordance with English law, the Takeover Code and UK
disclosure requirements, format and style, all of which differ from
those in the United States. A transaction effected by means of a
scheme of arrangement is not subject to the tender offer rules
under the US Exchange Act. Accordingly, the Transaction is subject
to the disclosure requirements of and practices applicable in the
United Kingdom to schemes of arrangement, which differ from the
disclosure requirements of the United States tender offer rules.
If, in the future, Quanex exercises the right to implement the
Transaction by way of a Takeover Offer and determines to extend the
offer into the United States, the Transaction will be made in
compliance with applicable United States laws and regulations,
including any applicable exemptions under the US Securities Act or
US Exchange Act.
Tyman's financial statements, and all financial information
that may be included in the Scheme Document, or any other documents
relating to the Transaction, have been or will be prepared in
accordance with International Financial Reporting Standards and may
not be comparable to financial statements of companies in the
United States or other companies whose financial statements are
prepared in accordance with US generally accepted accounting
principles ("US GAAP"). The
financial information included in the Scheme documentation in
relation to Quanex has been or will have been prepared in
accordance with US GAAP, except as otherwise specified
therein.
It
may be difficult for US holders to enforce their rights and claims
arising out of the US federal securities laws, since Tyman is
located outside of the US, and some or all of its officers and
directors may be residents of countries other than the US. US
holders may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of US securities laws.
Further, it may be difficult to compel a non-US company and its
affiliates to subject themselves to a US court's jurisdiction or
judgment.
The New Quanex Shares to be issued pursuant to the Transaction
have not been registered under the US Securities Act, and may not
be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the US
Securities Act. The New Quanex Shares to be issued pursuant to the
Transaction are expected to be issued in reliance upon an exemption
from such registration requirements pursuant to Section 3(a)(10) of
the US Securities Act. If, in the future, Quanex exercises its
right to implement the Transaction by way of a Takeover Offer or
otherwise in a manner that is not exempt from the registration
requirements of the US Securities Act, such issuance of New Quanex
Shares will be made in compliance with applicable US laws and
regulations. In this event, Tyman Shareholders are urged to read
these documents and any other relevant documents filed with the
SEC, as well as any amendments or supplements to those documents,
because they will contain important information. Such documents
will be available free of charge at the SEC's website at
www.sec.gov or by directing a request to Quanex's Investor
Relations team identified above.
New Quanex Shares issued to persons other than "affiliates" of
Quanex (defined as certain control persons, within the meaning of
Rule 144 under the US Securities Act) will be freely transferable
under US federal securities laws and regulations following the
Transaction. Persons (whether or not US persons) who are or will be
"affiliates" of Quanex within 90 days prior to, or after, the
Effective Date will be subject to certain transfer restrictions
relating to the New Quanex Shares under US federal securities laws
and regulations.
Forward-looking
statements
This announcement may contain "forward-looking statements".
These statements are based on the current expectations of the
management of Quanex and are naturally subject to uncertainty and
changes in circumstances. The forward-looking statements contained
in this document include statements relating to the expected
effects of the Transaction, the expected timing and scope of the
Transaction, and other statements other than historical facts.
Forward-looking statements include statements typically containing
words such as "will", "may", "should", "believe", "intends",
"expects", "anticipates", "targets", "estimates" and words of
similar import and including statements relating to future capital
expenditures, expenses, revenues, economic performance, financial
conditions, dividend policy, losses and future prospects and
business and management strategies and the expansion and growth of
the operations of Quanex following completion of the Transaction.
Although Quanex believes that the expectations reflected in such
forward-looking statements are reasonable, Quanex can give no
assurance that such expectations will prove to be correct. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward looking statements. These
factors include: the possibility that the Transaction will not be
completed on a timely basis or at all, whether due to the failure
to satisfy the conditions of the Transaction (including approvals
or clearances from regulatory and other agencies and bodies) or
otherwise, general business and economic conditions globally,
industry trends, competition, changes in government and other
regulation, changes in political and economic stability,
disruptions in business operations due to reorganization
activities, interest rate and currency fluctuations, the inability
of the combined company to realize successfully any anticipated
synergy benefits when (and if) the Transaction is implemented, the
inability of the Enlarged Group to integrate successfully Quanex's
and Tyman's operations when (and if) the Transaction is implemented
and the Enlarged Group incurring and/or experiencing unanticipated
costs and/or delays or difficulties relating to the Transaction
when (and if) it is implemented. Additional information concerning
these and other risk factors is contained in the Risk Factors
sections of the Proxy Statement Quanex filed with the SEC on June
6, 2024 and Quanex's most recent reports on Form 10-K and Form
10-Q, the contents of which are not incorporated by reference into,
nor do they form part of, this announcement.
These forward-looking statements are based on numerous
assumptions regarding the present and future business strategies of
such persons and the environment in which each will operate in the
future. By their nature, these forward-looking statements involve
known and unknown risks, as well as uncertainties because they
relate to events and depend on circumstances that will occur in the
future. The factors described in the context of such
forward-looking statements in this announcement may cause the
actual results, performance or achievements of any such person, or
industry results and developments, to be materially different from
any results, performance or achievements expressed or implied by
such forward-looking statements. No assurance can be given that
such expectations will prove to have been correct and persons
reading this announcement are therefore cautioned not to place
undue reliance on these forward-looking statements which speak only
as at the date of this announcement. All subsequent oral or written
forward-looking statements attributable to Quanex or any persons
acting on its behalf are expressly qualified in their entirety by
the cautionary statement above. Quanex undertakes no obligation to
update publicly or revise forward-looking statements, whether as a
result of new information, future events or otherwise, except to
the extent required by applicable law, regulation or stock exchange
rules.
No profit forecasts or
estimates
No
statement in this announcement is intended as a profit forecast or
estimate for any period and no statement in this announcement
should be interpreted to mean that earnings or earnings per share
for Tyman or Quanex for the current or future financial years would
necessarily match or exceed the historical published earnings or
earnings per share for Tyman or Quanex.
Disclosure requirements of
the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in 1 per cent. or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the offer period and, if later, following the
announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 p.m. (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 p.m. (London time) on the 10th
business day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or
becomes, interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 p.m.
(London time) on the business day following the date of the
relevant dealing.
If
two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of
whose relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication of this
announcement and the Amended Credit Agreement on
website
Copies of this announcement and the Amended Credit Agreement
will be made available, free of charge, subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions on Quanex's website at https://www.roadto2b.com/ by
no later than 12:00 p.m. (London time) on the Business Day
following this announcement.
For the avoidance of doubt, the contents of this website and
any website accessible from hyperlinks on this website are not
incorporated into, and do not form part of, this
announcement.
Information relating
to Tyman Shareholders
Please be aware that addresses, electronic addresses and
certain information provided by Tyman Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Tyman may be provided to Quanex during the
Offer Period as required under Section 4 of Appendix 4 of the
Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede
them.
General
If
you are in any doubt about the contents of this announcement or the
action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor or independent financial adviser duly
authorised under FSMA if you are resident in the United Kingdom or,
if not, from another appropriate authorised independent financial
adviser.