Item 1.01 Entry into a Material Definitive Agreement.
Credit Agreement
On November 30, 2010, ABM Industries Incorporated (“ABM”) entered into a Credit
Agreement (the “New Credit Agreement”) with Bank of America, N.A. (“Bank of America”), as
administrative agent, swing line lender and letter of credit issuer and the lenders party thereto.
The New Credit Agreement has a five-year term and provides for revolving loans, swingline loans and
letters of credit up to an aggregate of $650 million (the “New Credit Facility”). Subject to
certain conditions, at any time prior to maturity, ABM will be able to elect to increase the size
of the New Credit Facility up to a maximum of $850 million. The New Credit Agreement has a
maturity date of November 30, 2015.
The obligations of ABM and any designated borrowers under the New Credit Agreement are
guaranteed jointly and severally by ABM and certain current and future subsidiaries of ABM.
Interest on the borrowings under the New Credit Agreement is payable, at the option of ABM, at
either a “Base rate” or a “Eurodollar rate,” and with respect to swingline loans, an “IBOR rate,”
in each case plus an applicable margin and, with respect to Eurodollar rate borrowings, a mandatory
cost. Borrowings under the New Credit Agreement may be used to refinance existing indebtedness and
for general corporate purposes, including permitted acquisitions, working capital and capital
expenditures.
The New Credit Agreement contains customary affirmative and negative covenants for facilities
of its type, including, but not limited to, limitations on the incurrence of liens, asset
dispositions, investments, indebtedness, dividends, restricted payments and transactions with
affiliates. The New Credit Agreement requires ABM to meet certain financial tests, including (1) a
minimum consolidated net worth test, (2) a fixed charge coverage ratio test, and (3) a leverage
ratio test.
The New Credit Agreement contains customary events of default, including, but not limited to,
payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to
certain indebtedness, certain events of bankruptcy, certain events under ERISA, inability to pay
debts, issuance of writs or warrants of attachment against assets, material judgments, invalidity
of loan documents and changes of control. If an event of default occurs under the New Credit
Agreement, the agents and lenders under the New Credit Agreement will be entitled to take various
actions, including accelerating amounts due under the New Credit Facility.
Concurrent with the execution of the New Credit Agreement, ABM and Bank of America terminated
the Credit Agreement, dated as of November 14, 2007, by and among ABM, various financial
institutions and Bank of America, as administrative agent (the “Prior Credit Agreement”).
The foregoing summary of the New Credit Agreement does not purport to be complete and is
subject to, and qualified in its entirety by, the full text of the New Credit Agreement, which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Acquisition of The Linc Group
On December 1, 2010, ABM acquired The Linc Group, LLC (“TLG”) pursuant to the
Agreement and Plan of Merger, dated as of December 1, 2010 (the “Merger Agreement”), by and among
ABM, TLG, GI Manager L.P., as the Members Representative, and Lightning Services, LLC, a
wholly owned subsidiary of ABM (“Merger Sub”).
Pursuant to the Merger Agreement, Merger Sub merged with and into TLG, and TLG continued as
the surviving corporation and as a wholly owned subsidiary of ABM. The aggregate purchase price
for all of the outstanding limited liability company interests of TLG was $300 million in cash,
subject to certain adjustments as set forth in the Merger Agreement. The Merger Agreement
contained certain customary representations and warranties, and the parties have agreed to certain
covenants.
The foregoing summary of the Merger Agreement and the transactions contemplated thereby does
not purport to be complete and is subject to, and qualified in its entirety by, the full text of
the Merger Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
The Merger Agreement contains representations and warranties by ABM and TLG made solely for
the benefit of the other. The assertions embodied in those representations and warranties are
qualified by information in confidential disclosure schedules that the parties have exchanged in
connection with signing the Merger Agreement. Moreover, certain representations and warranties in
the Merger Agreement were made as of a specified date, may be subject to a contractual standard of
materiality different from what might be viewed as material to stockholders or may have been used
for the purpose of allocating risk between the parties rather than establishing matters as facts.
Accordingly, the representations and warranties in the Merger Agreement should not be relied on by
any persons as characterizations of the actual state of facts about the parties at the time they
were made or otherwise.
Item 1.02 Termination of a Material Definitive Agreement.
In connection with entering into the New Credit Agreement, on November 30, 2010, ABM
terminated the Prior Credit Agreement. The Prior Credit Agreement was terminated because it has
been replaced with the New Credit Facility, as discussed in Item 1.01 under the heading “Credit
Agreement” above.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The disclosure required by this item is included in Item 1.01 under the heading “Acquisition
of The Linc Group” and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant
The disclosure required by this item is included in Item 1.01 under the heading “Credit
Agreement” and is incorporated herein by reference.
Item 8.01. Other Events.
On December 1, 2010, ABM issued a press release relating to ABM’s acquisition of TLG, which is
filed as Exhibit 99.1 to this Current Report on Form 8-K, and issued a press
release announcing the refinancing described above, which is filed as Exhibit 99.2 to this Current
Report on Form 8-K.