Item 1.01 - Entry into a Material Definitive Agreement.
On December 30, 2020, Americold Realty Trust (the "Company") and Americold
Realty Operating Partnership, L.P. (the "Operating Partnership") entered into a
note and guaranty agreement (the "Note and Guaranty Agreement") with the
purchasers named therein (the "Purchasers"). The Note and Guaranty Agreement
provides for the private placement by the Operating Partnership of its
€400,000,000 1.62% Series D Guaranteed Senior Notes due January 7, 2031 (the
"Series D Notes") and its €350,000,000 1.65% Series E Guaranteed Senior Notes
due January 7, 2033 (the "Series E Notes" and, together with the Series D Notes,
the "Notes"). The Notes were issued on December 30, 2020. The Notes will pay
interest semiannually on January 7 and July 7 of each year, commencing on
July 7, 2021, until maturity.
The Operating Partnership may prepay at any time all, or from time to time any
part of, the Notes, in an amount not less than 5% of the aggregate principal
amount of the outstanding Notes in the case of a partial prepayment, at 100% of
the principal amount so prepaid plus a Make-Whole Amount (as defined in the Note
and Guaranty Agreement).
The Note and Guaranty Agreement contains a number of customary financial
covenants, including, without limitation, a maximum total leverage ratio, a
minimum fixed charge coverage ratio, a maximum total secured indebtedness ratio,
a minimum unsecured debt service coverage ratio and a maximum unsecured
indebtedness to qualified assets ratio. The financial covenants in the Note and
Guaranty Agreement are substantially similar to the financial covenants in the
Company's and the Operating Partnership's senior unsecured credit facilities.
Concurrently with the entry into the Note and Guaranty Agreement, each of the
Company's and Operating Partnership's existing note agreements (the "Existing
Note Agreements"), entered into with respect to prior issuances of senior
unsecured notes, was amended to conform its financial covenants and eligibility
criteria to those in the Note and Guaranty Agreement.
Subject to the terms of the Note and Guaranty Agreement and the Notes, upon
certain events of default, including, but not limited to, (i) a default in the
payment of any principal, Make-Whole Amount or interest under the Notes, (ii) a
default in the performance of the covenants in the Note and Guaranty Agreement,
the Notes, and the related guaranties, (iii) a default in the payment of certain
other indebtedness of the Operating Partnership, the Company or certain of their
subsidiaries, and (iv) bankruptcy events related to the Operating Partnership,
the Company and certain of their subsidiaries, the principal and accrued and
unpaid interest and the Make-Whole Amount on the outstanding Notes will become
due and payable at the option of the Purchasers.
The Operating Partnership's obligations under the Notes are fully and
unconditionally guaranteed by the Company and certain subsidiaries of the
Company.
The proceeds from the issuance of the Notes will be used to refinance existing
indebtedness and for working capital and general corporate purposes, including
to provide long term debt financing for the Acquisition (as defined below). The
Notes have not been and will not be registered under the Securities Act of 1933,
as amended (the "Securities Act"), and may not be offered or sold in the United
States absent registration or an applicable exemption from the registration
requirements under the Securities Act and applicable state securities laws. The
Operating Partnership offered and sold the Notes in reliance on the exemption
from registration provided by Section 4(a)(2) of the Securities Act.
The above summary of the Note and Guaranty Agreement and the amendments to the
Existing Note Agreements do not purport to be complete and are qualified in its
entirety by reference to the full text of the Note and Guaranty Agreement and
the amendments to the Existing Note Agreements. The Note and Guaranty Agreement,
including the form of Notes, is filed herewith as Exhibit 10.1 and is
incorporated herein by reference. The amendments to the Existing Note Agreements
are filed herewith as Exhibit 10.2 and Exhibit 10.3 and are incorporated herein
by reference.
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Item 2.01 - Completion of Acquisition or Disposition of Assets.
As previously disclosed, on October 13, 2020, the Company entered into a
Transaction Agreement (the "Transaction Agreement") by and among the Company,
the Operating Partnership, the subsidiaries of Company and Operating Partnership
set forth on Annex I attached thereto (such subsidiaries, collectively with
Company and Operating Partnership, the "Buyers"), Agro Merchants Global, L.P., a
Cayman Islands exempted limited partnership ("Seller Parent"), Agro Merchants
Intermediate Holdings, L.P., a Cayman Islands exempted limited partnership
("Seller Holdings"), the direct and indirect Subsidiaries of Seller Parent set
forth on Annex II attached thereto (such subsidiaries, collectively with Seller
Parent and Seller Holdings, the "Sellers" and each, a "Seller") and the direct
and indirect Subsidiaries of Seller Parent set forth on Annex III attached
thereto (such subsidiaries, collectively, the "Target Companies"). Pursuant to
the Transaction Agreement, the Buyers acquired all of the equity interests of
the Target Companies held by the Sellers (the "Acquisition").
On December 30, 2020, the Company closed the Acquisition. At closing, the Buyers
purchased and acquired all of the issued and outstanding stock of the Target
Companies held by the Sellers. The Acquisition is valued at approximately $1.699
billion based on the closing price of the Company's common shares as of December
29, 2020, which includes (i) repayment of approximately $570 million of in-place
debt of the Sellers or their affiliates, (ii) assumption by the Company of
approximately $111 million of in-place Seller capital leases and sale leaseback
financing obligations, (iii) the issuance of 14,166,667 common shares of the
Company (the "Acquisition Shares"), with an aggregate value of approximately
$512 million and (iv) $506 million of cash consideration, off-set by any cash on
hand net of debt-like items and working capital adjustments. The cash
consideration paid by the Company was funded using a portion of the net proceeds
from the Company's forward equity offering that closed on October 16, 2020 (with
the shares settling on December 29, 2020 (as described below)).
The foregoing summary of the Transaction Agreement and the Acquisition does not
purport to be complete and is qualified in its entirety by reference to the
terms and conditions of the Transaction Agreement, a copy of which was filed as
Exhibit 2.1 to the Company's Current Report on Form 8-K dated October 13, 2020
and which is incorporated herein by reference.
The Transaction Agreement is not intended to provide any other factual, business
or operational information about the parties thereto. The representations,
warranties and covenants contained in the Transaction Agreement were made only
for purposes of such Transaction Agreement and as of specific dates, were solely
for the benefit of the parties to such agreement, and may be subject to
limitations agreed upon by the contracting parties. Accordingly, investors and
shareholders should not rely on such representations and warranties as
characterizations of the actual state of facts or circumstances. Moreover,
information concerning the subject matter of such representations and warranties
may change after the date of the Transaction Agreement, which subsequent
information may or may not be fully reflected in the Company's public
disclosures.
Item 3.02 - Unregistered Sales of Equity Securities.
As described above, pursuant to the terms and subject to the conditions of the
Transaction Agreement, at closing, the Sellers received Acquisition Shares as
partial consideration for the Acquisition. The Acquisition Shares were issued
without registration under the Securities Act of 1933 (the "Securities Act") in
reliance on the private offering exemption provided by Section 4(a)(2) thereof.
In connection with such issuance, the Company has granted the Sellers certain
registration rights requiring the Company to file a registration statement with
the Securities and Exchange Commission covering the resale by the Sellers of the
Acquisition Shares. The Company has also agreed to enter into a separate lock-up
agreement restricting the Sellers' ability to sell the such Acquisition Shares
until May 17, 2021.
The disclosure in Item 2.01 of this Current Report is incorporated herein by
reference.
Item 7.01 - Regulation FD Disclosure.
On December 30, 2020, the Company issued a press release announcing the closing
of the Acquisition.
The information in this report is being furnished and shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise subject to the liabilities of such
section. The information in this report shall not be incorporated by reference
into any filing under the Securities Act of 1933, as amended, or the Exchange
Act, unless specifically incorporated by reference into any such filing. This
report will not be deemed an admission as to the materiality of any information
in this report that is disclosed in accordance with Regulation FD.
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Item 8.01 - Other Events
On October 16, 2020, the Company filed a Current Report on Form 8-K with the
Securities and Exchange Commission to disclose that on October 13, 2020, the
Company and Operating Partnership entered into (a) forward sales agreements
(collectively, the "Initial Forward Sale Agreements") with each of Citigroup
Global Markets Inc., BofA Securities, Inc. and Goldman Sachs & Co. LLC (or their
respective affiliates) (the "Forward Purchasers"), and (b) an underwriting
agreement (the "Underwriting Agreement") with Citigroup Global Markets Inc.,
BofA Securities, Inc. and Goldman Sachs & Co. LLC, as representatives of the
several underwriters named in Schedule A thereto (the "Underwriters"), the
Forward Purchasers and their respective affiliates, relating to the offer and
sale of up to 36,685,000 common shares of beneficial interest, $0.01 par value
per share at a public offering price of $38.00 per share, including an option to
purchase up to 4,785,000 additional common shares.
On November 9, 2020, the underwriters exercised in full their option to purchase
the additional 4,785,000 common shares (the "Option Shares") and the Company
entered into additional forward sale agreements with each Forward Purchaser
relating to the exercise of the Option Shares.
On December 29, 2020, the Company physically settled the Initial Forward Sale
Agreements in full by issuing an aggregate of 31,900,000 common shares to the
Forward Purchasers in exchange for net proceeds of approximately $1.17 billion.
Item 9.01 - Financial Statements and Exhibits.
The financial information required by Item 9.01(a) of Form 8-K in connection
with the Acquisition will be filed by amendment to this Current Report on Form
8-K within 71 calendar days after the date this Current Report on Form 8-K is
required to be filed with the SEC.
(d) Exhibits
Exhibit
No. Description
10.1 Note and Guaranty Agreement, dated as of December 30, 2020, by and
among the Operating Partnership, the Company and the Purchasers
10.2 Amendment No. 1 to the Note and Guaranty Agreement, dated as of
May 7, 2019, by and among the Operating Partnership, the Company and
the purchasers named therein.
10.3 Amendment No. 1 to the Note and Guaranty Agreement, dated as of
December 4, 2018, by and among the Operating Partnership, the Company
and the purchasers named therein.
99.1 Press Release dated December 30, 2020 announcing the closing of the
Acquisition
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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