Item
1.01 Entry into a
Material Definitive Agreement.
1.
Supplemental Indenture
On
December 27, 2007, Andrew Corporation (“Andrew”) entered into a supplemental
indenture (“Supplemental Indenture”) to the Indenture, dated as of August 8,
2003 (the “Indenture”), between Andrew and The Bank of New York Trust Company,
N.A. (formerly known as BNY Midwest Trust Company), as trustee, relating
to
Andrew’s 3¼% Convertible Subordinated Notes due 2013 (the
“Notes”). The Supplemental Indenture provides, among other things,
that as a result of the merger in which Andrew became a wholly-owned indirect
subsidiary of CommScope, Inc. (“CommScope”), the Notes are no longer convertible
into Andrew common stock but, on the terms and subject to the conditions
of the
Indenture and the Supplemental Indenture, are convertible, at the option
of the
Holders, into $986.15 in cash and 2.304159 shares of common stock, par
value
$0.01, of CommScope (“CommScope Common Stock”) per $1,000 principal amount of
Notes (subject to adjustment from time to time and payments in lieu of
fractional shares as provided in the Indenture and the Supplemental Indenture).
The foregoing description of the Supplemental Indenture is qualified in
its
entirety by reference to the text of the Supplemental Indenture, which
is
attached hereto as Exhibit 10.1 and is incorporated herein by
reference.
2.
Senior Credit Facilities
On
December 27, 2007, CommScope entered into a Credit Agreement, dated as of
December 27, 2007 (the “Senior Credit Agreement”), among CommScope, the lenders
named therein, and Bank of America, N.A., as Administrative Agent, Swing
Line
Lender and L/C Issuer. The Senior Credit Agreement provides for an
aggregate of up to $2,500,000,000 in senior secured credit facilities (the
“Senior Credit Facilities”), consisting of a $750,000,000 term loan A facility,
a $1,350,000,000 term loan B facility and a $400,000,000 revolving credit
facility. The proceeds from the borrowing of the term loan A facility
and the term loan B facility were used, together with cash on hand, to finance
the cash portion of the consideration for CommScope’s acquisition of Andrew, to
repay certain existing indebtedness of CommScope and Andrew, and to pay
transaction fees and expenses. The Senior Credit Facilities are guaranteed
by
CommScope’s domestic subsidiaries (other than certain inactive domestic
subsidiaries) and are secured by substantially all the assets of CommScope
and
the guarantor subsidiaries, including all of the capital stock of the guarantor
subsidiaries and up to 66% of the capital stock of certain of CommScope’s
foreign subsidiaries.
The
term
loan A facility was drawn in full at closing and is required to be repaid
by
CommScope in consecutive quarterly installments of $9,375,000 from March
31,
2010 to December 31, 2010, $18,750,000 from March 31, 2011 to December 31,
2011,
$56,250,000 from March 31, 2012 to December 31, 2012, and $103,125,000 on
each
quarterly payment date thereafter with a final payment of all outstanding
principal and interest on December 27, 2013. The term loan B facility
was drawn in full at closing and is required to be repaid by CommScope in
consecutive quarterly installments of $3,375,000 beginning March 31, 2008
and on
each quarterly payment date thereafter with a final payment of all outstanding
principal and interest on December 27, 2014. Borrowings under the
revolving credit facility may be used for working capital and other general
corporate purposes and are required to be repaid in full on December 27,
2013. At December 27, 2007, upon completion of the acquisition of
Andrew, CommScope had $400,000,000 of availability under the revolving credit
facility.
Outstanding
principal under the term loan B facility bears interest at a rate equal to,
at
CommScope’s option, either (1) the base rate (which is the higher of the then
current Federal Funds rate plus 0.5% or the prime rate most recently announced
by Bank of America, N.A., the administrative agent under the Senior Credit
Facilities) plus a margin of 1.50% or (2) the adjusted one, two, three or
six-month Eurodollar rate plus a margin of 2.50%. Outstanding
principal under the term loan A facility and the revolving credit facility
initially bears interest at a rate equal to, at CommScope’s option, either (1)
the base rate plus a margin of 1.25%, or (2) the adjusted one, two, three
or
six-month Eurodollar rate plus a margin of 2.25%. The undrawn portion
of the revolving credit facility is subject to an unused line fee calculated
initially at an annual rate of 0.50%. Beginning with reference to the
four-quarter period ending March 31, 2008, pricing under the term loan A
facility and the revolving credit facility and the unused line fee for the
revolving credit facility will be determined by reference to a pricing grid
based on CommScope’s consolidated leverage ratio for the four-quarter period
then most recently ended. Under the pricing grid, the applicable
margins for the term loan A facility and the revolving credit facility will
range from 0.75% to 1.25% for base rate loans and from 1.75% to 2.25% for
Eurodollar loans, and the unused line fee for the revolving credit facility
will
range from 0.375% to 0.50%. Outstanding letters of credit are subject
to an annual fee equal to the applicable margin for Eurodollar loans under
the
revolving credit facility as in effect from time to time, plus a fronting
fee on
the undrawn amount thereof at an annual rate of 0.25%.
The
term
loan A facility and the revolving credit facility may be prepaid at any time
without premium. The term loan B facility may be prepaid at any time
without premium, except that if CommScope completes either a repricing amendment
of the term loan B facility or prepays any portion of the term loan B facility
with the proceeds of new secured term loans, in either case during the first
year of the term loan B facility, and such amendment or prepayment results
in
lower pricing for the term loan B facility (or for the replacement loans,
in the
case of a prepayment) than the term loan B pricing then in effect, then
CommScope must pay a premium of 1.0% on the aggregate amount of the term
loan B
facility outstanding immediately prior to such amendment (or 1.0% on the
aggregate amount of the term loan B facility so prepaid, in the case of a
prepayment). The Senior Credit Facilities are subject to mandatory
prepayment with specified percentages of the net cash proceeds of certain
asset
dispositions, casualty events, and debt and equity issuances and with excess
cash flow, in each case subject to certain conditions.
The
Senior Credit Facilities contain covenants that restrict, among other things,
the ability of CommScope and its subsidiaries to create liens, incur
indebtedness and guarantees, make certain investments or acquisitions, merge
or
consolidate, dispose of assets, pay dividends, repurchase or redeem capital
stock and subordinated indebtedness, change the nature of their business,
enter
into certain transactions with affiliates, and make changes in accounting
policies or practices except as required by generally accepted accounting
principles. The Senior Credit Facilities also contain a consolidated
interest coverage ratio covenant, a consolidated leverage ratio covenant
and
limitations on annual capital expenditures. The Senior Credit
Facilities contain events of default including, but not limited to, nonpayment
of principal or interest, violation of covenants, breaches of representations
and warranties, cross-default to other indebtedness, bankruptcy and other
insolvency events, material judgments, certain ERISA events, actual or asserted
invalidity of loan documentation and certain changes of control of
CommScope.
CommScope
may request additional term loans or an increase to the revolving credit
facility, in an aggregate amount of up to $50,000,000, subject to certain
conditions and the receipt of commitments from existing or additional
lenders.
The
foregoing description of the Senior Credit Facilities is qualified in its
entirety by reference to the text of the Senior Credit Agreement, which is
attached hereto as Exhibit 10.2 and is incorporated herein by
reference.
3. Interest
Rate Swap Agreement
Effective
December 27, 2007, CommScope entered into an interest rate swap agreement
(the
“Swap Agreement”) with Calyon in order to mitigate its variable rate interest
risk on a portion of the term loans under the Senior Credit
Facilities. The Swap Agreement has an initial notional amount of
$1,500,000,000 and is scheduled to decline to $400,000,000 over a four-year
period ending December 31, 2011. Under the Swap Agreement, CommScope
has agreed to pay a fixed interest rate of 4.0775% on the applicable notional
amount through December 31, 2011 and will receive interest payments at a
variable rate based on three-month LIBOR on the applicable notional amount
through the same period. Net payments will be made or received
quarterly.
Item
2.01 Completion of
Acquisition or Disposition of Assets.
On
December 27, 2007, CommScope completed the acquisition of Andrew pursuant
to the
terms of the Agreement and Plan of Merger, dated as of June 26, 2007 (the
“Merger Agreement”), by and among CommScope, DJRoss, Inc. and
Andrew. Pursuant to the terms of the Merger Agreement, each of the
issued and outstanding shares of common stock, par value $0.01 per share,
of
Andrew was converted into the right to receive (i) $13.50 in cash,
and (ii) 0.031543 shares of CommScope Common Stock.
On
December 27, 2007, CommScope issued a press release announcing the completion
of
the merger with Andrew. A copy of this press release is attached as
Exhibit 99.1.
Item
9.01. Financial
Statements and Exhibits.
Set
forth
below are the financial statements relating to the completed acquisition
described above that are required to be filed as part of this Form
8-K:
(a) Financial
Statements of Business
Acquired.
The
financial statements required by this item will be filed by amendment not
later
than 71 calendar days after the date that this Form 8-K must be
filed.
(b) Pro
Forma Financial
Information.
The
financial information required by this item will be filed by amendment not
later
than 71 calendar days after the date that this Form 8-K must be
filed.
(d) Exhibits.
|
|
Exhibit 4.1
|
Indenture,
dated as of August 8, 2003, by and among Andrew Corporation and
The Bank
of New York Trust Company, N.A., formerly known as BNY Midwest
Trust
Company
|
|
|
Exhibit 10.1
|
First
Supplemental Indenture, dated as of December 27, 2007, by and among
Andrew Corporation and The Bank of New York Trust Company,
N.A.
|
|
|
Exhibit 10.2
|
Credit
Agreement, dated as of December 27, 2007, by and among CommScope,
Inc.,
Bank of America, as Administrative Agent, Swing Line Lender and
L/C
Issuer, the Other Lenders Party thereto, Bank of America Securities
LLC,
and Wachovia Capital Markets, LLC, as Joint Lead Arrangers and
Joint
Bookrunners, Wachovia Bank, National Association, as Syndication
Agent,
JPMorgan Chase Bank, N.A., Mizuho Corporate Bank, LTD. and Calyon
New York
Branch, as Co-Documentation
Agents
|
|
|
Exhibit
99.1
|
Press
release, dated
December 27, 2007, announcing the completion of the acquisition
of Andrew
Corporation
|