RADNOR, Pa., April 3, 2023 /PRNewswire/ — FXI Holdings, Inc. (the “Company”) announced today the commencement of (i) an offer (the “Exchange Offer”) to all Eligible Holders (as defined below) of its 7.875% Senior Secured Notes due 2024 (the “Existing 2024 Notes”) to exchange any and all of the $504,746,000 in aggregate principal amount of outstanding Existing 2024 Notes for a combination of newly issued 12.250% Senior Secured Notes due 2026 (the “New 2026 Notes”) and cash and (ii) a related consent solicitation (the “Consent Solicitation”) whereby the Company is soliciting, and holders of Existing 2024 Notes who tender pursuant to the Exchange Offer are required to deliver, consents to amend the indenture governing the Existing 2024 Notes (the “Existing 2024 Notes Indenture”) to, among other things, eliminate substantially all of the restrictive covenants, certain of the default provisions and certain other provisions contained in the Existing 2024 Notes Indenture (the “Proposed Amendments”) and to release all of the collateral securing the Existing 2024 Notes (the “Collateral Release”). The Company must receive consents from holders representing (i) the majority of the aggregate principal amount of Existing 2024 Notes outstanding to adopt the Proposed Amendments and (ii) 662/3% in aggregate principal amount of Existing 2024 Notes outstanding to adopt the Collateral Release.
The Company and the guarantors of the Existing 2024 Notes have entered into a transaction support agreement, dated as of March 13, 2023 (the “Transaction Support Agreement”), with holders of approximately $394.9 million in aggregate principal amount of Existing 2024 Notes, representing approximately 78.2% of the aggregate principal amount of Existing 2024 Notes outstanding (collectively, the “Support Parties”), pursuant to which the Support Parties have agreed, subject to the terms and conditions of the Transaction Support Agreement, to, among other things, validly tender (and not validly withdraw) all outstanding Existing 2024 Notes held by each such Support Party and deliver the related consents to the Proposed Amendments and Collateral Release in the Consent Solicitation. Accordingly, the Company expects that holders of at least 78.2% of the aggregate principal amount of Existing 2024 Notes outstanding will tender their Existing 2024 Notes and deliver their consents to the Proposed Amendments and Collateral Release. In addition to the applicable Settlement Consideration (as defined below), the Company has agreed to pay each Support Party a fee (the “Support Party Fee”) as consideration for their commitments.
In connection with the Exchange Offer and the Consent Solicitation, and pursuant to the Transaction Support Agreement, certain indirect shareholders of the Company will arrange an investment in the capital stock of an indirect parent of the Company in an aggregate amount of $50.0 million of cash consideration, which will, through a series of transactions, ultimately be contributed to the Company as common equity (the “Equity Investment” and, together with the Exchange Offer, the Consent Solicitation and the payment of the related fees and expenses, including the cash portion of the applicable Settlement Consideration as well as the Support Party Fee, the “Refinancing Transactions”).
Eligible Holders who validly tender (and do not validly withdraw) their Existing 2024 Notes and deliver their related consents at or prior to 5:00 p.m., New York City time, on April 17, 2023, unless extended by the Company (the “Early Tender Date”), will be eligible to receive $940 in aggregate principal amount of New 2026 Notes and $100 in cash, including a consent fee of $40 in cash (the “Consent Fee”), for each $1,000 in aggregate principal amount of Existing 2024 Notes tendered for exchange (the “Total Consideration”). Eligible Holders must tender their Existing 2024 Notes at or prior to the Early Tender Date in order to be eligible to receive the Consent Fee for such Existing 2024 Notes accepted in the Exchange Offer. Eligible Holders who validly tender (and do not validly withdraw) Existing 2024 Notes and deliver their related consents after the Early Tender Date and at or prior to 11:59 p.m., New York City time, on April 28, 2023, unless extended by the Company (the “Expiration Date”), will not be eligible to receive the Consent Fee and will only receive $940 in aggregate principal amount of New 2026 Notes and $60 in cash for each $1,000 in aggregate principal amount of Existing 2024 Notes tendered for exchange (the “Exchange Consideration” and, together with the Total Consideration, as applicable, the “Settlement Consideration”). In addition to the Settlement Consideration, the Company will pay in cash accrued and unpaid interest on the Existing 2024 Notes accepted in the Exchange Offer from the applicable latest interest payment date to, but not including, the consummation of the Exchange Offer, which is to occur promptly after the Expiration Date and is currently expected to be on May 1, 2023 (the “Settlement Date”). The Company intends to pay the cash portion of the Settlement Consideration and issue the New 2026 Notes to be delivered in connection with the Exchange Offer on the Settlement Date. Interest on the New 2026 Notes will accrue from the date of first issuance of the New 2026 Notes.
The consideration offered in the Exchange Offer and Consent Solicitation per $1,000 in aggregate principal amount of Existing 2024 Notes tendered is summarized below.
|
Title of Existing |
CUSIPs |
Aggregate |
Title of New 2026 |
Exchange |
Consent Fee |
Total Consideration |
|
7.875% Senior |
Rule 144A: 36120R AA7
Reg. S: U36251 AA1
IAI: 36120R AB5 |
$504,746,000 |
12.250% Senior |
$940 in aggregate $60 in cash |
$40 in cash |
$940 in aggregate principal |
Tenders of Existing 2024 Notes pursuant to the Exchange Offer may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on April 17, 2023, unless extended by the Company (the “Withdrawal Deadline”), but not thereafter. If an Eligible Holder validly withdraws its tendered Existing 2024 Notes prior to the Withdrawal Deadline, such Eligible Holder will be deemed to have revoked its consents and may not deliver a subsequent consent without re-tendering its Existing 2024 Notes.
The Company will not receive any cash proceeds from the Exchange Offer or the issuance of the New 2026 Notes in connection therewith. The Existing 2024 Notes acquired in the Exchange Offer will be retired and cancelled. The Company intends to use the Equity Investment and borrowings under its asset-based revolving credit facility to pay the cash portion of the applicable Settlement Consideration, accrued but unpaid interest on the Existing 2024 Notes and other fees and expenses related to the Refinancing Transactions, including the Support Party Fee.
The Company reserves the right to amend the terms of the Exchange Offer and Consent Solicitation in its sole discretion without extending the Early Tender Date or the Withdrawal Deadline or otherwise reinstating withdrawal rights, subject to applicable law. The Exchange Offer and the Consent Solicitation are subject to the satisfaction or waiver of certain conditions set forth in the offering memorandum and consent solicitation statement (the “Offering Memorandum”), including, among other things, Eligible Holders of at least 90% of the aggregate principal amount of Existing 2024 Notes outstanding validly tendering (and not validly withdrawing) their Existing 2024 Notes on or prior to the Expiration Date. Subject to applicable law, the Company expressly reserves the right, in its sole discretion, to amend the Exchange Offer and Consent Solicitation in any respect and to terminate the Exchange Offer and Consent Solicitation if any of the conditions of the Exchange Offer and Consent Solicitation are not satisfied by the Expiration Date. If the Exchange Offer is terminated at any time, the Existing 2024 Notes tendered pursuant to the Exchange Offer will be promptly returned to the tendering holders. The Company may, at any time prior to the Expiration Date, waive any condition to the Exchange Offer and Consent Solicitation in its sole discretion, subject to applicable law.
The Exchange Offer and Consent Solicitation are being made, and the New 2026 Notes are being offered and issued, pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations of the Securities and Exchange Commission (the “SEC”) promulgated thereunder and are not being registered under any state or foreign securities laws. The New 2026 Notes may not be offered or sold in the United States or to any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offer and Consent Solicitation are only being made, and the New 2026 Notes are only being offered and issued, to holders of Existing 2024 Notes who are (a) reasonably believed to be “qualified institutional buyers” as defined in Rule 144A under the Securities Act, (b) institutional accredited investors, as defined in SEC Rule 501(a)(1), (2), (3) or (7), or (c) not “U.S. persons,” as defined in Rule 902 under the Securities Act and are in compliance with Regulation S under the Securities Act (such holders, the “Eligible Holders”), and only Eligible Holders who have completed and returned the eligibility letter are authorized to receive or review the Offering Memorandum or to participate in the Exchange Offer and Consent Solicitation. None of the Company, the dealer manager and solicitation agent for the Exchange Offer and Consent Solicitation, the Exchange Agent (as defined below), the Information Agent (as defined below), the trustee or collateral agent for the Existing 2024 Notes or the trustee or collateral agent for the New 2026 Notes, or any affiliate of any of them, makes any recommendation as to whether any holder of Existing 2024 Notes should tender or refrain from tendering all or any portion of the principal amount of such holder’s Existing 2024 Notes for New 2026 Notes in the Exchange Offer. No one has been authorized by any of them to make such a recommendation. Eligible Holders should read carefully the Offering Memorandum before making an investment decision to participate in the Exchange Offer and the Consent Solicitation. In addition, Eligible Holders must make their own decisions as to whether to tender their Existing 2024 Notes in the Exchange Offer and provide their consents in the related Consent Solicitation.
The Refinancing Transactions may not be consummated on the terms described in this press release or at all. The complete terms and conditions of the Refinancing Transactions are set forth in the Offering Memorandum.
Only Eligible Holders may receive a copy of the Offering Memorandum and participate in the Exchange Offer and the Consent Solicitation. The Company has engaged Ipreo LLC to act as the exchange agent (in such capacity, the “Exchange Agent”) and information agent (in such capacity, the “Information Agent”) for the Exchange Offer. Questions concerning the Exchange Offer or the Consent Solicitation, or requests for additional copies of the Offering Memorandum or other related documents, may be directed to Ipreo LLC at [email protected]. Eligible Holders should also consult their broker, dealer, commercial bank, trust company or other institution for assistance concerning the Exchange Offer and the Consent Solicitation.
This communication is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security and does not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About FXI
FXI Holdings, Inc., is a leading bedding and comfort technologies provider, with extensive manufacturing capabilities and a broad North American operating footprint. The Company’s innovative and diverse product offerings cover the bedding, furniture, transportation and medical end markets, as well as a variety of technical products.
Cautionary Note Regarding Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of U.S. federal securities laws. Forward-looking statements are typically identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions or the negative of these words or expressions. All forward-looking statements are based upon the Company’s expectations and various assumptions. The Company’s expectations, beliefs, and projections are expressed in good faith and the Company believes there is a reasonable basis for them. However, no assurances can be made that these expectations, beliefs and projections will be achieved. Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, (i) the ability of the Company to consummate the Exchange Offer and the Consent Solicitation in a timely manner or at all; (ii) unpredictability of consumer demand in certain markets, which may be impacted by macro-economic circumstances; (iii) downturn in U.S. and global economic conditions; (iv) an increase in industry competition; (v) the successful integration of acquisitions, mergers and other business combinations and achieving expected synergies; (vi) the ability to fund future capital requirements or strategic acquisitions; (vii) hazards and risks inherent to the purchase, sale, use, production, storage and transportation of chemicals; (viii) foreign currency exchange rate fluctuations; (ix) the ability to attract and retain qualified personnel; (x) the Company’s relationships with its employees, labor unions that represent certain employees, key suppliers and major customers; (xi) price volatility for raw materials; (xii) failure to anticipate or meet changes in customer trends or successfully commercialize new products; (xiii) the financial condition of customers; (xiv) loss of business if customers shift their manufacturing operations offshore; (xv) the ability to comply with laws and regulations applicable to the Company’s business, including environmental, health and safety laws and regulations, in many jurisdictions; (xvi) exposure to lawsuits in the normal course of business; (xvii) the ability to comply with laws and regulations relating to customs, export controls, economic sanctions, anti-corruption and anti-bribery, in the U.S. and other jurisdictions; (xviii) the Company’s ability to protect and enforce its intellectual property; (xix) breaches in data security or other disturbances to information technology and other networks; (xx) risks related to the New 2026 Notes and the Company’s indebtedness; (xxi) effectiveness of internal controls over financial reporting; (xxii) disruptions in operations or decreases in consumer demand as a result of natural disasters, such as earthquakes, fire, power outages, floods and other catastrophic events, and as a result of man-made interruptions, such as terrorism; (xxiii) disruption in operations and supply chain impediments due to pandemics or disease outbreaks, such as the COVID-19 pandemic; (xxiv) the Company’s ability to respond to geopolitical events, including the conflict in Ukraine, as well as general economic conditions, including inflation; (xxv) the Company’s failure to maintain sufficient insurance coverage; and (xxvi) other risks and uncertainties, discussed in more detail in the Offering Memorandum.
You should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date of this press release and the Company undertakes no obligation to publicly update or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except where expressly required to do so by law.
Contact:
Julia Cohen
Prosek Partners
[email protected]
SOURCE FXI
