MEC 8-K
Mayville Engineering Company, Inc. (MEC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 C.F.R. §230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 C.F.R. §240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 C.F.R. §240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 C.F.R. §240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 | Entry into a Material Definitive Agreement. |
On May 23, 2025, Mayville Engineering Company, Inc. (the “Company”), Accu-Fab, LLC (“Accu-Fab”) and Tide Rock YieldCo, LLC (“Seller”) entered into a Purchase Agreement (the “Purchase Agreement”), pursuant to which, subject to the satisfaction or waiver of the conditions contained therein, the Company will acquire all of the issued and outstanding limited liability company interests of Accu-Fab (the “Acquisition”) for a total consideration of $140.5 million, subject to customary adjustments including a net working capital adjustment. Accu-Fab is a vertically integrated contract manufacturer providing technology-driven, cutting-edge metal fabrication solutions to large OEMs. Accu-Fab offers value-added services that include design, engineering, sheet metal fabrication and integration, and specialized finishing. Accu-Fab serves as a supplier to major OEMs in the critical power infrastructure, data center and renewable energy end-markets.
The Acquisition, which has been approved by the Company’s Board of Directors, is expected to close in the third quarter of 2025, subject to the satisfaction or waiver of certain customary closing conditions, including, among other things: (i) the accuracy of the representations and warranties of each party to the Purchase Agreement, subject to certain materiality qualifications; (ii) the performance by each party of its obligations and covenants in all material respects; (iii) the expiration of any waiting period applicable to the Acquisition under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; (iv) the absence of any applicable law or order prohibiting the Acquisition; and (v) the absence of any litigation or similar proceeding relating to the Acquisition.
The Purchase Agreement contains customary representations, warranties and covenants by each party that are subject, in some cases, to specified exceptions and qualifications contained in the Purchase Agreement. The covenants relate to, among other things, the following: (i) Accu-Fab’s obligation to operate its and its subsidiaries’ business in the ordinary course between execution of the Purchase Agreement and the closing of the Acquisition; (ii) Accu-Fab’s obligation to refrain, and to cause Accu-Fab’s subsidiaries to refrain, from taking certain types of actions between execution of the Purchase Agreement and the closing of the Acquisition without the Company’s prior written consent; and (iii) each party’s obligation to use reasonable best efforts to obtain certain waivers, consents and approvals, to effect certain filings, and to take certain other actions, necessary to complete the Acquisition.
The Purchase Agreement may be terminated by mutual written agreement of the Company and Seller or by either the Company or Seller in limited circumstances, including, among other things, (i) certain uncured breaches of any representation, warranty, covenant or obligation in the Purchase Agreement by the other party; (ii) failure to complete the Acquisition within 90 days of the date of the Purchase Agreement; and (iii) the existence of a law or an order prohibiting the Acquisition.
The Company intends to finance the Acquisition through cash on hand and by borrowing under its existing $250 million credit agreement.
The Purchase Agreement and the press release issued by the Company in connection with the execution of the Purchase Agreement are filed as exhibits to this Current Report on Form 8-K and are incorporated herein by reference. The summary of the material provisions of the Purchase Agreement set forth above is qualified in its entirety by reference to the Purchase Agreement filed as an exhibit hereto. The representations and warranties contained in the Purchase Agreement were made by the parties to each other as of specific dates and the assertions embodied in these representations and warranties were made solely for purposes of the Purchase Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating their terms. Moreover, certain representations and warranties may not be accurate or complete as of any specified date because they are subject to a contractual standard of materiality that is different from certain standards generally applicable to shareholders or were used for the purpose of allocating risk between the parties rather than establishing matters as facts. Based upon the foregoing reasons, investors should not rely on the representations and warranties as statements of factual information.
Item 9.01.Financial Statements and Exhibits.
| (a) | Not applicable. |
| (b) | Not applicable. |
| (c) | Not applicable. |
(d)Exhibits. The exhibit listed in the exhibit index below is being filed herewith.
EXHIBIT INDEX
Exhibit Number | Description | |
2 | ||
99 | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
___________________
* The disclosure schedules and similar attachments to this agreement are not being filed herewith. The registrant agrees to furnish supplementally a copy of any such schedules or attachments to the Securities and Exchange Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MAYVILLE ENGINEERING COMPANY, INC. | ||
Date: May 27, 2025 | By: | /s/ Sean P. Leuba |
Sean P. Leuba | ||
Senior Vice President, General Counsel and Secretary | ||
Exhibit 2
________________________________________________________________________
PURCHASE AGREEMENT
by and among
MAYVILLE ENGINEERING COMPANY, INC.,
and
TIDE ROCK YIELDCO, LLC
________________________________________________________________________
TABLE OF CONTENTS
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EXHIBIT ADEFINITIONS
EXHIBIT BRWI POLICY
EXHIBIT CWORKING CAPITAL
EXHIBIT DGENERAL RELEASE
EXHIBIT ERESTRICTIVE COVENANT AGREEMENT
EXHIBIT FTRANSITION SERVICES
EXHIBIT GPARTICIPANT GENERAL RELEASE
ANNEX IILLUSTRATIVE WORKING CAPITAL SCHEDULE
ANNEX II | EXAMPLES FOR CLOSING WORKING CAPITAL ADJUSTMENT |
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this “Agreement”) is dated as of May 23, 2025 by and among Mayville Engineering Company, Inc., a Wisconsin corporation (“Buyer”), Accu-Fab, LLC, a Delaware limited liability company (“Company”), and Tide Rock YieldCo, LLC, a Delaware limited liability company (“Seller”). The parties hereto are individually each a “Party” and collectively the “Parties.” Exhibit A contains definitions of certain terms used in this Agreement.
RECITALS
A.Seller owns all of the issued and outstanding Equity Interests of Company (the “Interests”).
B.Seller desires to sell, and Buyer desires to purchase, the Interests for the consideration, on the terms and subject to the conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants, obligations and agreements contained herein, and intending to be legally bound hereby, the Parties agree as follows:
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are properly so withheld by Buyer and paid to the applicable Governmental Authority, such amounts withheld shall be treated for all purposes of this Agreement as having been paid to the recipient in respect of which such deduction and withholding was made by Buyer.
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to prepare, or cause the Company to prepare, the Closing Statement in accordance with Section 2.2. No physical inventory shall be taken for purposes of the determination of the Estimated Closing Working Capital.
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Except as set forth in the corresponding sections of the Disclosure Schedule, Seller represents and warrants to Buyer as of the date hereof and as of the Closing as set forth in this ARTICLE 3:
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THE BUSINESS OF THE GROUP COMPANIES, INCLUDING ALL INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO BUYER, WHETHER ORALLY OR IN WRITING, IN CERTAIN “DATA ROOMS,” MANAGEMENT PRESENTATIONS, “BREAK-OUT” DISCUSSIONS, RESPONSES TO QUESTIONS SUBMITTED ON BEHALF OF BUYER OR IN ANY OTHER FORM, IN EXPECTATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. ANY SUCH OTHER REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED.
Except as set forth in the corresponding sections of the Disclosure Schedule, Company represents and warrants to Buyer as of the date hereof and as of the Closing as set forth in this ARTICLE 4:
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authorized, and when executed and delivered by Company (assuming the due authorization, execution and delivery of the Ancillary Documents by Buyer as applicable), the Ancillary Documents will constitute legal, valid and binding obligations of Company, enforceable against Company in accordance with their respective terms subject to Customary Exceptions.
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provides to any Group Company or on which any Group Company is dependent on Seller or any of its Affiliates (other than a Group Company) and (b) all obligations or business relationships involving any Group Company, on the one hand, and Seller, any Affiliate of Seller, or any officer of any Group Company (each, an “Insider”), on the other hand. No Insider has any direct or indirect ownership interest in (i) any Person that does business, or is competitive, with any Group Company or (ii) any material asset that is used by any Group Company.
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any real property. All Permits held by each Group Company are listed in Section 4.12 of the Disclosure Schedule and are in full force and effect. Except for past violations for which a Group Company is not subject to any current Liability and cannot become subject to any future Liability, no material violations are occurring, or have occurred, in respect of any Permits held by such Group Company. No proceeding is pending or, to the Knowledge of Company, threatened to revoke or limit any Permit held by a Group Company. Since the Reference Date, no Group Company has received any written notice from any Governmental Authority regarding a violation of any term or requirement of any Permit held by such Group Company.
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campaign, and to the Knowledge of Company, no facts or conditions exist that would reasonably be expected to result in any such campaign.
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Buyer hereby represents and warrants to Company and Seller as of the date hereof and as of the Closing as follows:
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valid authorization, execution and delivery of this Agreement by Company and Seller) constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to Customary Exceptions.
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such cooperation shall be responsible for any documented out-of-pocket expenses incurred by the cooperating Party.
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The obligations of Buyer to be performed at or after the Closing under this Agreement shall, at the option of Buyer, be subject to the satisfaction or waiver (in writing, and only to the extent waivable) at or prior to the Closing of the following conditions:
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Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except (in all cases) those representations and warranties which refer to facts existing at a specific date shall be true and correct only as of such date. The Group Companies and Seller shall have performed and complied with, in all material respects, all covenants required by this Agreement to be performed and complied with by the Group Companies and Seller on or before the Closing Date.
Buyer may not rely on the failure of any condition set forth in this ARTICLE 9 to be satisfied if such failure was caused by a breach of this Agreement by Buyer.
The obligations of Seller and Company to be performed at or after the Closing under this Agreement shall, at the option of Seller, be subject to the satisfaction or waiver (in writing, and only to the extent waivable) at or prior to the Closing of the following conditions:
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Seller and Company may not rely on the failure of any condition set forth in this ARTICLE 10 to be satisfied if such failure was caused by a breach of this Agreement by Seller and/or Company.
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The limitations set forth in this Section 11.2(b) shall not apply to Losses caused by Seller’s Fraud.
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Indemnified Person may have under this Agreement or otherwise with respect to a breach of representations and warranties, covenants, obligations or agreements under this Agreement, and (b) each Party expressly waives and releases, and agrees to waive and release, any and all other rights or causes of action it or its Affiliates may have against the other Parties now or in the future under any Law (regardless of the theory of recourse) or in equity, or tort, or otherwise, including rescission of this Agreement, with respect to such matters. Notwithstanding anything to the contrary (including the preceding sentences), nothing in this Agreement shall limit, restrict or otherwise affect the terms, conditions and coverage of the RWI Policy, including any Buyer Indemnified Person’s right to make any claim, seek any coverage or recourse, receive any payment or otherwise pursue the exercise of rights under the RWI Policy, provided that Buyer shall not, and Buyer shall cause the other Buyer Indemnified Persons not to, provide that a right of subrogation shall accrue or inure to the benefit of the insurer under the RWI Policy except to the extent otherwise set forth in Section VIII(b) of the RWI Policy as of the Closing.
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If to Seller or, before the Closing, any Group Company, to:
Tide Rock YieldCo, LLC
343 S Highway 101, Suite 200
Solana Beach, CA 92075
Attention: Ryan Peddycord
Email: [email protected]
with a copy (which will not constitute notice) to:
Baker & Hostetler LLP
1900 Avenue of the Stars
Suite 2700
Los Angeles, CA 90067-4301
Attention: Will Chuchawat
Email: [email protected]
If to Buyer or, after the Closing, any Group Company, to:
Mayville Engineering Company, Inc.
135 South 84th Street
Suite 300
Milwaukee, WI 53214
Attention: Sean P. Leuba
Email: [email protected]
with a copy (which will not constitute notice) to:
Foley & Lardner LLP
777 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Bryan S. Schultz
Email: [email protected]
All notices, consents, waivers and other communications shall be deemed to have been duly given (as applicable): if delivered by hand, when delivered by hand; if delivered by overnight service, when delivered by nationally recognized overnight service; if delivered by courier, when delivered by courier; or if delivered by email, when transmitted if transmitted without indication of delivery failure prior to 5:00 p.m. local time for the recipient (and if transmitted without indication of delivery failure after 5:00 p.m. local time for the recipient, then delivery will be deemed duly given at 9:00 a.m. local time for the recipient on the subsequent Business Day).
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(whether of the Designated Jurisdiction or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than those of the Designated Jurisdiction.
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establishment and funding of the Escrow Account under the Escrow Agreement shall be borne by Buyer and Seller in equal amounts, (b) all filing fees payable under the HSR Act, as referenced in Section 6.2(a), shall be borne by Buyer and (c) all Seller Transaction Expenses shall be borne by Seller.
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would be unreasonable, and the Parties shall negotiate in good faith to modify this Agreement in order to carry out the original intent and purpose of such invalid, illegal or unenforceable provision of the Parties as closely as possible in an acceptable manner so that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
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that the other Parties may have, (a) the Parties shall be entitled to obtain damages for any such breach and (b) without having to demonstrate (i) the inadequacy of money damages, (ii) the likelihood of success on the merits, (iii) damages, (iv) irreparable harm, or (v) that the harm from not issuing the injunction/specific performance outweighs the harm from issuing the injunction/specific performance, and (to the extent permitted by applicable Law) without posting a bond or other security, the Parties shall be entitled to enforce any provision of this Agreement by a decree of specific performance and to temporary, preliminary and permanent injunctive relief to prevent breaches or threatened breaches of any provision of this Agreement. Further, the Parties hereby waive any claim or defense that there is an adequate remedy at law for such breaches or threatened breaches. Seeking specific performance or temporary, preliminary or permanent injunctive relief shall not be an election of remedies and shall not limit the obligation of the Party breaching or threatening breach to indemnify under this Agreement.
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IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the day and year first above written.
| “Buyer” MAYVILLE ENGINEERING COMPANY, INC. By: /s/ Sean P. Leuba |
IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the day and year first above written.
| “Company” ACCU-FAB, LLC By: /s/ Ryan Peddycord |
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| “Seller” TIDE ROCK YIELDCO, LLC By: /s/ Ryan Peddycord |
In this Agreement, the following terms have the meanings specified in this Exhibit A.
“AAA” has the meaning set forth in Section 13.3.
“Accounting Expert” has the meaning set forth in Section 2.3(b).
“Acquisition Communications” has the meaning set forth in Section 13.15(b).
“Acquisition Engagement” has the meaning set forth in Section 13.15(a).
“Acquisition Proposal” means, other than the Transactions, any Contract, offer, proposal or inquiry relating to or any Person’s indication of interest in one or more transactions involving (a) the direct or indirect sale, license, lease, disposition or acquisition of all or a material portion of the assets of any Group Company; (b) the direct or indirect issuance, sale, disposition or acquisition of any Equity Interests of any Group Company; (c) any direct or indirect merger, consolidation, business combination, reorganization, interest or share exchange or similar transaction involving any Group Company; or (d) any other transaction or arrangement that is inconsistent with any of the Transactions.
“Action” means any lawsuit, legal proceeding, audit, investigation, litigation or arbitration, mediation or other alternate dispute resolution procedure.
“Affiliate” means, with respect to any Person, any other Person, which directly or indirectly controls, is controlled by or is under common control with such Person. For purposes of this definition, the term “control” (including the correlative meanings of the terms “controlled by” and “under common control with”) as used with respect to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities or by contract or otherwise, or of more than 50% of the outstanding voting power of such Person.
“Agreement” has the meaning set forth in the Preamble.
“Ancillary Documents” means any agreement, instrument or document required to be delivered at the Closing pursuant to Section 1.5(a) or Section 1.5(b) or that is otherwise executed by any Party in furtherance of the consummation of the Transactions.
“BakerHostetler” means Baker & Hostetler LLP.
“Benefit Plan” means any “employee benefit plan” within the meaning of Section 3(3) of ERISA, and any other material policy, program or arrangement providing for compensation or benefits, including bonuses, stock options, equity or incentive compensation, phantom equity, profit-sharing, deferred compensation, life insurance, pension, retirement, expense reimbursements, medical, hospital, disability, welfare or fringe benefits, change of control, severance, or vacation pay, to which any Group Company is a party or otherwise bound, with respect to which any Group Company has any obligation or which are maintained, contributed to
or sponsored by any Group Company for the benefit of any current or former employee, officer or director, or any current or former dependent thereof. Notwithstanding the foregoing, a Benefit Plan shall not include any “multiemployer plan” (within the meaning of Section 3(37) of ERISA) or any plan maintained by a Governmental Authority.
“Business Agreements” has the meaning set forth in Section 4.16(a).
“Business Day” means a day other than Saturday, Sunday or holiday on which banks located in the Designated Jurisdiction are authorized or obligated to close.
“Buyer” has the meaning set forth in the Preamble.
“Buyer Closing Statement” has the meaning set forth in Section 2.2.
“Buyer Fundamental Representations” means the representations and warranties contained in Section 5.1 (Organization and Power), Section 5.2 (Authority and Enforceability) and Section 5.10 (No Brokers).
“Buyer Return” has the meaning set forth in Section 7.1(b).
“Buyer Transaction Expenses” means the Transaction Expenses incurred by or on behalf of Buyer or its Affiliates (excluding, for clarity, the Group Companies).
“Claim” has the meaning set forth in Section 11.1(b).
“Closing” has the meaning set forth in Section 1.4.
“Closing Cash” means, as determined in accordance with GAAP, the aggregate amount of the following as of the Effective Time (without duplication): (a) all cash, commercial paper, certificates of deposit and other bank deposits, treasury bills, short term investments and all other cash equivalents in accounts of the Group Companies, in each case, maturing less than 30 days after the Closing Date (excluding security deposits held by Third Parties), plus (b) Third Party checks deposited or held in any Group Company accounts that have not yet cleared (but only to the extent not counted as a current asset included in the calculation of Working Capital), minus (c) issued but uncleared checks, drafts and wire transfers (but only to the extent not counted as a current liability included in the calculation of Working Capital). Notwithstanding the foregoing, the Closing Cash shall not include (a) any Restricted Cash or (b) any asset of the Group Companies that is included in the calculation of Working Capital. Closing Cash shall be reduced dollar for dollar for (i) any cash used to reduce Indebtedness or Transaction Expenses or (ii) any cash distributions made to Seller, in each of the cases described in subclause (i) and subclause (ii), between Effective Time and immediately prior to the Closing.
“Closing Date” has the meaning set forth in Section 1.4.
“Closing Indebtedness” means the aggregate amount of Indebtedness of the Group Companies as of immediately prior to the Closing.
“Closing Working Capital” means the Working Capital as of the Effective Time.
“Closing Working Capital Adjustment” means:
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” has the meaning set forth in the Preamble.
“Company Agents” has the meaning set forth in Section 8.1(a).
“Company Engagements” has the meaning set forth in Section 13.15(a).
“Company Fundamental Representations” means the representations and warranties contained in Section 4.1 (Organization and Power), Section 4.2 (Authority and Enforceability), Section 4.4 (Capitalization), Section 4.5 (Subsidiaries) and Section 4.27 (No Brokers).
“Company Intellectual Property” means all Intellectual Property owned, or purported to be owned, by the Group Companies.
“Confidentiality Agreement” means the letter agreement, dated January 7, 2025, by and between Buyer and Company with respect to the confidentiality of certain information of the Group Companies and their Affiliates.
“Contract” means any legally binding written or oral contract, agreement, license, lease, guaranty, indenture, sales or purchase order, or other legally binding commitment in the nature of a contract.
“Copyrights” means all U.S. and foreign copyrights and works of authorship and all registrations, applications to register and renewals of any of the foregoing.
“COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, “personal protective equipment,” shut down, closure, sequester, “return to work,” “reopening,” safety or similar Law, regulation, policy, rule or order promulgated by any Governmental Authority, in each case, in connection with or in response to the COVID-19 Pandemic, solely to the extent that such COVID-19 Measures are binding upon any Group Company or any Group Company is otherwise legally required to comply therewith.
“COVID-19 Pandemic” means the SARS-Cov2 or COVID-19 pandemic, including any future resurgence or evolutions or mutations thereof and/or any related or associated disease outbreaks, epidemics and/or pandemics resulting therefrom.
“Customary Exceptions” means bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws of general application relating to or affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies.
“Data Room” means the electronic data room maintained by Datasite on behalf of the Group Companies for purposes of the Transactions.
“Deferred Revenue” means any monies received by any Group Company from customers in advance of the full delivery or full performance of the related products or services provided (irrespective of whether classified as a current or long term liability), including (a) any deposits from customers pursuant to which such Group Company is obligated to expend funds for the purchase or performance of services for a specific order and (b) any amounts invoiced to, or paid by, customers of such Group Company that, as of the date of determination, are invoiced but not yet recognized as revenue.
“Designated Jurisdiction” means the State of Delaware.
“Direct Claim” has the meaning set forth in Section 11.5.
“Disclosure Schedule” means that certain document identified as the Disclosure Schedule delivered by Company and Seller to Buyer in connection with this Agreement.
“DOJ” has the meaning set forth in Section 6.2(b).
“Effective Time” has the meaning set forth in Section 1.4.
“Employees” means those Persons employed by the Group Companies immediately prior to the Closing.
“Encumbrance” means any lien (statutory or otherwise), encumbrance, claim, charge, security interest, mortgage, deed of trust, pledge, easement, conditional sale or other title retention agreement, right of first refusal, option to purchase, defect in title, or other restriction of a similar kind. In the case of any Equity Interest, Encumbrance also means and includes any voting trust, proxy, power of attorney or similar arrangement, any right or privilege capable of becoming a voting trust, proxy, power of attorney or similar arrangement, and any restriction affecting the ability of any holder of the Equity Interests to exercise all ownership rights thereto.
“End Date” has the meaning set forth in Section 12.1(b)(ii).
“Environmental Laws” means all applicable Laws relating to: (a) pollution or the protection of human health or the environment (including ambient air, surface water, groundwater, land surface, soil vapor, and/or subsurface strata); (b) the investigation, cleanup and abatement, removal or remedial action, or any other response to the Release or threatened Release of Hazardous Substances to the environment; (c) the emission, generation, treatment, disclosure, reporting, storage, containment, recycling, reclamation, reuse, disposal, transportation, processing, handling, use, existence, spill, Release or threatened Release of any Hazardous Substances; (d) the management, manufacture, import, distribution or sale of any Hazardous Substances; or (e) natural resources, endangered or threatened species, or human health or safety. Environmental Laws shall include (without limitation) the following (including their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et seq. as amended by the Superfund Amendments and Reauthorization Act of 1986; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C.
§§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.; the Hazardous Materials Transportation Act of 1975, 49 U.S.C. §§ 5101 et seq.; and the Federal Insecticide, Fungicide, and Rodenticide Act of 1947, 7 U.S.C. §§ 136 et seq.
“Equity Interests” means (a) any shares of capital stock, (b) any limited liability company interests, membership interests, or units (b) any partnership interests, (c) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity, including a so-called “phantom equity interest,” (d) any subscriptions, calls, warrants, options, or commitments of any kind or character relating to, or entitling any Person to purchase or otherwise acquire shares of capital stock, limited liability company interests, membership interests, or units, or other equity securities, (f) any securities convertible into or exercisable or exchangeable for capital stock, limited liability company interests, membership interests, or units, or other equity securities or (g) any other interest classified as, or constituting, an equity security of a Person.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means any Person organized under the laws of the United States or operating therein that is or would be aggregated and treated as a single employer with a Group Company under Section 414(b), (c), (m), or (o) of the Code.
“Escrow Account” has the meaning set forth in Section 1.6.
“Escrow Agent” means U.S. Bank National Association or another national banking association mutually acceptable to Buyer and Seller.
“Escrow Agreement” has the meaning set forth in Section 1.6.
“Escrow Amount” has the meaning set forth in Section 1.6.
“Estimated Closing Cash” has the meaning set forth in Section 2.1.
“Estimated Closing Indebtedness” has the meaning set forth in Section 2.1.
“Estimated Closing Statement” has the meaning set forth in Section 2.1.
“Estimated Closing Working Capital” has the meaning set forth in Section 2.1.
“Estimated Closing Working Capital Adjustment” means:
“Estimated Seller Transaction Expenses” has the meaning set forth in Section 2.1.
“Final Determination Date” means the date on which the Closing Cash, Closing Indebtedness, Closing Working Capital (and Closing Working Capital Adjustment) and Seller Transaction Expenses are finally determined for purposes of, and in accordance with, ARTICLE 2.
“Financial Statements” has the meaning set forth in Section 4.6(a).
“Formation Documents” means the articles of organization, articles of incorporation, certificate of incorporation, or any similar document required by the Laws of the applicable jurisdiction to incorporate or organize a corporation, limited liability company, or other entity.
“Formation Jurisdiction” means the jurisdiction in which the Formation Documents are filed.
“Fraud” means, with respect to any Party, such Party’s fraud as defined under Delaware common law (as it exists on the date of this Agreement), with respect to the making of the express representations and warranties in this Agreement or any Ancillary Document.
“FTC” has the meaning set forth in Section 6.2(b).
“Fundamental Representations” means the Company Fundamental Representations, Seller Fundamental Representations and Buyer Fundamental Representations.
“GAAP” means generally accepted accounting principles in the United States, as in effect from time to time.
“Governmental Authority” means any foreign, domestic, federal, territorial, state, local or other governmental authority (including the President of the United States), quasi-governmental authority, court, commission, board, bureau, agency or instrumentality, or any regulatory, administrative or other department, agency, or any political or other subdivision, department or branch of any of the foregoing, or any arbitrator.
“Group Companies” means Company and its Subsidiaries.
“Hazardous Substances” shall mean (i) “hazardous materials,” “hazardous wastes,” “hazardous substances,” “toxic pollutants,” “extremely hazardous substance,” “restricted hazardous waste,” “toxic substance,” “pollutant” or “contaminant,” as such terms are regulated, classified or defined under any Environmental Law or any similar words of similar meaning and regulatory effect under any Environmental Law; and (ii) any other hazardous or radioactive
substance, contaminant, or waste, including any quantity of asbestos in any form, urea formaldehyde, PCBs, radon gas, crude oil or any fraction thereof, all forms of natural gas, petroleum products or by-products, any radioactive substance, or per- and polyfluoroalkyl substances (including perfluorooctanoic acid and perfluorooctane sulfonate).
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“Indebtedness” means all Liabilities of any Group Company, without duplication, in respect of (a) borrowed money, whether long- or short-term, or extensions of credit (including credit card liabilities and balances, bank overdrafts and advances), (b) long- or short-term obligations evidenced by bonds, notes, debentures, or similar instruments, (c) deferred or unpaid purchase price of property, goods, business, assets, equipment, services, purchase price settlement or adjustment obligations, or contingency payments, including earn-outs, seller notes, holdbacks, or other unpaid purchase price obligations (other than accounts payable in the Ordinary Course), (d) capital or finance lease obligations that are required to be capitalized in accordance with GAAP as well as Liabilities arising under conditional sales contracts and other similar retention instruments, (e) direct or contingent Liabilities relating to letters of credit (including standby and commercial), bankers’ acceptances, surety or other bonds, or similar instruments, in each case, to the extent drawn, (f) all off-balance sheet Liabilities, including any related to factoring, (g) obligations relating to interest rate protection, currency swap agreements, collar agreements, or other hedging arrangements, in each case, to the extent payable if such contractual obligation is terminated as of the Closing, (h) employer-side payroll Taxes that have been deferred under the CARES Act or in connection with the Presidential Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster, as issued on August 8, 2020, or similar Laws, (i) Deferred Revenue, (j) severance or termination-related payments or benefits owned to any current or former director, manager, officer, employee, or independent contractor whose employment or other service relationship was terminated prior to the Closing, including the employer portion of any payroll Taxes payable or incurred (or that will be payable or incurred) in connection therewith, (k) any unpaid income Taxes of any Group Company related to a Pre-Closing Tax period, (l) unpaid bonuses, commissions, or other incentive compensation in respect of any performance period (or portion thereof), in each case, whether or not accrued and determined in accordance with GAAP, owed to any current or former director, manager, officer, employee, or independent contractor prior to the Closing or with respect to any retention or similar bonuses awarded but not payable until, as of, or following the Closing Date, and in each case the employer portion of any payroll, social security, unemployment or similar Taxes arising with respect thereto, but in no event shall this include any paid time off or similar benefits, (m) unfunded Liabilities of any Group Company with respect to any deferred compensation, retiree welfare benefits, or defined benefit pension plans, (n) incurred but unpaid withdrawal or termination liabilities associated with any defined benefit pension plan, (o) retirement plan employer contributions (matching, discretionary, or otherwise) for the plan year in which the Closing occurs, to the extent not yet paid to the applicable plan prior to the Closing, (p) any declared but unpaid dividends or distributions of any Group Company, (q) any amounts owed to Seller or any of its Affiliates by any Group Company, and (r) indebtedness or other obligations of any other Person of the type described in the preceding subclauses (a)-(q) to the extent guaranteed by any Group Company, and (s) indebtedness or other obligations of any other Person of the type described in the preceding subclauses (a)-(r) to the extent secured by (or for which the holder of such
indebtedness or other obligations has an existing right, contingent or otherwise, to be secured by) any Encumbrance on any Interests or any Encumbrance (other than a Permitted Encumbrance) on any assets of any Group Company. “Indebtedness” shall include all Liabilities (including in respect of principal, interest, premiums (including make-whole premiums), prepayment penalties, breakage costs, fees, expenses, or similar charges arising as a result of the discharge of such amount owed as well as payments or premiums attributable to, or that arise as a result of, the transactions contemplated by this Agreement. Indebtedness shall in no event include any indebtedness incurred by or at the express written direction of Buyer or any Affiliate thereof in connection with the Closing. Subject to the release (at or prior to the Closing) of Encumbrances on the assets of any Group Company described therein, the Leases for the Leased Facilities and obligations thereunder shall not be included in Indebtedness. If any Liability meets the definition of both Indebtedness and Working Capital, such Liability shall be excluded from Working Capital for purposes of this Agreement and such Liability shall be deemed Indebtedness.
“Indemnified Liabilities” means all Liabilities of the Group Companies with respect to: (a) any portion of the Closing Indebtedness that is not included in the calculation of the Closing Indebtedness as determined pursuant to Section 2.4(c); (b) any portion of the Transaction Expenses incurred by or on behalf of a Group Company or Seller that is not included in the calculation of the Seller Transaction Expenses for purposes of Section 2.4(d); (c) Seller Taxes; and (d) any penalties arising from non-compliance with Code Sections 6721 and 6722 relating to failure to file or furnish Form 1095-Cs and Form 1094-Cs for 2024 and prior years, and assessable payments under Code Section 4980H(b) for periods prior to the Closing Date, in each case described in this subclause (d) as adjusted for interest, if applicable.
“Indemnified Person” has the meaning set forth in Section 11.4(a).
“Indemnifying Person” has the meaning set forth in Section 11.4(a).
“Insurance Benefits” has the meaning set forth in Section 11.6(a).
“Intellectual Property” means any and all rights in, arising out of, or associated with any of the following anywhere in the world: (a) Trademarks; (b) Patents; (c) industrial designs, and all Patents, registrations, applications for registration, and renewals thereof; (d) Trade Secrets; (v) mask works, and all registrations, applications for registration, and renewals thereof; (e) internet domain names and social media account or user names (including “handles”), whether or not Trademarks, all associated web addresses, URLs, websites and web pages, social media sites and pages, and all content and data thereon or relating thereto, whether or not Copyrights; (f) Copyrights; (g) rights of publicity and privacy; (h) Software; (i) database rights, rights in designs, invention, rights in confidential business information and know-how, in each case, whether registered or unregistered and including any registrations or applications therefor and goodwill appurtenant thereto; and (j) all other intellectual or industrial property and proprietary rights.
“Interests” has the meaning set forth in the Recitals.
“Interim Period” has the meaning set forth in Section 6.1(a).
“IRS” means the United States Internal Revenue Service.
“Knowledge of Company” or any variant thereof, means the knowledge of Rob Whitney and/or Mark Combs, assuming each such Person has made a reasonable inquiry and investigation.
“Law” means, with respect to a Person, any law, statute, common law, rule, regulation, ordinance, Order, administrative interpretation, policy, guideline, or other requirement (including those of any self-regulatory organization) applicable to such Person.
“Leased Facilities” has the meaning set forth in Section 4.6(c).
“Leases” has the meaning set forth in Section 4.16(a)(ix).
“Liability” means any direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense (including capital improvements), fine, penalty, Taxes, obligation, or responsibility, fixed or unfixed, known or unknown, asserted or unasserted, liquidated or unliquidated, secured or unsecured.
“Licensed Intellectual Property” has the meaning set forth in Section 4.14(b).
“Losses” means: (a) all Liabilities; (b) all losses, damages, judgments, awards, penalties, and settlements; (c) all demands, claims, suits, actions, causes of action, proceedings, and assessments, whether or not ultimately determined to be valid; and (d) all costs and expenses (including prejudgment interest in any litigated or arbitrated matter and other interest), court costs, and fees and expenses of attorneys, consultants, and expert witnesses of investigating, defending, or asserting any of the foregoing or of enforcing this Agreement.
“Marks” means all registered and unregistered United States and foreign trade names, trademarks, trade dress and service marks, together with any applications related thereto.
“Material Adverse Effect” means any change, event, development, condition, occurrence, effect, fact, or circumstance or combination thereof that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (a) the business, assets, Liabilities, operations, financial condition or results of operations of the Group Companies, taken as a whole, or (b) the ability of the Group Companies to perform their obligations pursuant to this Agreement or to consummate the Transactions in a timely manner. However, a Material Adverse Effect shall exclude any change, event, development, condition, occurrence, effect, fact, or circumstance or combination thereof to the extent that the same results from (i) the announcement of this Agreement (to the extent permitted by this Agreement), the pendency or consummation of the Transactions or the performance of this Agreement, including the threatened or actual impact of the same on any Group Company’s relationships with any of its employees, customers, suppliers, vendors, distributors or others having relationships with such Group Company (including the threatened or actual termination, suspension, modification or reduction of such relationships), as well as the communication by Buyer of its plans or intentions with respect to such Group Company, (ii) any failure by the Group Companies to meet any internal or published revenue or earnings projections, forecasts or predictions (for the avoidance of doubt, any underlying cause for any such failure shall not be excluded unless otherwise excluded by any of the other subclauses of this sentence), (iii) any change in GAAP occurring after the Closing Date, (iv) general economic conditions or other conditions generally affecting the industry in which the Group Companies compete or participate (including any impacts resulting from any pandemic
(including COVID-19 Pandemic)), (v) earthquakes, hurricanes, tornadoes or other natural disasters or acts of nature, and epidemics, pandemics or disease outbreaks (including COVID-19 Pandemic, or COVID-19 Measures or any change in COVID-19 Measures or interpretations thereof), (vi) armed hostilities, acts of war or terrorism, including military actions or any escalation or material worsening of any such hostilities, and national or international political or social conditions, including the engagement by the United States in armed hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, (vii) matters adversely affecting general financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or any market index, or any general adverse change in the price of any commodity), (viii) changes in Law after the Closing Date, (ix) any adverse change in or effect on the Group Companies that is proximately caused by any delay in consummating the Closing as a result of any violation or breach by Buyer of any representation, warranty, covenant, obligation or agreement contained in this Agreement, or (x) any change in the cost or availability of financing to Buyer; provided, however, that, in each of the cases described in subclauses (iii)-(viii) above, if any such matter has had, is having, or would reasonably be expected to have a disproportionate adverse effect on the Group Companies relative to other participants in the industries in which the Group Companies compete or participate, then such disproportionate adverse effect shall be taken into account for the purposes of determining whether there has been, is, or will be a Material Adverse Effect.
“MLTN Standard” means a position in law and fact that has a more-likely-than-not (or greater) level of support.
“Most Recent Balance Sheet” has the meaning set forth in Section 4.6.
“Most Recent Balance Sheet Date” has the meaning set forth in Section 4.6.
“Most Recent Financial Statements” has the meaning set forth in Section 4.6.
“Net Adjustment Amount” has the meaning set forth in Section 2.4(e).
“Neutral Accounting Firm” means an independent accounting firm of nationally recognized standing that is not at the time it is to be engaged hereunder rendering services to any Party, or any Affiliate of any Party, and has not done so within the two (2) year period prior thereto.
“Order” means any judgment, order, writ, decision, injunction, consent, stipulation, determination, plan, settlement, ruling, award, decree or similar act of any Governmental Authority.
“Ordinary Course” means the acts or omissions of the Group Companies that satisfy each of the following requirements: (a) acts or omissions in the ordinary course of business that are consistent (through their nature, amount and/or financial import) with the past custom and practice of the Group Companies prior to the date of this Agreement; (b) acts or omissions that do not require approval or resolution by the members or the board of directors (or similar supervisory body) of any Group Company; (c) acts or omissions that are not of any extraordinary nature or
special importance in relation to the normal operation of the business activities of the Group Companies; and (d) acts or omissions that do not violate any Law.
“Organizational Documents” means, with respect to any Person (other than an individual), the Formation Documents, bylaws, operating agreement, limited liability company agreement, limited partnership agreement, partnership agreement, or similar documents or agreements as applicable, of such Person (including any Contract regarding the governance of such Person or the relations or actions between or among any of its equityholders with respect to such Person), in each case with all amendments and supplements thereto.
“Parties” has the meaning set forth in the Preamble.
“Patents” means all issued United States and foreign patents and pending patent applications (whether provisional or non-provisional), including divisionals, continuations, continuations-in-part, substitutions, reissues, reexaminations, extensions, or restorations of any of the foregoing, and other Governmental Authority-issued indicia of invention ownership (including certificates of invention, petty patents, and patent utility models).
“Permits” means all licenses, permits, franchises, approvals, registrations, authorizations, consents or orders of, or filings with, any Governmental Authority.
“Permitted Encumbrances” means (a) liens for Taxes and other governmental charges and assessments which are not yet delinquent and payable or which are being contested in good faith (and that have been sufficiently reflected or reserved against on the face of the Recent Balance Sheet and the Final Closing Statement, as applicable), (b) liens of carriers, warehousemen, mechanics and materialmen and other like liens arising in the Ordinary Course for sums not yet due and payable or which are being contested in good faith (and that have been sufficiently reflected or reserved against on the face of the Recent Balance Sheet and the Final Closing Statement, as applicable), (c) other liens or imperfections on property which are not material in amount or do not materially detract from the value of or materially impair the existing use of the property affected by such lien or imperfections, (d) liens relating to cash deposits made in the Ordinary Course, including those made in connection with workers’ compensation, unemployment insurance and similar types of social security or to secure the performance of Leases, (e) purchase money liens on personal property acquired in the Ordinary Course which are not yet delinquent and payable or which are being contested in good faith (and that have been sufficiently reflected or reserved against on the face of the Recent Balance Sheet and the Final Closing Statement, as applicable), and (f) any utility company easements and similar rights which are not material in amount or do not materially detract from the value of or materially impair the existing use of the property affected by such easements and similar rights.
“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.
“Personal Information” means any information that identifies or, alone or in combination with any other information, could reasonably be used to identify, locate or contact a natural Person, including name, street address, telephone number, email address, identification number issued by
a Governmental Authority, credit card number, bank information, customer or account number, online identifier, device identifier, IP address, browsing history, search history, or other website, application, or online activity or usage data, location data, biometric data, medical or health information, or any other information that is considered “personally identifiable information,” “personal information,” or “personal data” under applicable Law, and all data associated with any of the foregoing that are or could reasonably be used to develop a profile or record of the activities of a natural Person across multiple websites or online services, to predict or infer the preferences, interests, or other characteristics of a natural Person, or to target advertisements or other content to a natural Person.
“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and the portion of any Straddle Period beginning on the first day of such Straddle Period and ending on the Closing Date.
“Privacy and Data Security Policies” shall mean all of the past or present, internal or public-facing policies, notices, and statements concerning the privacy, security or Processing of Personal Information, to the extent relating to the Group Companies.
“Privacy Laws” means all Laws, including guidance issued by any Governmental Authority, concerning the privacy, security, or Processing of Personal Information (including Laws of jurisdictions where Personal Information was collected), including, as applicable, Laws related to data breach notification, Laws related to consumer protection, Laws related to requirements for website and mobile application privacy policies and practices, Laws related to Social Security number protection, Laws related to data security, and Laws related to related to email, text message, or telephone communications.
“Processing” means any operation performed on Personal Information, including the collection, creation, receipt, access, use, handling, compilation, analysis, monitoring, maintenance, retention, storage, transmission, transfer, protection, disclosure, distribution, destruction, or disposal of Personal Information.
“Products/Services” shall mean all products or services currently or at any time previously sold by the Group Companies, or by any predecessor of any Group Company, or that have borne a Trademark of any Group Company.
“PTE Election” means any election under applicable U.S. state or local income Tax Law by or with respect to any Group Company pursuant to which such Group Company will incur or otherwise be liable for any U.S. state or local income Tax Liability under applicable U.S. state or local income Tax Law that would have been borne (in whole or in part) by the direct or indirect equity owners of such Group Company had no such election been made (e.g., any “Specified Income Tax Payment” as defined by IRS Notice 2020-75).
“Purchase Price Allocation” has the meaning set forth in Section 7.7.
“Reference Date” means December 31, 2021.
“Registered Intellectual Property” means all Copyrights, Marks, domain names and Patents that are the subject of an application, certificate, filing or registration issued by, filed with, or
recorded by, any government or other public legal authority in any jurisdiction throughout the world.
“Release” means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing, seeping, placing or migrating into or through the environment (including indoor or outdoor ambient air, surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture), whether intentional or unintentional.
“Representatives” means, when used with reference to a Person, the directors, managers, members, officers, employees, affiliates, representatives (including advisors, consultants, attorneys and accountants) and agents of such Person.
“Restricted Cash” means (a) any cash that appears (or would be required to appear) as “restricted” on a balance sheet of a Group Company under GAAP, (b) any cash that is subject to any Encumbrance as of the Closing (in each case, excluding, for the avoidance of doubt, any Encumbrance that will be fully and unconditionally released or terminated at the Closing), (c) any security deposits made or held by a Group Company, cash that collateralizes any obligation, cash in reserve or escrow accounts, custodial cash, cash subject to a dominion, control or similar agreement (in each case, other than any such arrangement that will be fully and unconditionally released or terminated at the Closing), or (d) any cash that is not freely available or usable by a Group Company as of the Closing due to any withholding Taxes, repatriation Taxes, or other Taxes, or because it is subject to restrictions, limitations, or conditions or Taxes on use or distribution by Law, Order, Contract, or otherwise (including restrictions on dividends, collateral for letters of credit, repatriations, or other form of restriction).
“Review Period” means a period of thirty (30) days after delivery of the Buyer Closing Statement (including deemed delivery of the Buyer Closing Statement); provided, that such period of time shall be tolled and extended to account for any material delay or material failure by Buyer of its obligations under Section 2.3(a).
“RWI Policy” has the meaning set forth in Section 8.1(c).
“Seller” has the meaning set forth in the Preamble.
“Seller Basket Amount” means Five Hundred Thousand Dollars ($500,000).
“Seller Fundamental Representations” means the representations and warranties contained in Section 3.1 (Organization and Power), Section 3.2 (Authority and Enforceability) and Section 3.5 (Ownership of the Interests).
“Seller Material Adverse Effect” has the meaning set forth in Section 3.4.
“Seller Parties” means the Group Companies, Seller and any of their respective Affiliates or Representatives.
“Seller Return” has the meaning set forth in Section 7.1(a).
“Seller Taxes” means, without duplication, (a) any and all Taxes of any Group Company (or any predecessor) attributable to a Pre-Closing Tax Period; (b) any and all Taxes of Seller (or any Affiliate other than Group Companies); (c) any and all Taxes of an affiliated, consolidated, combined, unitary, or similar group of which any Group Company (or any predecessor) is or was a member on or prior to the Closing Date as a result of Treasury Regulations Section 1.1502-6 or any comparable provisions of foreign, state, or local Law; (d) any and all Taxes of any person imposed on any Group Company arising under the principles of transferee or successor liability or by contract or otherwise, relating to an event or transaction occurring on or before the Closing Date; (e) any and all employment or payroll Taxes imposed on any Group Company related to the payment of any compensation paid or incurred in connection with the transactions contemplated by this Agreement; (f) any and all Taxes imposed on Buyer as a result of the failure to withhold on any portion of the payments contemplated by this Agreement of the Group Companies; and (g) the required repayment to or recoupment by a Tax authority of any Tax refund previously paid to Seller pursuant to Section 7.3.
“Seller Transaction Expenses” means the Transaction Expenses incurred by or on behalf of the Group Companies, Seller or their respective Affiliates. Without limitation, the Seller Transaction Expenses include (a) all bonuses or other payments payable to any of the current or former directors, officers or employees of the Group Companies in connection with, or as a result of, the consummation of the Transactions, whether payable on the Closing Date or thereafter, including those bonuses or other payments described in the Contracts listed as Items 3 through 6 of Section 4.18(a) of the Disclosure Schedule, (b) payments to purchase outstanding profits interests or phantom equity issued with respect to any Group Company and (c) the employer portion of any payroll, social security, unemployment or similar Taxes arising from or relating to any of the amounts described in subclause (a) or subclause (b).
“Software” means all computer software and code, including all new versions, updates, revisions, improvements, and modifications thereof, whether in source code, object code, or executable code format, including systems software, application software (including mobile apps), firmware, middleware, programming tools, scripts, routines, interfaces, libraries, and databases, and all related specifications and documentation, including developer notes, comments and annotations, user manuals, and training materials relating to any of the foregoing.
“Straddle Period” means any taxable period beginning on or prior to and ending after the Closing Date for U.S. federal and applicable state income Tax purposes.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which securities sufficient to elect at least a majority of its board of directors or other persons performing similar functions (or, if there are no such securities, more than 50% of the equity securities of which) are owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries; and the term “Subsidiary” with respect to any Person shall include all subsidiaries of each subsidiary of such Person.
“Survival Period” has the meaning set forth in Section 11.1(a).
“Target Working Capital” means Twelve Million Seven Hundred Fifty Thousand Dollars ($12,750,000).
“Target Working Capital Lower Range” means Twelve Million Five Hundred Thousand Dollars ($12,500,000).
“Target Working Capital Upper Range” means Thirteen Million Dollars ($13,000,000).
“Tax” (and, with correlative meaning, “Taxes”) means any federal, state, local, foreign or other taxes, which taxes include any income, gross receipts, property, sales, use, license, franchise, employment, payroll, withholding, alternative or add-on minimum, ad valorem, transfer or excise tax, windfall and other profits, capital stock, social security, workers’ compensation, unemployment, disability, service, service use, lease, registration, value added, premium, stamp, estimated or net worth, parking, property, natural resources, environmental, commercial activity, severance and other taxes, and any fees, duties, levies, customs, tariffs, imposts, assessments, obligations and charges in the nature of a tax imposed by any Governmental Authority, together with any interest, penalty or addition to tax, whether disputed or not, imposed by such Governmental Authority with respect thereto.
“Tax Contest” means any Action, audit or other administrative or judicial proceeding with respect to Taxes or Tax Returns of the Group Companies initiated by a Governmental Authority.
“Tax Return” means any return, declaration, report, statement, information statement or other document filed or required to be filed with respect to Taxes with any Governmental Authority, including any attachments thereto and amendments or supplements of any of the foregoing.
“Termination Notice” has the meaning set forth in Section 12.2.
“Third Party” means a Person that is not a Party or an Affiliate of a Party (or, in each case, any permitted successor or assign).
“Third Party Claim” means any claim against any Indemnified Person by a Third Party, whether or not involving an Action.
“Trademarks” means any and all trademarks, service marks, trade dress, trade names, brand names, logos, slogans, and other similar indicia of source, origin, or business identifiers, whether registered or unregistered, and the goodwill connected with the use of and symbolized thereby or associated therewith, including all registrations, applications for registration, and renewals of any of the foregoing.
“Trade Secrets” means trade secrets, confidential business information and other proprietary information including designs, research and development information, technical information, specifications, operating and maintenance manuals, methods, engineering drawings, know-how, data, discoveries, inventions, industrial designs and other proprietary rights (whether or not patentable or subject to copyright, mask work, or trade secret protection).
“Transaction Expenses” means, with respect to any Person, without duplication, all legal, accounting, consulting, investment banking, financial advisory, and other expenses incurred by or on behalf of such Person prior to the Closing in connection with the Transactions (including fees and expenses of bankers, accountants, attorneys and other deal professionals).
“Transactions” means all of the transactions contemplated by this Agreement and the Ancillary Documents.
“Transfer Taxes” means transfer, documentary, sales, use, stamp, registration and other such Taxes, and all conveyance fees, recording charges and other similar fees and charges (including any penalties and interest), incurred in connection with consummation of the Transactions, but for the avoidance of doubt, excluding any income Taxes.
“Treasury Regulations” means the final or temporary regulations issued by the United States Department of Treasury pursuant to its authority under the Code, and any successor regulations.
“Unadjusted Purchase Price” has the meaning set forth in Section 1.2.
“Venue” means Wilmington, Delaware.
“Voting Debt” shall mean any bonds, debentures, notes or other indebtedness of any Person having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Equity Interests of such Person may vote.
“WARN Act” has the meaning set forth in Section 4.17(f).
“Working Capital” has the meaning set forth on Exhibit C.
“Working Capital” means, with respect to the Group Companies, (i) the sum of current assets of the Group Companies but excluding Closing Cash, right-of-use assets for any lease, any assets or contra-liabilities associated with an item of Indebtedness, employee advances, loans and notes receivable, and Tax assets, minus (ii) current liabilities of the Group Companies but excluding income Tax liabilities, Closing Indebtedness and Seller Transaction Expenses. Working Capital shall be determined in accordance with the methodology used in preparing the Most Recent Balance Sheet except as set forth in this Exhibit C, in each case to the extent consistent with GAAP; it being understood that the only categories for current assets and current liabilities for the purposes of calculating Working Capital shall be as expressly set forth in Annex I (including the adjustments set forth on Annex I), provided that all assets and liabilities that would be reported as a current asset or a current liability on a balance sheet in accordance with GAAP (but only to the extent any such assets are reasonably expected to provide a direct and measurable cash economic benefit to the Group Companies or Buyer post-Closing and any such liabilities are reasonably expected to result in a cash obligation to the Group Companies or Buyer post-Closing), subject to specified exclusions herein, will be included in Working Capital. An example of the Working Capital using the Most Recent Balance Sheet is attached as Annex I.
EXHIBIT E
RESTRICTIVE COVENANT AGREEMENT
See attached.
EXHIBIT E
EXHIBIT F
TRANSITION SERVICES
Health and Welfare Plans:
| ● | Type: Seller will provide continued coverage under the group health and welfare Benefit Plans listed in Section 4.18(a) of the Disclosure Schedule, together with related administrative and support services |
| ● | Term: From the Closing through December 31, 2025 |
| ● | Cost: (a) Reimbursement for the monthly insurance premiums and other reasonable out-of-pocket costs incurred by Seller in the performance of the services, in each case, in amounts and at times consistent with the past practices of the Group Companies and (b) an administrative fee in the amount of $4,000 per month. |
EXHIBIT F
EXHIBIT G
PARTICIPANT GENERAL RELEASE
GENERAL RELEASE
I understand that I have accepted my designation as a Participant in the Accu-Fab, LLC Equity- Based Incentive Compensation Plan (the “Plan”) of Accu-Fab, LLC (the “Company”). As a Participant in the Plan and pursuant to the award notice given to me thereunder (my “Award”), I will receive a lump sum payment in the gross amount of $[●] (the “Payment”) upon (or as soon as practicable following) the later of (i) the date this Release becomes effective, and (ii) the Closing Date as defined in that certain Purchase Agreement dated as of May 23, 2025 by and among Mayville Engineering Company, Inc. (“Buyer”), the Company, and Tide Rock YieldCo, LLC (“Seller”). I acknowledge that the Payment is the full amount owed to me under the Plan and Award, and once the Payment (after reduction for applicable withholding taxes and other authorized deductions) is made, my participation in the Plan and my Award will terminate. In consideration of receiving the Payment, I have agreed to sign this Release. I understand that I am not entitled to the Payment unless I sign this Release and it has become effective.
In consideration of the Payment, and except as otherwise set forth in below, I hereby generally and completely release the Company, the Buyer and their respective affiliates, and their respective parents, subsidiaries, successors, predecessors and affiliates, and all of their partners, managers, members, directors, officers, employees, stockholders, shareholders, agents, attorneys, insurers, affiliates and assigns, from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring at any time prior to and including the date I sign this Release. This general release includes, but is not limited to: (a) all claims arising out of or in any way related to my employment with or services to the Company and its affiliates, or their affiliates; (b) all claims related to my compensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, profits interests, stock, stock options and other equity awards, or any other ownership interests in the Company and its affiliates, or their affiliates; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act (as amended) (“ADEA”), the federal Employee Retirement Income Security Act of 1974 (as amended), and the California Fair Employment and Housing Act (as amended).
Notwithstanding the foregoing, I understand that the following rights or claims are not included in this Release: (i) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company or its affiliate to which I am a party; the charter, bylaws, or operating agreements of the Company or its affiliate; or under applicable law; (ii) any rights which cannot be waived as a matter of law; or (iii) the Payment. In addition, I understand that nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and Housing, except that I hereby waive my right
to any monetary benefits in connection with any such claim, charge or proceeding. I hereby represent and warrant that, other than the claims identified in this paragraph, I am not aware of any claims I have or might have that are not included in this Release.
I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA, and that the consideration given under the Plan for this Release is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) this waiver and release do not apply to any rights or claims that may arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release (although I may choose voluntarily not to do so); (c) I have twenty-one (21) days to consider this Release (although I may choose voluntarily to sign this Release earlier), except that if two or more participants in the Plan are asked to sign this Release in consideration for receiving benefits under the Plan then I shall have forty-five (45) days in which to sign this Release and the Company shall also provide me with additional written disclosures at the time as required by the Older Workers Benefit Protection Act; (d) I have seven (7) days following the date I sign this Release to revoke the Release by providing written notice to an office of the Company; and (e) this Release will not be effective until the date upon which the revocation period has expired, which will be the eighth day after I sign this Release, provided I have not revoked the Release.
I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: 3A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to the release of any claims hereunder.
I hereby represent that I have been paid all compensation owed and for all hours worked; I have received all the leave and leave benefits and protections for which I am eligible pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise; and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.
Dated: By:
Name:
Exhibit 99
MAYVILLE ENGINEERING COMPANY ANNOUNCES DEFINITIVE AGREEMENT TO ACQUIRE ACCU-FAB, LLC
Acquisition to provide MEC with strategic diversification into high-growth end-markets, including critical power infrastructure, data center and renewable energy
Combined platform adds strategically located facilities and enhances value-added capabilities
Expected to be immediately accretive to Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Earnings Per Share
MEC to host Accu-Fab acquisition conference call and webcast today at 9:00 a.m. Eastern Time
MILWAUKEE, Wis., May 27, 2025 -- Mayville Engineering Company (NYSE: MEC) (the “Company” or “MEC”), a leading value-added provider of design, prototyping and manufacturing solutions serving diverse end-markets, today announced a definitive agreement to acquire Accu-Fab, LLC (“Accu-Fab”) from strategic holding company Tide Rock for a total consideration of $140.5 million, plus ordinary and customary adjustments. The proposed acquisition is expected to close during the third quarter 2025, subject to the satisfaction of customary closing conditions.
Accu-Fab is a vertically integrated contract manufacturer providing technology-driven, cutting-edge metal fabrication solutions to large OEMs. Accu-Fab offers value-added services that include design, engineering, sheet metal fabrication and integration, and specialized finishing. Accu-Fab serves as a supplier to leading OEMs in the critical power infrastructure, data center and renewable energy end-markets. Accu-Fab operates state-of-the-art manufacturing facilities at two locations, Raleigh, North Carolina and Wheeling, Illinois, which include approximately 200,000 square-feet of manufacturing space.
“Accu-Fab is a well-established metal fabricator with deep, long-standing relationships with leading OEMs in high-growth, emerging end markets that are highly complementary to MEC’s existing growth platform,” said Jag Reddy, President and Chief Executive Officer. “Upon closing of the acquisition, Accu-Fab will be immediately accretive to our Adjusted EBITDA, Adjusted EBITDA margins and Adjusted Earnings Per Share (EPS), while creating substantial upside to our long-term value creation potential.”
“Additionally, this acquisition strengthens our commercial reach by accelerating entry into attractive new markets—an explicit priority within our MBX value creation framework,” continued Reddy. “Accu-Fab’s strong customer relationships and value-added services present a compelling opportunity to leverage scale, operational discipline, and commercial infrastructure to drive meaningful revenue and cost synergies.”
“Demand for critical power infrastructure and industrial-grade metal components is being propelled by durable multi-year growth drivers, including large-scale investment in data center infrastructure and the reshoring of U.S. manufacturing,” stated Reddy. “Through the acquisition of Accu-Fab, MEC is able to gain immediate access to end markets shaped by these trends, while also adding incremental domestic production capacity to support growing demand in key geographies. Over the next three years, we expect to realize significant operational and
commercial synergies, consistent with our commitment to margin expansion, capital discipline, and sustained profitable growth.”
TRANSACTION OVERVIEW
Accu-Fab brings to MEC a track record of profitable growth and operational excellence. For the full-year 2024, Accu-Fab recorded total net sales and Adjusted EBITDA of approximately $61 million and $14 million, respectively, resulting in an Adjusted EBITDA margin of more than 23%. For the same period, Accu-Fab generated free cash flow of approximately $8 million, or more than 55% of Adjusted EBITDA. Upon closing, the transaction is expected to be immediately accretive to MEC’s Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS, which excludes one-time transaction costs.
MEC intends to fund the transaction through cash and borrowings under its existing $250 million syndicated credit facility with Wells Fargo Bank, National Association, as administrative agent. Wells Fargo Bank and JPMorgan Chase Bank, N.A. have committed an additional $50 million in incremental commitments under the credit facility, subject to customary conditions, to support the ongoing needs of the business, which will be documented as an amendment to the existing credit facility. At closing, MEC anticipates its pro-forma ratio of net debt to Adjusted EBITDA will be approximately 3.0x. Given the expected cash generation of the combined company, MEC intends to reduce its net leverage within the first eighteen months after the closing of the transaction to 1.5x – 2.0x.
Based on current expectations and market conditions, the Company expects that the Accu-Fab acquisition will contribute between $28 – $32 million of net sales and between $6 – $8 million in Adjusted EBITDA for 2025.
STRATEGIC RATIONALE
| ● | Accu-Fab provides MEC meaningful diversification into high-growth adjacent end-markets. Consistent with MEC’s stated strategic commitment to commercial growth, Accu-Fab provides diversification and expansion into high-growth adjacent end-markets with demand supported by substantial multi-year growth trends. These end-markets include critical power infrastructure, data centers and renewable energy. |
| ● | Accu-Fab brings a superior margin profile to MEC. The acquisition of Accu-Fab is expected to be immediately accretive to MEC’s Adjusted EBITDA and Adjusted EBITDA margins. During the three-years ended 2024, Accu-Fab has generated an average Adjusted EBITDA margin of 20.2% compared to MEC’s average Adjusted EBITDA margin of 11.2%, during the same period. |
| ● | Integrated platform creates opportunities for revenue synergies and further market share growth. MEC’s scale and operational efficiencies provide the opportunity to leverage Accu-Fab’s customer relationships and expertise to meet white-space within Accu-Fab’s end-markets. In addition, MEC will be able to leverage its large domestic footprint to capitalize on opportunities to expand share-of-wallet with Accu-Fab’s existing customers across a broader range of geographies. In total, MEC believes that these opportunities represent approximately an additional $3 – $5 million in potential annual revenue synergies over the next twenty-four months. |
| ● | Significant cost synergy opportunity through implementation of MBX framework. Over the last few years, MEC has successfully implemented a strategic operating platform, which is built on operational excellence and a culture of continuous improvement. By implementing this framework across Accu-Fab’s footprint, the Company believes it can generate approximately $1.0 million in annual cost synergies and improved utilization by 2026. |
ADVISORS
J.P. Morgan Securities LLC is serving as financial advisor, The Keystone Group is serving as a strategic consultant, and Foley & Lardner LLP is serving as legal counsel to Mayville Engineering Company.
ACCU-FAB ACQUISITION CONFERENCE CALL
A conference call will be held today at 9:00 a.m. Eastern Time to discuss MEC’s acquisition of Accu-Fab, LLC and conduct a question-and-answer session.
A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of the MEC corporate website at https://ir.mecinc.com. To listen to the live webcast, go to the site at least 15 minutes prior to the scheduled start time to register, download and install any necessary audio software.
For telephone access to the conference, call (833) 470-1428 within the United States, or call (833) 950-0062 when dialing from Canada and please use the Access Code: 659793.
ABOUT MAYVILLE ENGINEERING COMPANY
Founded in 1945, MEC is a leading U.S.-based, vertically-integrated, value-added manufacturing partner providing a full suite of manufacturing solutions from concept to production, including design, prototyping and tooling, fabrication, aluminum extrusion, coating, assembly and aftermarket components. Our customers operate in diverse end markets, including heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, agriculture, military and other end markets. Along with process engineering and development services, MEC maintains an extensive manufacturing infrastructure with 23 facilities, of which 22 are in use, across seven states. These facilities make it possible to offer conventional and CNC (computer numerical control) stamping, shearing, fiber laser cutting, forming, drilling, tapping, grinding, tube bending, machining, welding, assembly, and logistic services. MEC also possesses a broad range of finishing capabilities including shot blasting, e-coating, powder coating, wet spray and military grade chemical agent resistant coating (CARC) painting. For more information, please visit www.mecinc.com.
ABOUT ACCU-FAB, LLC
Accu-Fab is an industry-leading metal solutions contract manufacturer with value-added capabilities including design and engineering services, full fabrication and assembly, supply chain management and specialized finishing. Accu-Fab’s advanced capabilities include metal fabrication, precision forming, Class A finishing and electromechanical assembly, ensuring on-time delivery and high-performance results. Accu-Fab serves critical power infrastructure, data centers, renewable energy and other diverse end markets.
FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements that reflect plans, estimates and beliefs. Such statements involve risk and uncertainties. Actual results may differ materially from those contemplated by these forward-looking statements as a result of various factors. Important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements include, but are not limited to: macroeconomic conditions, including inflation, elevated interest rates, labor availability, material cost pressures and inconsistent demand, have had, and may continue to have, a negative impact on our business, financial condition, cash flows and results of operations (including future uncertain impacts); risks relating to developments in the industries in which our customers operate; risks related to scheduling production accurately and maximizing efficiency; our ability to realize net sales represented by our awarded business; failure to compete successfully in our markets; our ability to maintain our manufacturing, engineering and technological expertise; the loss of any of our large customers or the loss of their respective market shares; volatility in the prices or availability of raw materials critical to our business; geopolitical and economic developments, including foreign trade relations and associated tariffs; risks related to entering new markets; our ability to recruit and retain our key executive officers, managers and trade-skilled personnel; manufacturing risks, including delays and technical problems, issues with
third-party suppliers, environmental risks and applicable statutory and regulatory requirements; our ability to successfully identify or integrate acquisitions; our ability to develop new and innovative processes and gain customer acceptance of such processes; risks related to our information technology systems and infrastructure; results of legal disputes, including product liability, intellectual property infringement and other claims; risks associated with our capital-intensive industry; risks related to our treatment as an S Corporation prior to the consummation of our initial public offering; risks related to our employee stock ownership plan’s treatment as a tax-qualified retirement plan; our ability to remediate the material weakness in internal control over financial reporting identified in preparing our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, and to subsequently maintain effective internal control over financial reporting; and other factors described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, as such may be amended or supplemented in our subsequently filed Quarterly Reports on Form 10-Q. This discussion should be read in conjunction with our audited consolidated financial statements included in the Company’s previously filed Annual Report on Form 10-K for the year ended December 31, 2024. We undertake no obligation to update or revise any forward-looking statements after the date on which any such statement is made, whether as a result of new information, future events or otherwise, except as required by federal securities laws.