Transaction materially deleverages AgroFresh’s
balance sheet and extends debt maturity profile
Positions Company for next chapter of
growth
AgroFresh Solutions, Inc. (“AgroFresh” or the “Company”)
(Nasdaq:AGFS), a global leader in produce freshness solutions,
today announced the successful closing of its comprehensive
refinancing comprised of the previously-announced $150 million
convertible preferred equity investment by an affiliate of Paine
Schwartz Partners, LLC (“Paine Schwartz” or “PSP”) and the
amendment and extension of the Company’s senior secured credit
facilities.
AgroFresh has entered into a revised credit agreement whereby
the Company’s term loan maturity has been extended to December 31,
2024. With the proceeds of the PSP convertible preferred equity
investment, the principal outstanding on AgroFresh’s term loan has
been reduced to $275 million, resulting in a decline in the
Company’s net debt-to-adjusted EBITDA ratio from approximately 5.8x
to 3.9x on a pro-forma basis for the twelve months ended March 31,
2020.* In addition, the Company’s revolving credit facility has
been doubled in size from $12.5 million to $25.0 million with its
maturity extended to June 30, 2024. Borrowings under the amended
term loan will bear interest at the rate of LIBOR plus 6.25 percent
with a 1.00 percent LIBOR floor.
Graham Miao, AgroFresh Chief Financial Officer, commented, “We
are pleased to close on this comprehensive refinancing and are
grateful for the support from both existing and new lenders during
this process. The transaction accomplishes several key goals for
the business, including the significant immediate deleveraging of
our balance sheet and an extension of our maturities. Further, the
new optimized capital structure allows us the flexibility to more
aggressively address our diversification initiatives and generate
growth with the support of our new strategic equity investor Paine
Schwartz.”
BMO Capital Markets acted as sole financial advisor to AgroFresh
and left-lead bookrunner on the amendment and extension of
AgroFresh’s senior secured credit facilities with Deutsche Bank and
ING acting as joint lead arrangers and joint bookrunners. Greenberg
Traurig, LLP acted as legal advisor to AgroFresh. Evercore and
Kirkland & Ellis, LLP were the financial and legal advisors to
Paine Schwartz, respectively. White & Case, LLP acted as the
lenders’ counsel.
Additional information regarding today's announcement and the
amended credit facility will be available in a Form 8-K to be filed
by the Company with the Securities and Exchange Commission.
*Adjusted EBITDA and net debt-to-Adjusted EBITDA are non-GAAP
financial measures. Please see the information under “Non-GAAP
Financial Measures” below for a description of Adjusted EBITDA and
the table at the end of this press release for a reconciliation of
these Non-GAAP financial measures to GAAP results.
About AgroFresh
AgroFresh (Nasdaq:AGFS) is a leading global innovator and
provider of science-based solutions, data-driven technologies and
experience-backed services to enhance the quality and extend the
shelf life of fresh produce. For more than 20 years, AgroFresh has
been revolutionizing the apple industry and has launched new
innovative solutions in a variety of fresh produce categories from
bananas to cherries and citrus to pears. AgroFresh supports
growers, packers and retailers by supplying post-harvest solutions
across the industry that enhance crop values while conserving our
planet’s resources and reducing global food waste.
Visit www.agrofresh.com to learn more.
™Trademark of AgroFresh Inc.
About Paine Schwartz Partners
A global leader in sustainable food chain investing, Paine
Schwartz Partners is a private equity firm focused exclusively on
investment opportunities in the fast-growing, dynamic global food
and agribusiness sectors. The firm's investment, operations and
finance professionals invest throughout cycles across the food and
agribusiness value chain, and bring a collaborative and active
management approach to portfolio companies. For further
information, please see www.paineschwartz.com.
Forward-Looking Statements
In addition to historical information, this release may contain
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. All statements, other than
statements of historical facts, included in this release that
address activities, events or developments that the Company expects
or anticipates will or may occur in the future are forward-looking
statements and are identified with, but not limited to, words such
as “will,” “would,” “anticipate”, “believe”, “expect”, “estimate”,
“plan”, “outlook”, and “project” and other similar expressions (or
the negative versions of such words or expressions).
Forward-looking statements include, without limitation, information
concerning the Company's possible or assumed future results of
operations, including all statements regarding financial guidance,
anticipated benefits from the investment by PSP or the senior
credit facility refinancing, anticipated future growth, business
strategies, competitive position, industry environment, potential
growth opportunities and the effects of regulation. These
statements are based on management's current expectations and
beliefs, as well as a number of assumptions concerning future
events. Such forward-looking statements are subject to known and
unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the Company's management's
control that could cause actual results to differ materially from
the results discussed in the forward-looking statements. These
risks include, without limitation, the risk of increased
competition, the ability of the business to grow and manage growth
profitably, risks associated with acquisitions and investments,
changes in applicable laws or regulations, conditions in the global
economy, including the effects of the coronavirus outbreak, and the
possibility that the Company may be adversely affected by other
economic, business, and/or competitive factors. Additional risks
and uncertainties are identified and discussed in the Company's
filings with the SEC, which are available at the SEC's website at
www.sec.gov.
Non-GAAP Financial Measures
This press release contains the non-GAAP financial measures
adjusted EBITDA and net debt-to-adjusted EBITDA. The Company
believes these non-GAAP financial measures provide meaningful
supplemental information as they are used by the Company's
management to evaluate the Company's performance, including
incentive bonuses and for bank covenant reporting. Management
believes that these measures enhance a reader's understanding of
the operating and financial performance of the Company and
facilitate a better comparison between fiscal periods. EBITDA
excludes income taxes, interest expense and depreciation and
amortization, whereas Adjusted EBITDA further excludes items that
are non-cash, infrequent, or non-recurring, such as share-based
compensation, severance, litigation and M&A related costs, to
provide further meaningful information for evaluation of the
Company’s performance.
The Company does not intend for the non-GAAP financial measures
contained in this release to be a substitute for any GAAP financial
information. Readers of this press release should use these
non-GAAP financial measures only in conjunction with the comparable
GAAP financial measures. Reconciliations of the non-GAAP financial
measures used herein to the most comparable GAAP measure are
provided in the table below.
The following is a reconciliation between the non-GAAP financial
measures of EBITDA and Adjusted EBITDA to their most directly
comparable GAAP financial measure, net loss:
(in thousands)
Last Twelve Months
ended March 31, 2020
GAAP net loss including non-controlling
interests
$
(52,739
)
Benefit for income taxes
(20,387
)
Interest expense(1)
32,005
Depreciation and amortization
82,972
Non-GAAP EBITDA
$
41,851
Share-based compensation
2,945
Asset impairment including
intangibles(2)
11,424
Severance related costs(3)
597
Other non-recurring costs(4)
7,296
Loss on foreign currency exchange(5)
3,081
Mark-to-market adjustments, net(6)
(520
)
Legal recovery
(1,600
)
Non-GAAP Adjusted EBITDA
$
65,074
Ratio of net debt to Adjusted
EBITDA
March 31, 2020
Pro Forma
Adjustment(7)
Pro Forma March 31,
2020
Gross debt
$
406,420
$
—
$
406,420
Less: available cash
(28,300
)
(127,068
)
(155,368
)
Net debt
$
378,120
$
(127,068
)
$
251,052
Net debt-to-Adjusted EBITDA
ratio
5.8x
3.9x
(1)
Interest on the term loan,
inclusive of accretion for debt discounts, debt issuance costs and
contingent consideration
(2)
Impairment on Verigo software,
investment in FFT and other investments
(3)
Severance costs related to
ongoing cost optimization initiatives
(4)
Costs related to certain
professional and other infrequent or non-recurring fees, including
those associated with transition service agreement, litigation and
M&A related fees
(5)
Loss on foreign currency exchange
relates to net losses and gains resulting from transactions
denominated in a currency other than the entity's functional
currency
(6)
Non-cash adjustment to the fair
value of contingent consideration related to Tax Receivables
Agreement with Dow and Tecnidex acquisition
(7)
Represents proceeds from
convertible preferred stock investment from Paine Schwartz
Partners, less expenses
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version on businesswire.com: https://www.businesswire.com/news/home/20200727005704/en/
For AgroFresh Solutions, Inc. Jeff Sonnek - Investor Relations
ICR Inc. Jeff.Sonnek@icrinc.com 646-277-1263
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