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EX-99.1 - EX-99.1 - Diamond Foods Inc | f55059exv99w1.htm |
EX-99.2 - EX-99.2 - Diamond Foods Inc | f55059exv99w2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 25, 2010
DIAMOND FOODS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware | 000-51439 | 20-2556965 | ||
(State or Other Jurisdiction | (Commission | (IRS Employer | ||
of Incorporation) | File Number) | Identification No.) |
600 Montgomery Street, 17th Floor | ||
San Francisco, California | 94111 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: (415) 445-7444
N/A
(Former Name or Former Address, if Changed Since Last Report)
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
Share Purchase Agreement.
On February 25, 2010, Diamond Foods, Inc. (Company) entered into a Share
Purchase Agreement (Purchase Agreement) with Lion/Stove Luxembourg Investment
S.a.r.l. (Seller), pursuant to which the Company agreed to cause a newly formed
wholly-owned United Kingdom subsidiary of the Company to acquire all of the issued
share capital of Lion/Stove Luxembourg Investment 2 S.a.r.l., a private limited
liability company (société à responsabilité limitée) incorporated and existing under
the laws of the Grand Duchy of Luxembourg, which is the holding company for Kettle
Foods (the Kettle Foods acquisition).
Pursuant to the Purchase Agreement, the Company has agreed to pay $615 million in
cash, subject to certain adjustments. The Company intends to finance the acquisition
consideration through a combination of debt incurred under a new secured credit
facility, described below, and the proceeds of an offering of its common stock. This
Form 8-K shall not constitute an offer to sell, or a solicitation of an offer to buy,
nor shall there be any sale of the common stock in any state or jurisdiction in which
such an offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or jurisdiction.
The Company and Seller have made customary representations, warranties and
covenants in the Purchase Agreement. The closing of the Kettle Foods acquisition is
subject to customary conditions, including the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976. In connection with the Kettle Foods acquisition, the Company and certain
executive officers of Kettle Foods will enter into a UK Management Warranty Deed, the
Company and certain executive officers of Kettle Foods will enter into a US Management
Warranty Deed, and the Company and certain executives of Kettle Foods and J.P. Morgan
Chase Bank, N.A. will enter into Escrow Agreements. The Kettle Foods acquisition is
expected to close by the end of fiscal 2010.
Secured Credit Facility.
On February 25, 2010, the Company entered into a Credit Agreement (the Credit
Agreement) among the Company, the Lenders party thereto, Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer, and Banc of America Securities
LLC and Barclays Capital as Joint Lead Arrangers and Joint Book Managers. The Credit
Agreement was entered into in connection with the signing of the Purchase Agreement.
The Credit Agreement provides for a $200 million secured revolving credit
facility (Revolving Credit Facility) and a $400 million secured term loan facility
(Term Loan Facility, and together with the Revolving Credit Facility, the Secured
Credit Facility). The Company expects to borrow $400 million under the Term Loan
Facility, and approximately $170 million under the Revolving Credit Facility, at the
closing of the Kettle Foods acquisition, to fund a portion of the Kettle Foods
acquisition consideration, and to repay existing indebtedness of the
Company. The Term Loan Facility will be subject to quarterly
amortization of principal, in the amount of $40 million per year, beginning in the
fiscal quarter ending July 31, 2010. The remaining principal balance of the Term Loan
Facility, and any outstanding loans under the Revolving Credit Facility, must be
repaid on the fifth anniversary of initial funding. The Term Loan Facility is also
subject to mandatory prepayment with the proceeds of our future equity and debt
financings, asset sales in excess of $5 million per
fiscal year, and extraordinary receipts (as defined in the Secured Credit Facility),
and with 50% of our excess cash flow (as defined in the Secured Credit Facility).
Borrowings under the Secured Credit Facility bear interest, at our option, at either
the agents base rate or the LIBOR Rate, as defined in the Secured Credit Facility,
plus a margin for LIBOR loans ranging from 2.25% and 3.50%, based on our consolidated
leverage ratio (defined as the ratio of our total debt to EBITDA). The Secured Credit Facility is secured by a security
interest in all of our real and personal property, other than property held by certain
non-U.S. subsidiaries, and including the stock of our subsidiaries (limited to 66% of
the stock in the case of certain non-U.S. subsidiaries). The Secured Credit Facility
also provides for customary affirmative and negative covenants, including requirements
that we maintain a maximum consolidated leverage ratio of not more than 4.75 to 1.00,
reducing annually over the term of the facility to reach 3.25 to 1.00 on April 30,
2014, and a requirement that we maintain a minimum fixed charge coverage ratio
(defined as EBITDA minus capital expenditures and cash tax payments, divided by the
sum of our interest expense, principal
payments and dividends) of 1.10 to 1.00 through
October 30, 2012, 1.20 to 1.00 through October 30, 2013, and 1.25 to 1.00 through
maturity.
The Secured Credit Facility also contains covenants that restrict our ability to
(1) incur liens on our property, (2) incur indebtedness (including guarantees and
other contingent obligations), (3) make dispositions of
assets, (4) acquire other companies and businesses, (5) make investments in
companies that are not our subsidiaries and (6) make restricted payments, which could
limit our ability to pay dividends.
Item 7.01.
Regulation FD Disclosure
On February 25, 2010, the Company issued a press release announcing the Kettle
Foods acquisition, the execution of the Purchase Agreement, the execution of the
Credit Agreement.
On February 25, 2010, the Company issued a press release announcing the Companys
financial and operating results for the fiscal quarter ended January 31, 2010.
Copies
of these press releases are furnished as Exhibits 99.1 and 99.2 to this
report and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit | Description | |||
99.1 | Diamond Foods, Inc. press release dated February 25, 2010 announcing Kettle Foods acquisition |
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99.2 | Diamond Foods, Inc. press release dated February 25, 2010 announcing financial results. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DIAMOND FOODS, INC. |
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Date: February 25, 2010 | By: | /s/ Steven M. Neil | ||
Name: | Steven M. Neil | |||
Title: | Executive Vice President, Chief Financial and Administrative Officer |
INDEX TO EXHIBITS
Exhibit | Description | |||
99.1 | Diamond Foods, Inc. press release dated February 25, 2010 announcing Kettle Foods acquisition |
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99.2 | Diamond Foods, Inc. press release dated February 25, 2010 announcing financial results. |