Item 1.01 Entry into a Material Definitive Agreement.
Investor Rights Agreement
In connection with the closing of the initial public offering (the "IPO") of
Diversey Holdings, Ltd. ("we," "us" or "our"), we entered into an Investor
Rights Agreement (the "IRA") with Bain Capital Fund XI, L.P. and certain of its
affiliates (collectively, "Bain Capital") and certain of our other shareholders,
which provides for certain registration rights and nomination rights, as
summarized below.
Registration Rights
The IRA provides Bain Capital with certain customary demand registration rights
which enables it to require us to file a registration statement and otherwise
assist with certain public offerings of our ordinary shares under the Securities
Act of 1933, as amended. Bain Capital is also entitled to certain customary
"piggy-back" registration rights in the event that we propose to register
securities as part of a public offering. In addition, certain other
shareholders, including members of our management, are entitled to certain
customary "piggyback" registration rights in the event that Bain Capital or we
propose to register securities as part of a public offering. The registration
rights are subject to certain conditions and limitations, including the right of
the underwriters to limit the number of shares to be included in an underwritten
offering and our right to delay or withdraw a registration statement under
certain circumstances
All costs and expenses associated with any demand registration or "piggy-back"
registration will be borne by us other than underwriting discounts, commissions
and transfer taxes, if any. We are also required to provide indemnification and
contribution for the benefit of the selling shareholders in connection with any
demand registration or "piggy-back" registration.
Nomination Rights
The IRA also provides Bain Capital with the right to nominate to our board of
directors: (i) a majority of the directors for so long as Bain Capital
beneficially owns 40% or more of the total number of ordinary shares outstanding
immediately following the completion of the IPO; (ii) a number of directors
(rounded up to the nearest whole number) equal to 40% of the total number of
directors for so long as Bain Capital beneficially owns at least 30% and less
than 40% of the total number of ordinary shares outstanding immediately
following the completion of the IPO; (iii) a number of directors (rounded up to
the nearest whole number) equal to 30% of the total number of directors for so
long as Bain Capital beneficially owns at least 20% and less than 30% of the
total number of ordinary shares outstanding immediately following the completion
of the IPO; (iv) a number directors (rounded up to the nearest whole number)
equal to 20% of the total number of directors (but not fewer than two directors)
for so long as Bain Capital beneficially owns at least 10% and less than 20% of
the total number of ordinary shares outstanding immediately following the
completion of the IPO; and (v) one director for so long as Bain Capital
beneficially owns at least 2% and less than 10% of the total number of ordinary
shares outstanding immediately following the completion of the IPO. The IRA also
provides that Bain Capital may assign such right to one of its affiliates.
In the event that any director nominated by Bain Capital resigns, is removed or
is unable to serve for any reason prior to the expiration of his or her term as
a director, then Bain Capital will be entitled to designate a replacement
director to be appointed to the board as soon as reasonably practicable
(regardless of Bain Capital's beneficial ownership at the time of such vacancy),
with such designee serving for the remainder of the term of the director being
replaced.
In addition, for so long as Bain Capital beneficially owns at least 30% of the
ordinary shares outstanding as of immediately following the completion of the
IPO, it is entitled to designate the Chairman of the board of directors and a
majority of the directors serving on each committee of the board. For so long as
Bain Capital is entitled to nominate at least one director to the board, it is
entitled to designate at least one director to serve on each committee of the
board.
The nomination and designation rights described above are subject to compliance
with the rules and regulations of NASDAQ and any applicable laws with respect to
independent directors serving on our board or committees thereof.
The foregoing description does not constitute a complete summary of the IRA and
is qualified by reference to the full text of the IRA filed as Exhibit 10.1
herewith.
Second Amendment to Credit Agreement
In connection with the closing of the IPO, our subsidiary, Diamond (BC) B.V., as
borrower (the "Borrower"), entered into a Joinder and Amendment No. 2 to that
certain Credit Agreement, dated as of September 6, 2017 (as amended, the "Credit
Agreement"), with Credit Suisse AG, Cayman Islands Branch, as administrative
agent and the other lenders party thereto (the "Second Amendment"), and the
lenders and letter of credit issuers named therein. The Second Amendment
provides for (i) an incremental $200 million of revolving loan commitments under
the Borrower's $250.0 million revolving credit facility (the "Revolving Credit
Facility"), which commitments are treated the same as the existing class of
revolving loans ("New Revolving Loans"), and (ii) an extension of the Revolving
Credit Facility maturity date to the fifth anniversary of the closing of the
Second Amendment, provided that the Revolving Credit Facility shall mature on
June 6, 2024, if as of such date, more than $500 million of the aggregate
principal amount of the term loans issued under the Credit Agreement and due on
September 6, 2024 remain outstanding and have not been extended, modified,
renewed, replaced, refunded or refinanced with indebtedness with a scheduled
maturity date of no earlier than three months after the fifth anniversary of the
closing of the Second Amendment.
The foregoing description does not constitute a complete summary of the Second
Amendment and is qualified by reference to the full text of the Second Amendment
filed as Exhibit 10.2 herewith.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The discussion of the Second Amendment set forth under Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description
10.1 Investor Rights Agreement, dated as of March 29, 2021, by and
among Diversey Holdings, Ltd. and the other persons named therein.
10.2 Joinder Agreement and Amendment No. 2, dated as of March 29, 2021,
by and among Diamond (BC) B.V., the lenders and letter of credit
issuers party thereto, and Credit Suisse AG, Cayman Islands Branch,
as the administrative agent thereto.
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