UNITED STATES 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
Date of Report (Date of earliest event reported): July 21, 2006
The Hillman Companies, Inc.
(Exact name of registrant as specified in its charter)
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| Delaware
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001-13293
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23-2874736 |
(State or other jurisdiction
of incorporation)
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(Commission File No.)
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(I.R.S. Employer
Identification No.) |
Registrant’s telephone number, including area code: (513) 851-4900
Not Applicable
(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 (see General Instruction
A.2. below):
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.
On July 21, 2006, The Hillman Companies, Inc. (the “Company”) and its subsidiaries, Hillman
Investment Company (“HIC”) and The Hillman Group, Inc. (the “Borrower”) entered into an Amended and
Restated Credit Agreement (“Restated Credit Agreement”) with Merrill Lynch Capital as
Administrative Agent, Issuing Lender and Swingline Lender, JPMorgan Chase Bank as Syndication Agent
and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc. as Joint Lead Arrangers and Joint Lead Bookrunners (“Lenders”) . The Restated
Credit Agreement replaced the existing March 31, 2004 Credit Agreement (“Senior Credit Agreement”)
between the Company, HIC, Borrower and the Lenders.
The terms of the Restated Credit Agreement provide for a $275 million facility that includes a
$40 million revolving facility and a $235 million term loan facility. Significant changes to the
Senior Credit Agreement include (i) an increase in borrowings under the term loan of $22.3 million
to $235 million (ii) a reduction in the interest rate margin applied to term loans of .25% (iii)
reduction in the leverage ratio of 0.25 turns and (iv) a reduction in the interest coverage ratio
to 2.5. A copy of the Restated Credit Agreement is attached hereto as Exhibit 10.1.
Under
the Restated Credit Agreement, loans bear interest at a base rate plus an applicable margin
except for swingline loans which bear interest at a base rate. The base rate is equal to the
prime rate plus the sum of 1/2 of 1% plus the Federal Funds Rate. The base rate for eurodollar loans
is based on the London Interbank Offered Rate. The applicable margin varies from 2.25% to 3.0 %
based on the Borrower’s leverage ratio. The Restated Credit Agreement provides for commitment fees at an
annual rate of 0.50% on committed amounts not drawn.
The
Restated Credit Agreement contains representations and warranties and covenants that are customary
for facilities of this type. Repayment of amounts under the facility may only be accelerated under
limited circumstances, which include events of default, including change of control events, not
waived in writing by the lenders.
Also on July 21, 2006, the Company, HCI and Borrower entered into the Second Amendment to the
Loan Agreement with Merrill Lynch Capital Corporation and Allied Capital Corporation dated March
31, 2004. The Second Amendment, among other things, (i) reduced interest expense from 13.5% to
10.0% (ii) allows for the increase in term loan borrowings under the terms of the Restated Credit
Agreement from $300 million to $317 million (iii) provides for mandatory prepayment upon a change
of control, and (iv) amends the required leverage ratio and interest coverage ratio. A copy of the
Second Amendment is attached hereto as Exhibit 10.2.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
See the description under Item 1.01 for a description of the Company’s Restated Credit
Agreement and Loan Agreement, which discussion is incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
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| EXHIBIT NUMBER |
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DESCRIPTION |
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10.1
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Amended and Restated Credit Agreement dated as of July 21, 2006 |
10.2
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Second Amendment to Loan Agreement dated as of July 21, 2006 |