WernerCo Announces Commencement of Exchange Offer for Outstanding 8.750% Senior Notes due 2025 and Consent Solicitation

ITASCA, Ill., May 23, 2023 /PRNewswire/ -- WernerCo today announced that its subsidiaries Werner FinCo LP (the "LP Co–Issuer") and Werner FinCo, Inc. (the "Corporate Co-Issuer" and, together with the LP Co-Issuer, the "Issuers") have commenced an offer to exchange (the "Exchange Offer") any and all of the Issuers' outstanding 8.750% Senior Notes due 2025 (the "Old Notes") for new Junior Lien Senior Secured Notes due 2028 (the "Exchange Notes" and the issuance thereof, the "Exchange Notes Issuance") to be issued by the Issuers and guaranteed by the Guarantors, as described in further detail below. Substantially concurrent with this Exchange Offer, the Issuers are (i) seeking to raise $400.0 million of new senior secured first lien debt in a separate transaction (the "First Lien Financing") and (ii) seeking to consummate Amendment No. 2 to the Amended and Restated ABL Credit Agreement, dated as of October 4, 2021 (as amended by Amendment No. 1, dated as of June 29, 2022 and as further amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time). The Exchange Notes will bear interest at a rate to be determined based on the pricing of the First Lien Financing, which the Issuers expect to announce promptly upon its determination, but in no event later than the Withdrawal Deadline (as defined below).

In addition, the Issuers are soliciting consents ("Consents") from Eligible Holders (as defined below) of the Old Notes to adopt certain proposed amendments (the "Proposed Amendments") to the indenture governing the Old Notes, dated as of July 10, 2017 (as amended or supplemented from time to time, the "Old Notes Indenture"), to eliminate substantially all of the restrictive covenants contained in the Old Notes Indenture and the Old Notes, eliminate certain events of default, modify covenants regarding mergers and consolidations and eliminate certain other provisions, including the covenants in connection with change of control, transactions with affiliates, asset sales, liens and certain provisions and other covenants (the "Proposed Amendments"), in each case upon the terms and subject to the conditions, including the Requisite Consents Condition,  the First Lien Financing Condition, the Minimum Participation Condition and the ABL Amendment Condition (each, as defined in the Exchange Offering Memorandum), set forth in the confidential offering memorandum and consent solicitation statement, dated May 23, 2023 (the "Exchange Offering Memorandum"). The solicitation of Consents is referred to herein as the "Consent Solicitation".

Certain holders representing approximately 81% of the aggregate principal amount of the Old Notes have entered into a support agreement (the "Support Agreement") whereby they have agreed, subject to certain conditions, to tender their Old Notes in the Exchange Offer and provide their consent to support the Proposed Amendments in the Consent Solicitation.  Therefore, the Company received advance commitments from a sufficient number of holders of Old Notes for the adoption of the Proposed Amendments, assuming the consummation of the Exchange Offer and the Consent Solicitation.

The Exchange Offer and the related Consent Solicitation will expire at 5:00 p.m., New York City time, on June 21, 2023, unless extended (such time and date as it may be extended, the "Expiration Date"), or earlier terminated.  Subject to the conditions, including the Minimum Participation Condition, included in the Exchange Offer Memorandum and the tender acceptance procedures described therein (i) for each $1,000 principal amount of Old Notes validly tendered (and not validly withdrawn) at or prior to 5:00 p.m., New York City time, on June 5, 2023, unless extended (such time and date with respect to the Exchange Offer, as the same may be extended, the "Early Tender Date") and accepted for exchange, Eligible Holders will be eligible to receive the applicable early exchange consideration set forth in the table below (the "Early Exchange Consideration") and (ii) for each $1,000 principal amount of Old Notes validly tendered after the Early Tender Date and at or prior to the Expiration Date and accepted for exchange, Eligible Holders will be eligible to receive the applicable late exchange consideration set forth in the table below (the "Late Exchange Consideration").  Rights to withdraw tendered Old Notes and revoke Consents terminate at 5:00 P.M. New York City time on June 5, 2023, unless extended (such time and date as it may be extended, the "Withdrawal Deadline"), except for certain limited circumstances where additional withdrawal rights are required by law or as required by the terms of the Support Agreement.  Each Eligible Holder that tenders Old Notes into the Exchange Offer will be deemed to have given its Consent to the Proposed Amendments with respect to those tendered Old Notes.  No additional consideration will be paid for Consents.  The Early Tender Date or the Expiration Date with respect to the Exchange Offer and Consent Solicitation can be extended independently of the Withdrawal Deadline for the Exchange Offer and Consent Solicitation.

The Old Notes will only be accepted for exchange by the Issuers in minimum principal amounts of $2,000 and integral multiples of $1,000 thereafter.  The Issuers will not accept any tender of Old Notes that would result in the issuance of less than $2,000 principal amount of Exchange Notes.  If, under the terms of the Exchange Offer, a tendering holder is entitled to receive Exchange Notes in a principal amount that is not an integral multiple of $1.00, the Issuers will round downward such principal amount of Exchange Notes to the nearest integral multiple of $1.00.  This rounded amount will be the principal amount of Exchange Notes that Eligible Holders will receive, and no additional cash will be paid in lieu of any principal amount of Exchange Notes not received as a result of rounding down.

The following table sets forth the Early Exchange Consideration and Late Exchange Consideration to be offered to Eligible Holders of the Old Notes in the Exchange Offers:

The Exchange Notes will bear interest at a rate to be determined based on the pricing of the First Lien Financing.

Eligible Holders may not tender their Old Notes pursuant to the Exchange Offer without delivering a Consent with respect to such series of Old Notes tendered pursuant to the related Consent Solicitation, and Eligible Holders may not deliver a Consent pursuant to the related Consent Solicitation without tendering the related Old Notes pursuant to the related Exchange Offer.

The consummation of each of the Exchange Offer, the Consent Solicitation and the Exchange Notes Issuance is subject to, and conditioned upon the satisfaction or waiver by the Issuers of, the Minimum Participation Condition, the Requisite Consents Condition, the First Lien Financing Condition, the ABL Amendment Condition and the General Conditions (each as defined in the Exchange Offering Memorandum).  Subject to applicable law, the Issuers may amend, extend, terminate or withdraw the Exchange Offer and/or Consent Solicitation without amending, extending, terminating or withdrawing the other, at any time and for any reason, including if any of the conditions set forth under "Conditions of the Exchange Offer and Consent Solicitation" in the Exchange Offering Memorandum with respect to the Exchange Offer is not satisfied as determined by the Issuers in their sole discretion.

The Exchange Notes and the offering thereof have not been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), or any state or foreign securities laws.  The Exchange Offer and Consent Solicitation will only be made, and the Exchange Notes are only being offered and issued, to holders of Old Notes who are (a) reasonably believed to be "qualified institutional buyers" ("QIBs") as defined in Rule 144A ("Rule 144A") under the Securities Act or (b) person that are outside of the "United States" other than "U.S. persons" as defined in Rule 902 under the Securities Act in offshore transactions in compliance with Regulation S ("Regulation S") under the Securities Act and (if resident in a member state of the European Economic Area) such person is not a "retail investor" (as defined in the Eligibility Letter (as defined below)) or (if resident in the United Kingdom) such person is not a "retail investor" and such person is a "relevant person" (as defined in the Eligibility Letter) and (if resident in Canada) it is a "non-U.S. qualified offeree" (as defined in the Eligibility Letter) (such holders, the "Eligible Holders").  Only Eligible Holders who have completed and returned the Eligibility Letter are authorized to receive or review the Exchange Offer Memorandum or to participate in the Exchange Offer and Consent Solicitation.  There will be no letter of transmittal for the Exchange Offer and Consent Solicitation.

Copies of all the documents relating to the Exchange Offer and Consent Solicitation may be obtained from the Exchange Agent, subject to confirmation of eligibility through the submission of an "Eligibility Letter," available at www.dfking.com/werner.  Alternatively, you may request the Eligibility Letter via email to [email protected] (please reference "Werner" in the subject line).

Eligible Holders of the Old Notes are urged to carefully read the entire Exchange Offering Memorandum, including the information presented under "Risk factors," and "Forward-looking statements," before making any decision with respect to the Exchange Notes Issuance, the Exchange Offer or the Consent Solicitation.  None of the Issuers, their respective subsidiaries, the Exchange Agent, the Dealer Manager (as defined below), the applicable trustees and collateral agents under the indentures governing the Old Notes and the Exchange Notes, or any of their respective affiliates, makes any recommendation as to whether holders of Old Notes should participate in the Exchange Notes Issuance, tender their Old Notes pursuant to the Exchange Offer or deliver Consents pursuant to the Consent Solicitation.  Each Eligible Holder must make its own decision as to whether to participate in the Exchange Notes Issuance and whether to tender its Old Notes and to deliver Consents and, if so, the principal amount of Old Notes as to which action is to be taken.

The Company has engaged J.P. Morgan Securities LLC as the sole dealer manager and consent solicitation agent (the "Dealer Manager") for the Exchange Offer and Consent Solicitation. D.F. King & Co., Inc. has been appointed as the Information and Exchange Agent (the "Exchange Agent").  Questions concerning the Exchange Offer and the Consent Solicitation may be directed to the Dealer Manager or the Exchange Agent, in accordance with the contact details shown on the back cover of the Exchange Offering Memorandum.

About WernerCo

WernerCo is a fully-integrated, international manufacturer and distributor of access products, fall protection equipment, secure storage systems and light-duty construction equipment.  WernerCo's business model and growth is defined by innovation and continuous improvement of the products, processes and services they deliver.

WernerCo products are Trusted Everywhere Work Gets Done™! For a full list of industry leading global brands, visit www.wernercoprofessionalbrands.com.

No Offer or Solicitation

This press release is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote, consent or approval in any jurisdiction in connection with the Exchange Notes Issuance, the Exchange Offer, the Consent Solicitation, the Transactions (each as defined in the Exchange Offering Memorandum), or the First Lien Financing, or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.  In particular, this communication is not an offer of securities for sale into the United States.  No offer of securities shall be made in the United States absent registration under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.

Cautionary Note Regarding Forward-Looking Statements

Certain statements made herein may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including any statements regarding the consummation of the Exchange Offer, Consent Solicitation and other related transactions.  These forward-looking statements generally are identified by the words such as "believes", "expects", "may", "are expected to", "intends", "will", "will continue", "should", "could", "would be", "seeks", "approximately", "estimates", "predicts", "projects", "aims" or "anticipates", or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions, involve a number of risks and uncertainties.  Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.  Although Werner believes the expectations reflected in any forward-looking statement are based on reasonable assumptions, it can give no assurance that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors.  Such factors include, but are not limited to: our dependence on key customers; our ability to renew or obtain new and favorable agreements with our home center retailer customers; changes in customer purchasing practices, particularly a shift in distribution channels towards e-commerce; our ability to successfully develop new product lines and products, or to improve existing product lines and products or maintain our effectiveness in reaching consumers through rapidly evolving communication media; the potential for product recalls, pending or threatened litigation or disputes, particularly related to product liability, and the appropriateness of our insurance to cover such eventuality; risks associated with sourcing and manufacturing abroad; risks associated with acquisitions and business reorganizations, which may result in significant costs and certain risks for our business and operations; the impact of governmental regulations, including environmental laws, health and safety regulations and antitrust laws; exposure to local business risks in many different countries, including emerging markets; any negative impact on the reputation of, and value associated with, our brand names; our trademark protection, patent protection, trade secret protection and confidentiality agreements with employees may not be sufficient for the protection of our brands, products, processes and other material know-how; at-will termination rights in customer agreements, which may add a layer of uncertainty in predicting future results; contractual limitations on our ability to supply our products in particular markets, which impose requirements on the volumes of and price at which we must purchase certain materials; our marketing activities may not be successful; negative global economic trends could adversely affect our business; the regulatory uncertainty in the United Kingdom and the European Union following Brexit; our large fixed costs; disruptions in availability or increases in the prices of fuel and key commodities; our dependence on our information technology systems, and potential for a cybersecurity-related attack; the highly competitive nature of our markets; our ability to generate sufficient cash from operations and to raise capital; failure to maintain effective internal control over financial reporting at a reasonable assurance level; our material weakness related to intercompany balance and transaction process; not being subject to the Sarbanes-Oxley Act of 2002; failures of financial institutions and disruptions in the global credit and financial markets; inflationary or deflationary economic conditions which could affect the ability to obtain raw materials, component parts, freight, energy, labor and sourced finished goods in a timely and cost-effective manner, as well as lead to changes in interest rate environments; the possibility of having to write-down all or part of our goodwill or other intangible assets; our intra-group transfer pricing policies; the retention and availability of qualified employees, and specifically of key personnel having special technical knowledge, and the effective succession of senior management; natural disasters, climate-related impacts, or other unanticipated catastrophes; our commodity price hedging arrangements; our significant leverage may make it difficult for us to service our debt, including the notes, and operate our business; to service our indebtedness, we will require a significant amount of cash and our ability to generate cash depends on many factors beyond our control; the First Lien Financing may be delayed or cancelled; we are dependent upon our lenders for financing to execute our business strategy and meet our liquidity needs; our ability to obtain additional capital on commercially reasonable terms may be limited; conditions in the capital, credit and commodities markets and in the overall economy; restrictive covenants in our existing debt facilities may restrict our ability to operate our business and a failure to comply with these covenants, including as a result of events beyond our control, could result in an event of default; foreign exchange risks, including risks associated with changes in currency exchange rates and hedging and our exposure to the financial risks associated with interest rate fluctuations on our variable rate debt.

Forward-looking statements speak only as of the date they are made.  Werner undertakes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise, except as required by law.

Media Contact: 

Angie Maddox, Seed Factory, 404-996-4041; [email protected]

SOURCE WernerCo