| Item 1.01 | Entry Into a Material Definitive Agreement. |
On December 15, 2021, Ducommun LaBarge Technologies, Inc. (the “Buyer”), a wholly owned subsidiary of Ducommun Incorporated (the “Company”), entered into an Equity Purchase Agreement (the “Agreement”) with Mag Parent, Inc. (“Newco”) and Thomas B. Colby and Lyman J. Colby, to acquire 100% of the securities of Magnetic Seal Corp. (“Magnetic Seal”) from Newco (the “Transaction”). The closing of the Transaction is effective December 16, 2021 and resulted in Magnetic Seal becoming a wholly owned subsidiary of Buyer. The purchase price for the Transaction was $69.5 million, net of cash acquired (the “Purchase Price”), subject to adjustments for working capital. The Agreement contains customary representations and warranties, covenants and agreements of the parties thereto.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the actual terms of the Agreement, a copy of which is attached hereto as Exhibit 2.1 and incorporated herein by reference. The Agreement has been included to provide investors with information regarding its terms and is not intended to provide any financial or other factual information about Magnetic Seal, Buyer or the Company. In particular, the representations, warranties and covenants contained in the Agreement (i) were made only for purposes of that agreement, (ii) were solely for the benefit of the parties to the Agreement, (iii) may be subject to limitations agreed upon by the parties, including being qualified by disclosures made for the purposes of allocating contractual risk between the parties to the Agreement instead of establishing those matters as facts and (iv) may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company. Accordingly, investors should read the representations and warranties in the Agreement not in isolation but only in conjunction with the other information about the Company and its subsidiaries that the Company includes in reports, statements and other filings it makes with the Securities and Exchange Commission (the “SEC”).
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
The information set forth in Item 1.01 is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The Company utilized cash on hand and borrowed $65.0 million under its revolving credit facility (the “Revolving Credit Facility”) under the Amended and Restated Credit Agreement, dated November 21, 2018, as amended by the Incremental Term Loan Lender Joinder Agreement and Additional Credit Extension Amendment, dated December 20, 2019 (as amended, the “Credit Agreement”), among the Company, certain of its subsidiaries, Bank of America, N.A., as administrative agent, swingline lender and letter of credit issuer, and other lenders party thereto to fund a portion of the Purchase Price.
Summaries of the material terms of the Credit Agreement are included in the Company’s Current Reports on Form 8-K filed with the SEC on November 26, 2018 and December 20, 2019, respectively, and are incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
The information contained in this Current Report on Form 8-K that is furnished under this Item 7.01, including the accompanying Exhibit 99.1, is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section. The information contained in this Current Report on Form 8-K that is furnished under this Item 7.01, including the accompanying Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such a filing.
On December 16, 2021, the Company issued a press release announcing the Transaction.
A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
