GP STRATEGIES CORP (Form: 8-K, Received: 12/06/2018 08:19:01)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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) November 30, 2018

GP Strategies Corporation

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)





1-7234		52-0845774
(Commission File Number)		(IRS Employer Identification No.)

70 Corporate Center 11000 Broken Land Parkway, Suite 200, Columbia, MD		21044
(Address of Principal Executive Offices)		(Zip Code)

(443) 367-9600

(Registrant’s Telephone Number, Including Area Code)

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):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ 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

New Credit Agreement

On November 30, 2018, GP Strategies Corporation (the “Company”) entered into a Credit Agreement with PNC Bank, National Association, as administrative agent, and a syndicate of lenders (the "Credit Agreement"), replacing the prior credit agreement with Wells Fargo dated December 21, 2016, as amended on April 28, 2018 and June 29, 2018 (the "Original Credit Agreement"). The Credit Agreement provides for a revolving credit facility, which expires on November 29, 2023, and consists of:


•	a revolving loan facility with a borrowing limit of $200 million, including a $20 million sublimit for foreign borrowings;


•	an accordion feature allowing the Company to request increases in commitments to the credit facility by up to an additional $100 million;


•	a $20 million letter of credit sublimit; and


•	a swingline loan credit sublimit of $20 million.

Borrowings under the Credit Agreement may be in the form of Base Rate loans or Euro-Rate loans, at the option of the borrowers, and bear interest at the Base Rate plus 0.25 to 1.25% or the Daily LIBOR Rate plus 1.25% to 2.25%, respectively. Base Rate loans will bear interest at a fluctuating per annum Base Rate equal to the highest of: (i) the Overnight Bank Funding Rate, plus 0.5%, (ii) the Prime Rate, and (iii) the Daily LIBOR Rate, plus 100 basis points (1.0%); plus an Applicable Margin. Determination of the Applicable Margin is based on a pricing grid that is generally dependent upon the Company's Leverage Ratio (as defined) as of the end of the fiscal quarter for which consolidated financial statements have been most recently delivered. The maximum Applicable Margin under the Credit Agreement for Base Rate loans is 1.25% and for Euro-Rate loans is 2.25%.

The Credit Agreement contains customary representations, warranties and affirmative covenants. The Credit Agreement also contains customary negative covenants, subject to negotiated exceptions, including but not limited to: (i) liens, (ii) investments, (iii) indebtedness, (iv) significant corporate changes, including mergers and acquisitions, (v) dispositions, (vi) restricted payments, including stockholder dividends, and (vii) certain other restrictive agreements. The Credit Agreement also requires the Company to maintain the following financial covenants: i) a maximum Leverage Ratio of 3.25 to 1.0 for fiscal quarters ending through June 30, 2019 and 3.0 to 1.0 for fiscal quarters ending September 30, 2019 and thereafter, and ii) a minimum interest expense coverage ratio of 3.0 to 1.0.

The obligations under the Credit Agreement are guaranteed by certain of the Company’s subsidiaries (the “Guarantors”). As collateral security under the Credit Agreement and the guarantees thereof, the Company and the Guarantors have granted to the administrative agent, for the benefit of the lenders, a lien on, and first priority security interest in, substantially all of their tangible and intangible assets.

The proceeds of the Credit Agreement have been used, in part, to repay in full all outstanding borrowings under the Original Credit Agreement, and additional proceeds of the revolving credit facility are expected to be used for working capital and other general corporate purposes of the Company and its subsidiaries, including the issuance of letters of credit and Permitted Acquisitions, as defined.

As of November 30, 2018, after entering into the new Credit Agreement, the Company had $128.0 million of borrowings outstanding under the revolving credit facility and cash balances totaling $25.0 million.

Terms used, but not defined, in this Form 8-K have the meanings set forth in the Credit Agreement. The foregoing description of the Credit Agreement is not complete and is qualified in its entirety by reference to the full text of the Credit Agreement, a copy of which will be filed as an exhibit to the Company's Form 10-K for the year ending December 31, 2018.

Acquisition of TTi Global

On November 30, 2018, the Company entered into a Share Purchase Agreement with TTi Global, Inc. and its stockholders to acquire all of the outstanding shares of TTi Global Inc. The transaction under the Share Purchase Agreement includes the acquisition of TTi Global Inc.’s subsidiaries (except for its UK and Spain subsidiaries and dormant entities) and certain affiliated companies. The Company purchased TTi Global Inc.’s UK and Spain subsidiaries (which, together with the entities acquired under the Share Purchase Agreement, are referred to as “TTi Global”) in a separate transaction in August 2018. TTi Global is a provider of training, staffing, research and consulting solutions to industries across various sectors with automotive as a core focus. The total upfront purchase price for TTi Global was $19.2 million, which includes $3.0 million paid for the UK and Spain subsidiaries in August 2018, and $16.2 million for the remainder of TTi Global, which included $14.2 million of cash paid upon closing on November 30, 2018 and the assumption of a $2.0 million liability of TTi Global. The purchase price is subject to reduction based on a minimum working capital requirement, as defined in the Share Purchase Agreement.

The foregoing description of the Share Purchase Agreement is not complete and is qualified in its entirety by reference to the full text of the Share Purchase Agreement, a copy of which will be filed as an exhibit to the Company's Form 10-K for the year ending December 31, 2018.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under a Off-Balance Sheet Arrangement of a Registrant.

The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.

Item 8.01 Other Events

On December 5, 2018, GP Strategies issued press releases announcing the new Credit Agreement and the acquisition of TTi Global. Copies of these press releases are attached as Exhibits 99.1 and 99.2, respectively, to this report and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.



Exhibit No.		Description
99.1		Press release dated December 5, 2018 titled "GP Strategies Enters into New $200 Million Credit Facility."
99.2		Press release dated December 5, 2018 titled "GP Strategies Acquires TTi Global."

SIGNATURES

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.





	GP STRATEGIES CORPORATION

Date: December 6, 2018	/s/ Kenneth L. Crawford
	Kenneth L. Crawford
	Executive Vice President, General Counsel & Secretary

EXHIBIT INDEX



Exhibit No.		Description
99.1		Press release dated December 5, 2018 titled "GP Strategies Enters into New $200 Million Credit Facility."
99.2		Press release dated December 5, 2018 titled "GP Strategies Acquires TTi Global."

Exhibit 99.1

NEWS RELEASE

GP Strategies Enters into New $200 Million Credit Facility

Columbia, MD. December 5, 2018 - Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) announced today that it has entered into a new five-year $200 million credit facility with a syndicate of lenders led by PNC Capital Markets LLC and Wells Fargo Securities, LLC, as joint lead arrangers, and PNC Bank, National Association, as administrative agent. The new credit facility includes a $200 million revolving line of credit and an accordion feature allowing the Company to increase commitments to the credit facility by up to an additional $100 million. Borrowings under the Company’s prior credit agreement were refinanced in full.

The new credit facility has a five-year term which expires in November 2023, with no scheduled payments of principal until maturity, and bears interest at variable market rates, as defined in the agreement, plus a spread based on the Company’s leverage ratio. Interest rates on the new credit facility are reduced between 25 and 50 basis points compared to its prior credit facility, depending on the Company’s current leverage ratio.

“We are very pleased with our new credit facility which provides us more favorable terms than our previous credit facility and will give us the capability to execute our long-term growth strategy,” said Michael Dugan, Chief Financial Officer of GP Strategies Corporation.

As of November 30, 2018, after entering into the new credit facility, the Company had $128.0 million of borrowings outstanding and cash balances totaling $25.0 million.

About GP Strategies

GP Strategies Corporation (NYSE: GPX) is a global performance improvement solutions provider of training, digital learning solutions, management consulting and engineering services. GP Strategies’ solutions improve the effectiveness of organizations by delivering innovative and superior training, consulting and business improvement services, customized to meet the specific needs of its clients. Clients include Fortune 500 companies, manufacturing, process and energy industries, and other commercial and government customers.

Forward Looking Statement

We make statements in this press release that are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. These statements reflect our current expectations concerning future events and results. We use words such as "expect," "intend," "believe," "may," "should," "could," "anticipates," and similar expressions to identify forward-looking statements, but their absence does not mean a statement is not forward-looking. These statements are not guarantees of our future performance and are subject to risks, uncertainties, and other important factors that could cause our actual performance or achievements to be materially different from those we project. For a full discussion of these risks, uncertainties, and factors, we encourage you to read our documents on file with the Securities and Exchange Commission, including those set forth in our

periodic reports under the forward-looking statements and risk factors sections. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

# # # #

C O N T A C T S:



Scott N. Greenberg	Michael R. Dugan	Ann M. Blank
Chief Executive Officer	Chief Financial Officer	Investor Relations
443-367-9640	443-367-9627	443-367-9925

Exhibit 99.2

NEWS RELEASE

GP Strategies Acquires TTi Global

Setting the Stage to Capitalize on Key Market Trends in Global Automotive Industry

Columbia, MD. December 5, 2018 - Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) announced that it has acquired TTi Global, a provider of training, staffing, research and consulting solutions to the global automotive industry and other key sectors. This acquisition significantly enhances GP Strategies' service offerings and customer base in the automotive industry, adding service training and multiple new markets, customer relationships and capabilities.

TTi Global highlights include:


•	Founded in 1976 and headquartered in Bloomfield Hills, Michigan


•	Operates globally with offices in Australia, Brazil, Chile, China, India, Japan, Mexico, Peru, South Africa, Thailand, The Philippines, United Arab Emirates, United Kingdom and the United States


•	Offers a wide range of services, including technical and non-technical training, staff augmentation services and global research consulting


•	Annual revenues of over $50 million expected

"The TTi acquisition is an important step in our progress towards the financial goals set forth in our previously disclosed long-term strategic plan, and most importantly putting GP Strategies back on a growth track," stated Scott N. Greenberg, Chief Executive Officer of GP Strategies. “This acquisition is directly aligned with our strategy of accelerating growth in the automotive industry, a large market with significant growth potential for our business."

“The addition of TTi Global enhances GP Strategies’ global platform as a comprehensive training provider, providing us with greater scale and depth of services to capitalize on global training opportunities,” stated Adam H. Stedham, President of GP Strategies. “This acquisition will deliver immediate benefits to GP Strategies, giving us the ability to provide complete training services for dealership sales and service staff, as well as increased capability across Asia and Latin America in both automotive and non-automotive markets. In addition, this acquisition adds staff augmentation as a new service line for GP Strategies, allowing us to serve our clients’ staffing needs. As clients continue to look for ways to transform their business and enhance customer experience, we are now better positioned to help them on that journey."

"The opportunity to join GP Strategies is exciting," said Lori Blaker, President & Chief Executive Officer of TTi Global. "Our shared expertise and experience in the automotive industry will enable us to broaden and deepen the value we deliver to our clients. Our combined leadership enhances our ability to serve as an automotive strategic partner."

Investor Webcast and Conference Call

GP Strategies has scheduled an investor webcast and conference call for Thursday, December 6, 2018 at 9:00 a.m. Eastern Time. Prepared remarks providing an overview of the TTi Global acquisition will be followed by a question and answer period with GP Strategies’ executive management team.

The conference call may be accessed via webcast at:

https://services.choruscall.com/links/gpx181206.html or by calling +1 (833) 535-2204 within the US, or +1 (412) 902-6747 internationally, and requesting the “GP Strategies Conference.” The presentation slides broadcast via the webcast will also be available on the Investors section of GP Strategies’ website the morning of the call. Participants must be logged in via telephone to submit a question to management during the call. The webcast will be archived on the Investors section of GP Strategies’ website and will remain available for 90 days. Alternatively, a telephonic replay of the conference call will be available for one week and may be accessed by dialing +1 (877) 344-7529 in the US, or +1 (412) 317-0088 internationally, and requesting conference number 10126811.

About TTi Global

TTi Global provides staffing, learning, research and consulting solutions to industries across various sectors with automotive as a core focus. TTi Global oversees operations on six continents with offices spanning the globe. With a staff of over 1,100 employees in international operations, they offer a wide range of services, tailor made to drive business goals, including business consulting, research, staffing, workforce development and learning solutions. TTi Global world headquarters are in Bloomfield Hills, Michigan.

About GP Strategies

GP Strategies Corporation (NYSE: GPX) is a global performance improvement solutions provider of training, digital learning strategies and solutions, management consulting, and engineering services. GP Strategies' solutions improve the effectiveness of organizations by delivering innovative and superior training, consulting, and business improvement services, customized to meet the specific needs of its clients. Clients include Fortune 500 companies, manufacturing, process and energy industries, and other commercial and government customers.

Forward Looking Statement

# # # #

C O N T A C T S:



Scott N. Greenberg	Michael R. Dugan	Ann M. Blank
Chief Executive Officer	Chief Financial Officer	Investor Relations
443-367-9640	443-367-9627	443-367-9925