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): November 18, 2015

 

AgroFresh Solutions, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware
(State or other jurisdiction
of incorporation)

 

001-36316
(Commission File Number)

 

46-4007249
(I.R.S. Employer
Identification Number)

 

100 S. Independence Mall West
Philadelphia, PA

(Address of principal executive offices)

 

19106
(Zip code)

 

(215) 592-3687
(Registrant’s telephone number, including area code)

 

Not Applicable
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

 

o                                     Written communications pursuant to Rule 425 under the Securities Act

 

o                                     Soliciting material pursuant to Rule 14a-12 under the Exchange Act

 

o                                     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

 

o                                     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

 

 

 



 

Item 1.01.  Entry into a Material Definitive Agreement.

 

On November 18, 2015, two wholly-owned subsidiaries of AgroFresh Solutions, Inc. (the “Company”), AgroFresh Inc. and AF Solutions Holdings LLC, entered into Amendment No. 1 (the “Amendment”) to the Credit Agreement, dated as of July 31, 2015 (the “Credit Agreement”), with Bank of Montreal, as administrative agent (the “Agent”), and the lenders party thereto. An existing provision in the Credit Agreement permits the Company, subject to an overall cap of $12 million per fiscal year and certain other conditions, to pay dividends to the Company’s public stockholders and to redeem or repurchase, through July 31, 2016, the Company’s outstanding warrants for an aggregate purchase price of up to $10 million.  The Amendment expanded the scope of this provision to also permit the repurchase of shares of the Company’s outstanding common stock or other equity securities (subject to the same overall cap and other conditions). Other than the foregoing, the Amendment does not modify the terms of the Credit Agreement.

 

A copy of the Amendment is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference, and the foregoing description of the Amendment is qualified in its entirety by reference thereto.

 

Item 7.01  Regulation FD Disclosure.

 

On November 18, 2015, the Company announced, among other things, updated guidance for the year ending December 31, 2015. The update is described in the Company’s news release dated November 18, 2015, a copy of which is furnished with this Current Report on Form 8-K as Exhibit 99.1.

 

The information contained in this Item 7.01 and in Exhibit 99.1 shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in any such filing.

 

Item 8.01  Other Events.

 

On November 18, 2015, the Company also announced that its board of directors had authorized a share repurchase program (the “Repurchase Program”). The Repurchase Program authorizes the Company to repurchase in the aggregate up to $10 million of the Company’s publicly-traded shares of common stock. The Repurchase Program will remain in effect for a period of one year, until November 17, 2016, unless terminated earlier by the Company. Under the Repurchase Program, share repurchases may be made on the open market or through private transactions, as determined by the Company’s management and in accordance with prevailing market conditions and Securities and Exchange Commission requirements, including Rule 10b-18 promulgated under the Exchange Act. The timing and amount of any share repurchases will depend on the terms and conditions contained in any purchase plan adopted by the Company pursuant to Rule 10b5-1 under the Exchange Act, the market price of the Company’s common stock and trading volumes, and no assurance can be given that any particular amount of shares

 

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will be repurchased. The Company is not obligated to acquire a particular number of shares, and the program may be discontinued at any time at the Company’s discretion.

 

Item 9.01 Exhibits

 

(d) Exhibits.

 

Exhibit
Number

 

Exhibit

 

 

 

10.1

 

Amendment No. 1 to Credit Agreement, dated as of November 18, 2015.

99.1

 

Press Release issued by the Company on November 18, 2015.

 

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SIGNATURE

 

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.

 

Dated: November 18, 2015

 

 

AGROFRESH SOLUTIONS, INC.

 

 

 

By:

/s/ Thomas Ermi

 

 

Name: Thomas Ermi

 

 

Title: Vice President and General Counsel

 

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EXHIBIT INDEX

 

Exhibit
Number

 

Exhibit

 

 

 

10.1

 

Amendment No. 1 to Credit Agreement, dated as of November 18, 2015.

99.1

 

Press Release issued by the Company on November 18, 2015.

 

5


Exhibit 10.1

 

AMENDMENT NO. 1 TO CREDIT AGREEMENT , dated as of November 18, 2015 (this “ Amendment ”), among AF SOLUTIONS HOLDINGS LLC, as Holdings, AGROFRESH INC. (the “ Borrower ”), the Lenders party hereto and BANK OF MONTREAL, as administrative agent (in such capacity, the “ Administrative Agent ”) for the Lenders (such capitalized term and, unless otherwise specified, all other capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement referred to below).

 

WHEREAS, the Borrower, the Lenders party thereto and the Administrative Agent and the other parties named therein, are party to that certain Credit Agreement, dated as of July 31, 2015 (as further amended, amended and restated, supplemented or otherwise modified to (but not including) the date hereof, the “ Credit Agreement ”), pursuant to which the Lenders have made certain extensions of credit available to and on behalf of the Borrower; and

 

WHEREAS, the Borrower and the Lenders party hereto have agreed to amend the Credit Agreement, but only on the terms and conditions herein set forth.

 

NOW, THEREFORE, in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

Section 1.                                            Credit Agreement Amendment .  Section 6.06(a) of the Credit Agreement is amended by replacing clause (vi)(B) thereof its entirety with the following:

 

“(B) in addition to the foregoing Restricted Payments, up to an amount not to exceed $12,000,000 in any fiscal year of the Borrower to (1) pay dividends to Boulevard’s public common stockholders, (2) make payments on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in Holdings, the Borrower or any Restricted Subsidiary or in respect of any Equity Interests in Boulevard held by Boulevard’s common stockholders, and/or (3) on or prior to July 31, 2016, redeem or repurchase outstanding warrants of Boulevard for an aggregate repurchase price not in excess of $10,000,000.”.

 

Section 2.                                            Conditions to Effectiveness of Amendment .  This Amendment shall become effective on the date (the “ Amendment No. 1 Effective Date ”) on which each of the following conditions are satisfied or waived by each applicable party:

 

(a)                                                          The Administrative Agent shall have received executed signature pages to this Amendment from the Lenders, the Borrower and each other Loan Party;

 

(b)                                                          The representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects on and as of the Amendment No. 1 Effective Date; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided further that any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct in all respects on the date of such credit extension or on such earlier date, as the case may be;

 

(c)                                                           At the time of and immediately after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing;

 

(d)                                                          The Borrower shall have paid or caused to be paid all reasonable and

 



 

documented out-of-pocket costs and expenses incurred by the Administrative Agent and its Affiliates (without duplication) including the reasonable fees, charges and disbursements of legal counsel to the Administrative Agent incurred in connection with this Amendment; and

 

(e)                                                           The Borrower shall have paid, (i) for the account of each Lender that has returned an executed signature page to this Amendment to the Administrative Agent at or prior to 5:00 p.m. (New York City time) on November 12, 2015, consent fees in the amount equal to 0.05% of the sum, without duplication, of such Lender’s outstanding Loans and Commitments.

 

Section 3.                                            Counterparts .  This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile or other electronic transmission (i.e. a “PDF” or “TIF”) shall be effective as delivery of a manually executed counterpart hereof.

 

Section 4.                                            Governing Law .   THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  SECTIONS 9.09 AND 9.10 OF THE CREDIT AGREEMENT ARE HEREBY INCORPORATED BY REFERENCE INTO THIS AMENDMENT MUTATIS MUTANDIS AND SHALL APPLY HERETO.

 

Section 5.                                            Headings .  The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 6.                                            Reaffirmation of the Loan Parties .  Each Loan Party hereby consents to the amendment of the Credit Agreement effected hereby and confirms and agrees that, notwithstanding the effectiveness of this Amendment, each Loan Document to which such Loan Party is a party is, and the obligations of such Loan Party contained in the Credit Agreement, this Amendment or in any other Loan Document to which it is a party are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, in each case as amended by this Amendment.  For greater certainty and without limiting the foregoing, each Loan Party hereby confirms that the existing security interests granted by such Loan Party in favor of the Secured Parties pursuant to the Loan Documents in the Collateral described therein shall continue to secure the obligations of the Loan Parties under the Credit Agreement and the other Loan Documents as and to the extent provided in the Loan Documents

 

Section 7.                                            Amendment, Modification and Waiver .  This Amendment may not be amended, modified or waived except in accordance with Section 9.02 of the Credit Agreement.

 

Section 8.                                            Entire Agreement .  This Amendment, the Credit Agreement, and the other Loan Documents constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties hereto with respect to the subject matter hereof.  Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any party under, the Credit Agreement, nor alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect.  It is understood and agreed that each reference in each Loan Document to the Credit Agreement, whether direct or indirect, shall hereafter be deemed to be a reference to the Credit Agreement as amended hereby and that this Amendment is a Loan Document.

 

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Section 9.                                            Severability .  In the event any one or more of the provisions contained in this Amendment should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein, to the fullest extent permitted by applicable law, shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

 

 

 

AF SOLUTIONS HOLDINGS LLC, as Holdings

 

 

 

 

 

By:

/s/ Margaret M. Loebl

 

 

Name:

Margaret M. Loebl

 

 

Title:

EVP & CFO

 

 

 

 

 

 

 

 

 

AGROFRESH INC., as Borrower

 

 

 

 

 

By:

/s/ Margaret M. Loebl

 

 

Name:

Margaret M. Loebl

 

 

Title:

EVP & CFO

 

[Signature Page to Amendment No. 1 to Credit Agreement]

 



 

 

Acknowledged and Accepted:

 

 

 

BANK OF MONTREAL,

 

 

 

as Administrative Agent

 

 

 

 

 

By:

/s/ Thomas Hasenauer

 

 

Name:

Thomas Hasenauer

 

 

Title:

Vice President

 

[Signature Page to Amendment No. 1 to Credit Agreement]

 



 

Lender’s Signature Pages on File With Agent

 


Exhibit 99.1

 

AgroFresh Solutions Clarifies Anticipated Full Year 2015 Results

 

Company Issues Updated Full Year 2015 Guidance

 

Expects Full Year Adjusted EBITDA in the Range of $87 Million to $93 Million

 

Announces $10 Million Share Repurchase Program

 

Philadelphia, PA, November 18, 2015 — AgroFresh Solutions, Inc. (NASDAQ: AGFS, AGFSW) (“AgroFresh” or the “Company”), a global leader in produce freshness solutions, announced today clarification of comments made on the Company’s third quarter earnings conference call held on November 16, 2015 regarding its anticipated financial results for the full year 2015, and also announced a $10 million share repurchase program.

 

Based on the Company’s strong year-to-date financial results and current expectations for the remainder of the year, AgroFresh expects to achieve full year Adjusted EBITDA in the range of $87 million to $93 million.

 

The Board of Directors of AgroFresh has also authorized a share repurchase program of up to $10 million of the Company’s common stock. Shares will be repurchased at the Company’s discretion based on ongoing assessments of the capital needs of the business, the market price of its common stock, and general market conditions. The repurchase program is anticipated to remain in effect for a period of one year, but may be suspended or discontinued at any time.

 

Thomas Macphee, Chief Executive Officer, commented, “As I shared on our third quarter earnings conference call, o ur core business is performing very well. With regard to the full year 2015, we expect to outperform the market as our very good organic growth from SmartFresh™ penetration of apples and other crops continues to offset much of the market’s overall expected decline from the record high of last year, which is being driven by adverse weather conditions in the northern hemisphere. Harvista™ will be relatively flat compared to last year’s results due to adverse weather in Turkey and lower customer use relative to last year’s record apple crop in Washington State. Based on these assumptions, we expect to achieve full year Adjusted EBITDA in the range of $87 million to $93 million and we expect to communicate to investors as more information becomes available.”

 

Mr. Macphee added, “We see strong momentum with SmartFresh™, are particularly pleased with the increased penetration that we are achieving in apples and other crops, and expect this growth to continue going forward. Customer feedback on Harvista™ has been very positive, its efficacy is now widely accepted, and I remain confident that we will continue to see strong, profitable growth for Harvista, which we expect will generate annual sales in the range of $50 million within the next five years. RipeLock™ is in early commercial trials and channel interest in this game-changing technology for bananas is very encouraging. We believe that the sales potential for RipeLock™ could be $25 million or more in five years. Overall, we believe that AgroFresh has strong organic growth potential to approximately double sales within the next five years. Reflecting our confidence in our growth strategy and expectations, as well as our commitment to enhancing long-term shareholder value, we are also announcing a share repurchase program.”

 



 

Contact Information

 

Margaret M. Loebl

Executive Vice President and Chief Financial Officer

AgroFresh Solutions, Inc.

+1 (215) 592-2820

 

Erica Bartsch

Sloane & Company

+1 (212) 446-1875

ebartsch@sloanepr.com

 

About AgroFresh

 

AgroFresh Solutions, Inc. (NASDAQ: AGFS) is a global industry leader in providing innovative data-driven specialty solutions aimed at enabling growers and packers of fresh produce to preserve and enhance the freshness, quality and value of fresh produce and to maximize the percentage of produce supplied to the market relative to the amount of produce grown. Its flagship product is the SmartFresh™ Quality System, a freshness protection technology proven to maintain firmness, texture and appearance of fruits during storage and transport. SmartFresh is currently commercialized in over 40 countries worldwide. For more information, please visit www.agrofresh.com.

 

Forward-Looking Statements

 

In addition to historical information, this release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Company expects or anticipates will or may occur in the future are forward-looking statements and are identified with, but not limited to, words such as “anticipate”, “believe”, “expect”, “estimate”, “plan”, “outlook”, and “project” and other similar expressions (or the negative versions of such words or expressions). Forward-looking statements include, without limitation, information concerning the Company’s possible or assumed future results of operations, including all statements regarding 2015 guidance, anticipated future growth, business strategies, competitive position, industry environment, potential growth opportunities and the effects of regulation. These statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s management’s control that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks include, without limitation, the risk that the Business Combination disrupts current plans and operations; the Company’s ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of the combined business to grow and manage growth profitably; costs related to the Business Combination and/or related to operating AgroFresh as a stand-alone public company; changes in applicable laws or regulations, and the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors. Additional risks and uncertainties are identified and discussed in the Company’s filings with the SEC, including the Quarterly Report on Form 10-Q filed on November 16, 2015, available at the SEC’s website at www.sec.gov.