Maxar Technologies Inc. (Form: 8-K/A, Received: 04/14/2020 17:26:11)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 14, 2020 (April 8, 2020)

MAXAR TECHNOLOGIES INC.

(Exact name of Registrant as specified in its charter)


Delaware	001-38228	83-2809420
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1300 W. 120^th Avenue, Westminster, Colorado		80234
(Address of principal executive offices)		(Zip Code)

303-684-7660
(Registrant’s telephone number, including area code)

N/A

(Former name or address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common stock, at $0.0001 par value	MAXR	New York Stock Exchange, Toronto Stock Exchange
Preferred Stock Purchase Right	—	—

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:


☐	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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

EXPLANATORY NOTE

This amended Current Report on Form 8-K is being filed to include the pro forma consolidated financial information of the Company required by Item 9.01(b) of Form 8-K, which information is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On April 8, 2020, Maxar Technologies Inc. (“Maxar” or “Company”) completed the previously announced sale by Maxar and Maxar Technologies Holdings Inc., a Delaware corporation and a wholly-owned subsidiary of Maxar (“Maxar Holdings” and, together with Maxar, “Sellers”), of the MDA business pursuant to the Stock Purchase Agreement, dated as of December 29, 2019 (as amended from time to time, the “Agreement”), between the Sellers and Neptune Acquisition Inc., a corporation existing under the laws of the Province of British Columbia and an affiliate of Northern Private Capital Ltd., for an aggregate purchase price of approximately CAD$1.0 billion (“Transaction”), subject to customary purchase price adjustments set forth therein, including for working capital, cash and debt and as otherwise set forth in the Agreement.

The foregoing description of the Transaction does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on December 30, 2019, and the full text of which is incorporated herein by reference.

Item 8.01 Other Events.

On April 8, 2020, the Company issued a press release to announce the completion of the Transaction. The press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated by reference herein.

Cautionary Note Regarding Forward-Looking Statements

Certain statements and other information included in this Current Report constitute “forward-looking information” or “forward-looking statements” (collectively, “forward-looking statements”) under applicable securities laws. Statements including words such as “may”, “will”, “could”, “should”, “would”, “plan”, “potential”, “intend”, “anticipate”, “believe”, “estimate” or “expect” and other words, terms and phrases of similar meaning are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties, as well as other statements referring to or including forward-looking information included in this Current Report.

Forward-looking statements are subject to various risks and uncertainties which could cause actual results to differ materially from the anticipated results or expectations expressed in this Current Report. As a result, although management of the Company believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. The risks that could cause actual results to differ materially from current expectations include, but are not limited to, the risk factors and other disclosures about the Company and its business included in the Company’s continuous disclosure materials filed from time to time with Canadian and U.S. securities regulatory authorities, which are available online under the Company's EDGAR profile at www.sec.gov, under the Company’s SEDAR profile at www.sedar.com or on the Company's website at www.maxar.com.

The forward-looking statements contained in this Current Report are expressly qualified in their entirety by the foregoing cautionary statements. All such forward-looking statements are based upon data available as of the date of this Current Report or other specified date and speak only as of such date. The Company disclaims any intention or obligation to update or revise any forward-looking statements in this Current Report as a result of new information or future events, except as may be required under applicable securities legislation.

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The unaudited pro forma consolidated financial information of the Company required by Item 9.01(b) of Form 8-K is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.

(d) Exhibits.


Exhibit No.	Description
2.1*	Stock Purchase Agreement, dated as of December 29, 2019, by and among Maxar Technologies Inc., Maxar Technologies Holdings Inc., and Neptune Acquisition Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Maxar Technologies Inc. filed with the SEC on December 30, 2019).
99.1	Press Release, dated April 8, 2020.
99.2	Unaudited Pro Forma Condensed Consolidated Financial Information.
104	The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.

* Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and attachments have been omitted and will be furnished to the SEC supplementally upon request.

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.

Date: April 14, 2020	Maxar Technologies Inc.


	By:	/s/ Biggs C. Porter
		Name: Biggs C. Porter
		Title: Executive Vice President, Chief Financial Officer

Exhibit 99.2

MAXAR TECHNOLOGIES INC.

Unaudited Pro Forma Condensed Consolidated Financial Information

INTRODUCTION

On April 8, 2020, Maxar Technologies Inc. (“Maxar” or the “Company”) completed the previously announced sale by Maxar and Maxar Technologies Holdings Inc., a Delaware corporation and a wholly-owned subsidiary of Maxar (“Maxar Holdings” and, together with Maxar, the “Sellers”), of the MDA Business (as defined below) to Neptune Acquisition Inc., a corporation existing under the laws of the Province of British Columbia and an affiliate of Northern Private Capital Ltd.. The transaction included all of MDA’s Businesses, encompassing ground stations, radar satellite products, robotics, defense and satellite components (collectively, the “MDA Business”). The unaudited pro forma condensed consolidated financial information presented herein is derived from the historical consolidated financial statements of the Company. Unless otherwise noted, for the purposes of this unaudited pro forma condensed consolidated financial information, all references to “$” or dollars shall mean United States Dollars.

The accompanying unaudited pro forma condensed consolidated financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the financial statements and related notes contained in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2019, as well as other financial information filed with the Securities and Exchange Commission.

The unaudited pro forma condensed consolidated financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that might have been achieved had the transaction occurred as of an earlier date, and they are not necessarily indicative of future operating results or financial position. These pro forma amounts do not, therefore, project Maxar’s financial position or results of operations for any future date or period.

MAXAR TECHNOLOGIES INC.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

(In millions)


	Historical		Pro Forma			Pro Forma
	December 31, 2019		Adjustments		Notes	December 31, 2019
Revenues:
Product	$	560	$			$	560
Service		1,106					1,106
Total revenues	$	1,666	$			$	1,666
Costs and expenses:
Product costs, excluding depreciation and amortization		593					593
Service costs, excluding depreciation and amortization		382					382
Selling, general and administrative		325					325
Depreciation and amortization		376					376
Impairment losses		14					14
Satellite insurance recovery		(183)					(183)
Gain on sale of assets		(136)					(136)
Operating income		295					295
Interest expense, net		219		(30)	(a)		189
Other (income) expense, net		(1)					(1)
Income before taxes		77		30			107
Income tax expense		5					5
Equity in (income) from joint ventures, net of tax		(11)					(11)
Net income from continuing operations	$	83	$	30		$	113

Basic income from continuing operations	$	1.39				$	1.89
Diluted income from continuing operations	$	1.38				$	1.87

Weighted-average shares outstanding:
Basic		59.6					59.6
Diluted		0.6					0.6
Weighted average number of common shares outstanding-diluted		60.2					60.2

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

MAXAR TECHNOLOGIES INC.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

(In millions, except per share data)


	Historical		Pro Forma			Pro Forma
	December 31, 2019		Adjustments		Notes	December 31, 2019
Current assets:
Cash and cash equivalents	$	59	$	46	(b)	$	105
Trade and other receivables, net		357					357
Inventory		20					20
Advances to suppliers		42					42
Prepaid and other current assets		32					32
Current assets held for sale		751		(751)	(c)		—
Total current assets		1,261		(705)			556
Non-current assets:
Orbital receivables		382					382
Property, plant, and equipment, net		758					758
Intangible assets, net		991					991
Non-current operating lease assets		176					176
Goodwill		1,455					1,455
Other non-current assets		134					134
Total assets	$	5,157	$	(705)		$	4,452

Current liabilities:
Accounts payable	$	153	$			$	153
Accrued liabilities		130		25	(d)		155
Accrued compensation and benefits		93					93
Contract liabilities		271					271
Current portion of long-term debt		30		(20)	(e)		10
Current operating lease liabilities		40					40
Other current liabilities		49					49
Current liabilities held for sale		230		(230)	(c)		—
Total current liabilities		996		(225)			771
Non-current liabilities:
Pension and other postretirement benefits		197					197
Contract liabilities		4					4
Operating lease liabilities		173					173
Long-term debt		2,915		(660)	(e)		2,255
Other non-current liabilities		110					110
Total liabilities		4,395		(885)			3,510

Stockholders' equity:
Common stock		—					—
Additional paid-in capital		1,784					1,784
Accumulated deficit		(1,082)		180	(f)		(902)
Accumulated other comprehensive income		59					59
Total Maxar stockholders' equity		761		180			941
Noncontrolling interest		1
Total stockholders' equity		762		180			942
Total liabilities and stockholders’ deficit	$	5,157	$	(705)		$	4,452

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

MAXAR TECHNOLOGIES INC.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

(In millions)

1. BASIS OF PRESENTATION

The unaudited pro forma condensed consolidated balance sheet is based on Maxar’s historical consolidated financial

statements as adjusted to give effect to the sale of the MDA Business. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2019 has been adjusted to give effect to the sale of the MDA Business as if it had occurred on January 1, 2019 and the unaudited pro forma condensed consolidated balance sheet as of December 31, 2019 has been adjusted to give effect to the sale of the MDA Business as if it had occurred on December 31, 2019. The Company previously disclosed the MDA Business as discontinued operations for all periods presented within the Company’s Form 10-K for the year ended December 31, 2019.

2. PRO FORMA ADJUSTMENTS

(a)Represents the reduction of interest expense incurred had the Company used the cash proceeds from the sale of the MDA Business to make debt repayments on the senior secured first lien term B facility maturing in October 2024 (the “Term Loan B”) debt as of January 1, 2019. The Term Loan B debt bears interest, at the Company’s option, at either (i) U.S. dollar LIBOR plus 275 basis points per annum, or (ii) the adjusted base rate, plus a margin of 175 basis points per annum. For the purposes of this pro forma adjustment, the Company has used the interest rate effective as of March 31, 2020. An eighth of a percentage point (0.125%) increase or decrease in the interest rate would result in a change in interest expense of approximately $1 million for the year ended December 31, 2019.

(b)Represents certain cash proceeds received in accordance with the closing of the sale of the MDA Business. The purchase price of $729 million ($1 billion Canadian dollars) was adjusted by $3 million pursuant to customary purchase price adjustments for working capital, cash and debt, resulting in cash proceeds of $726 million. Pursuant to that certain Restated Credit Agreement, dated as of October 5, 2017 (as amended, supplemented or otherwise modified, the “Credit Agreement”), governing the Company’s senior secured credit facilities and that certain Indenture, dated as of December 2, 2019 (as amended, supplemented or otherwise modified, the “2023 Notes Indenture”), governing the 9.750% Senior Secured Notes due 2023, net cash proceeds received by the Company, as defined in the Credit Agreement and the 2023 Notes Indenture, are to be used to repay outstanding debt. Pursuant to such definitions, the net cash proceeds of the sale of the MDA Business are $680 million. The difference between this amount and the purchase price, as adjusted, of $726 million, relates to expenditures of $25 million to pay certain closing costs and $21 million held in reserves associated with the transaction.

(c)Represents the elimination of assets and liabilities held for sale attributable to the sale of the MDA Business.

(d)Represents an increase in accrued liabilities related to closing costs of $25 million incurred by the Company in connection with the sale of the MDA Business.

(e)Represents the use of cash proceeds received from the sale of the MDA Business to make debt repayments. For the purposes of this unaudited pro forma condensed consolidated financial information, the Company has assumed that $680 million of the cash proceeds received are used to pay down debt related to the Term Loan B. Under the terms of the 2023 Notes Indenture, the Company has up to 365 days to apply the proceeds in accordance with the “Asset Sales” covenant set forth therein, including but not limited, to repurchase, prepay or consummate an asset sale with respect to the Notes, in each case, in the amounts required by the terms of the 2023 Notes Indenture. The Company has assumed solely for purposes of this presentation that (i) the Company will make an asset sale offer to all holders of Notes at par plus accrued and unpaid interest in accordance with the indenture governing the Notes, (ii) such asset sale offer will not be accepted by any holders of Notes and (iii) no repurchases or prepayments with respect to any proceeds will otherwise be consummated with the proceeds of the sale of the MDA Business. However, there can be no assurance as to how the pay down from the proceeds of the sale of the MDA Business will be allocated between the Term Loan B Facility and the Notes as this depends on the Company’s liability management strategy and various factors beyond the Company’s control.

(f)Represents the impact to accumulated deficit for the estimated gain arising from the closing of the sale of the MDA Business. The estimated gain due to the sale of the MDA Business has not been reflected in the unaudited pro forma condensed consolidated statement of operations as it is considered to be nonrecurring in nature.