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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): June 28, 2011 (June 23, 2011)
(Exact Name of Registrant as Specified in Charter)
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Tennessee
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1-3083
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62-0211340 |
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(State or Other
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(Commission
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(I.R.S. Employer |
Jurisdiction of
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File Number)
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Identification No.) |
Incorporation) |
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1415 Murfreesboro Road |
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Nashville, Tennessee
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37217-2895 |
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(Address of Principal Executive Offices)
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(Zip Code) |
(Registrants Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Second Amended and Restated Credit Facility
On June 23, 2011, Genesco Inc. (the Company) entered into a First Amendment (the
Amendment) to Second Amended and Restated Credit Agreement (the Credit Facility) dated January
21, 2011 by and among the Company, certain subsidiaries of the Company party thereto, as other
borrowers, the lenders party thereto and Bank of America, N.A., as administrative agent and
collateral agent. The Credit Facility was amended to permit the Schuh acquisition (described in
Item 2.02 below). The other material terms of the Amendment are as follows:
Availability
The aggregate principal amount available under the Credit Facility was increased from $300.0
million to $375.0 million. In addition, the Companys option to further increase the availability
under the Credit Facility was reduced from $150.0 million to $75.0 million. The Credit Facility
was also amended to put in place a $30.0 million A-1 Tranche on a first out, last in basis. The
A-1 Tranche provides for an additional 10% availability of eligible inventory (declining to a 7.5%
advance rate after one year and then to a 5% advance rate after two years) plus an additional 5%
availability of eligible wholesale receivables (other than wholesale receivables of the Lids Team
Sports business) (declining to a 2.5% advance rate after one year and then 0.0% after two years)
plus an additional 5% of eligible credit card and debit card receivables less applicable reserves.
Collateral
In addition to the security previously granted to the lenders pursuant to the Credit Facility,
the Company has pledged 65% of its interest in Genesco (UK) Limited (described below).
Interest and Fees
The Companys borrowings under the A-1 Tranche bear interest at varying rates that, at the
Companys option, can be based on LIBOR or the Base Rate (as defined) plus in each case an
Applicable Margin (as defined and based on average Excess Availability during the prior quarter).
Covenants
The Amendment also permits the Company to incur up to $250.0 million of senior debt provided
that certain terms and conditions are met.
The foregoing description of the Amendment does not purport to be complete and is qualified in
its entirety by reference to the Amendment, which is attached hereto as Exhibit 10.1.
U.K. Credit Facility
In connection with the Schuh acquisition (described in Item 2.02 below), Schuh entered into an
amended and restated Senior Term Facilities Agreement and Working Capital Facility Letter
(collectively, the UK Credit Facility) which provides for terms loans of up to £29.5 million (a
£15.5 million A term loan and £14.0 million B term loan) and a working capital facility of £5.0
million. The A term loan bears interest at LIBOR plus 2.50% per annum. The B term loan bears
interest at LIBOR plus 3.75% per annum. The working capital facility bears interest at the Base
Rate (as defined) plus 2.25% per annum.
The UK Credit Facility contains certain covenants at the Schuh level including a minimum
interest coverage covenant initially set at 4.25x and increasing to 4.50x in January 2012 and
thereafter, a maximum leverage covenant initially set at 2.75x declining over time at various rates
to 2.25x beginning in July 2012 and a minimum cash flow coverage of 1.10x.
The UK Credit Facility is secured by a pledge of all the assets of Schuh (defined below) and
its subsidiaries.
The foregoing description of the UK Credit Facility does not purport to be complete and is
qualified in its entirety by reference to the UK Credit Facility which is attached as Exhibit
10.2.
ITEM 2.02. COMPLETION OF ACQUISITION OR DISPOSITIONS OF ASSETS.
On June 23, 2011, the Company, through its newly-formed, wholly-owned subsidiary Genesco (UK)
Limited (Genesco UK), consummated the acquisition of all the outstanding shares of Schuh Group
Limited (Schuh), a specialty retailer of casual and athletic footwear in accordance with the
terms of a Sale and Purchase Agreement dated as of June 23, 2011 (the Agreement) among Genesco,
Genesco UK, Schuh and certain individuals listed on Schedule 1 thereof.
Pursuant to the terms and conditions of the Agreement, the Company acquired Schuh for £100.0
million, subject to closing adjustments, less £29.5 million of debt assumed and the amount of the
retention note and escrow described below. In addition, the Company agreed to pay deferred
purchase price of £25 million pursuant to a seller note, of which £15 million is payable on the
third anniversary of the closing and £10 million is payable on the fourth anniversary of the
closing subject to the payees not having terminated their employment with Schuh under specified
circumstances. The Company has also issued a £5 million retention note to the selling shareholders
which may be used to satisfy indemnification obligations owing to the Company. The balance of the
retention note which has not been used to satisfy indemnification obligations will be paid to the
selling shareholders on June 23, 2013. An additional £1 million is being held in escrow to satisfy
any final working capital adjustment. The Company has also agreed to implement a management bonus
plan for certain members of Schuh management which will pay up to £25 million in cash bonuses in
2015 if Schuh has achieved specified performance targets. The selling shareholders will also be
entitled to receive the amount of tax benefits potentially available to Schuh in connection with
the transaction, if and when such benefits are actually received.
The Company funded the acquisition and associated expenses with borrowings under the Credit
Facility and from cash on hand.
The foregoing description does not purport to be complete and is qualified in its entirety by
reference to the Agreement and Loan Note Instrument which are attached hereto as Exhibit
2.1 and Exhibit 2.2.
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ITEM 2.03. |
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CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION
UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT. |
The information under Item 1.01 above is incorporated by reference hereunder.
ITEM 7.01 REGULATION FD DISCLOSURE.
A copy of the Companys press release, dated June 23, 2011, announcing the consummation of the
Schuh acquisition is furnished with this Current Report as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) and (b) Financial Statements of Businesses Acquired and Pro Forma Financial Information.
The Company has not included financial statements of the acquired business for the periods
specified in Rule 3-05(b) of Regulation S-X or the pro forma financial information required
pursuant to Article 11 of Regulation S-X. All such financial statements and pro forma financial
information will be filed by the Company in an amendment to this Current Report on Form 8-K as
promptly as practicable but in any event within 71 calendar days after the date that this Current
Report on Form 8-K must have been filed.
(d) Exhibits
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Exhibit Number |
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Description |
2.1
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Sale and Purchase Agreement, dated as of June 23, 2011, by and
among Genesco Inc., Schuh Group Limited, Genesco (UK) Limited and the persons
listed on Schedule 1 thereto. (Pursuant to Item 601(b)(2) of Regulation S-K, the
schedules and exhibits from this agreement are omitted, but will be provided
supplementally to the Commission upon request.) |
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2.2
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£25 million Loan Note Instrument of Genesco (UK) Limited dated
June 23, 2011. |
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10.1
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First Amendment to Second Amended and Restated Credit
Agreement, dated June 23, 2011, by and among Genesco Inc., |
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Exhibit Number |
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Description |
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certain subsidiaries of Genesco Inc. party thereto, as Other
Domestic Borrowers and GCO Canada Inc., the lenders party
thereto and Bank of America, N.A., as Administrative Agent and
Collateral Agent. |
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10.2
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Amendment and Restatement Agreement including Amended and
Restated Senior Term Facilities Agreement dated June 23, 2011, among Schuh Group
Limited and Lloyds TSB Bank PLC. |
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99.1
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Press Release dated June 23, 2011. |
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.
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GENESCO INC.
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Date: June 28, 2011 |
By: |
/s/ Roger G. Sisson
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Name: |
Roger G. Sisson |
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Title: |
Senior Vice President, Secretary
and
General Counsel |
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EXHIBIT INDEX
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Exhibit Number |
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Description |
2.1
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Sale and Purchase Agreement, dated as of June 23, 2011, by and
among Genesco Inc., Schuh Group Limited, Genesco (UK) Limited and the persons
listed on Schedule 1 thereto. (Pursuant to Item 601(b)(2) of Regulation S-K, the
schedules and exhibits from this agreement are omitted, but will be provided
supplementally to the Commission upon request.) |
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2.2
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£25 million Loan Note Instrument of Genesco (UK) Limited dated
June 23, 2011. |
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10.1
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First Amendment to Second Amended and Restated Credit Agreement,
dated June 23, 2011, by and among Genesco Inc., certain subsidiaries of Genesco
Inc. party thereto, as Other Domestic Borrowers and GCO Canada Inc., the lenders
party thereto and Bank of America, N.A., as Administrative Agent and Collateral
Agent. |
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10.2
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Amendment and Restatement Agreement including Amended and
Restated Senior Term Facilities Agreement dated June 23, 2011, among Schuh Group
Limited and Lloyds TSB Bank PLC. |
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99.1
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Press Release dated June 23, 2011. |