PITTSBURG, Kan., June 11, 2020 /PRNewswire/ — Watco Companies, L.L.C. and its wholly-owned subsidiary, Watco Finance Corp. (collectively, “Watco”) announced today that Watco has commenced a cash tender offer for any and all outstanding $400,000,000 aggregate principal amount of its 6.375% Senior Notes due 2023 (CUSIP Nos. 941130AA4 and U94127AA2) (the “Notes”) on the terms and subject to the conditions set forth in the Offer to Purchase, dated the date hereof (the “Offer to Purchase”), the related Letter of Transmittal (the “Letter of Transmittal”), and the related Notice of Guaranteed Delivery (the “Notice of Guaranteed Delivery”). The tender offer is referred to herein as the “Offer.” The Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery are referred to herein collectively as the “Offer Documents.”
The tender offer consideration for each $1,000 principal amount of the Notes purchased pursuant to the Offer will be $1,013.20 (the “Tender Offer Consideration”). Holders must validly tender (and not validly withdraw) or deliver a properly completed and duly executed Notice of Guaranteed Delivery for their Notes at or before the Expiration Time (as defined below) in order to be eligible to receive the Tender Offer Consideration. In addition, holders whose Notes are purchased in the Offer will receive accrued and unpaid interest from the most recent interest payment date to, but not including, the Payment Date (as defined in the Offer to Purchase) for the Notes. Watco expects the Payment Date to occur on June 18, 2020. Watco expects the payment for Notes delivered under the guaranteed delivery procedures to occur on June 22, 2020.
The Offer will expire at 5: 00 p.m., New York City time, on June 17, 2020 (such time and date, as it may be extended, the “Expiration Time”), unless extended or earlier terminated by Watco. The Notes tendered may be withdrawn at any time at or before the Expiration Time by following the procedures described in the Offer to Purchase.
Holders who validly tender their Notes pursuant to the guaranteed delivery procedures described in the Offer Documents must tender their Notes no later than 5: 00 p.m., on June 19, 2020, the second business day following the Expiration Time to receive the total consideration.
Watco’s obligation to accept for purchase and to pay for the Notes validly tendered and not validly withdrawn pursuant to the Offer is subject to the satisfaction or waiver, in Watco’s discretion, of certain conditions, which are more fully described in the Offer to Purchase, including, among others, Watco’s receipt of aggregate proceeds (before initial purchasers’ discounts and commissions and other offer expenses) of at least $500 million from an offering of new senior notes, on terms satisfactory to Watco (the “Debt Financing”). The complete terms and conditions of the Offer are set forth in the Offer Documents. Holders of the Notes are urged to read the Offer Documents carefully.
Watco has retained D.F. King & Co., Inc. as the tender agent and information agent for the Offer. Watco has retained J.P. Morgan Securities LLC as the sole dealer manager for the Offer.
Holders who would like additional copies of the Offer Documents may call or email the information agent, D.F. King & Co., Inc. at (212) 269-5550 (banks and brokers), (800) 283-3192 (all others), or [email protected]. Copies of the Offer to Purchase, Letter of Transmittal, and Notice of Guaranteed Delivery are also available at the following website: www.dfking.com/watco. Questions regarding the terms of the Offer should be directed to J.P. Morgan Securities LLC at (212) 834-2045 (collect) or (866) 834-4666 (toll-free).
This news release shall not constitute an offer to buy or a solicitation of an offer to sell the Notes or any other securities and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which, or to any person to whom, such an offer, solicitation or sale is unlawful. This news release does not constitute an offer to purchase the Notes or a notice of redemption thereof. Any such offer, solicitation, purchase or sale will be made only by means of the Offer Documents. Nothing contained herein shall constitute an offer of Watco’s new senior notes that are the subject of the Debt Financing.
About Watco Companies, L.L.C.
Headquartered in Pittsburg, Kansas, Watco Companies, L.L.C. is a leading integrated transportation services provider with a broad set of capabilities. Watco provides short line railroad transportation services, terminal and port, logistics, and mechanical solutions to over 4,100 customers across the U.S., Mexico, Canada and Australia. According to Watco’s estimates, Watco is the second largest short line railroad operator, one of the largest break bulk terminaling services providers, and one of the largest independent providers of railcar maintenance and repair services in North America.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of applicable law. Forward-looking statements may be identified by the use of words such as “forecast”, “estimate”, “project”, “intend”, “expect”, “should”, “believe” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include any statements regarding the tender offer for the Notes. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements, including, but not limited to, Watco’s ability to successfully consummate the tender offer or otherwise redeem or discharge all of the Notes; general and industry economic conditions; conditions in the capital and credit markets; Watco’s ability to successfully integrate acquisitions; Watco’s relationships with Class I railroads and other connecting carriers; risks related to the geographic markets in which Watco operates, including weather conditions; Watco’s compliance with governmental regulation and legislative and regulatory developments; Watco’s ability to obtain necessary permits and leases to operate its business; Watco’s exposure to credit risk of its customers and counterparties; competitive pressures within its industries; risks related to climate change, including market and regulatory responses to climate change and related litigation; Watco’s compliance with environmental laws and regulations; Watco’s transportation of hazardous materials by rail; rising fuel costs; Watco’s dependence on management and key personnel; availability of government funding; Watco’s labor relations and the availability of qualified personnel; Watco’s reliance on a limited number of suppliers and fluctuations in the supply of components it uses in its industries; risks related to operating in foreign countries; risks related to international trade policies; future acts of terrorism or war; Watco’s reliance on technology and technology improvements in its business; risks related to cyber attacks and system disruptions; conflicts of interests among its limited number of equityholders and investors in the Notes; risks related to its joint venture and other investments; and public health threats or outbreaks of communicable diseases (including COVID-19) and actions taken by governmental authorities and others in response thereto. Watco does not intend, and undertakes no duty, to update this information to reflect future events or circumstances, except as required by law.
Media Contact
Cori Kallenbach
Watco Companies
(913) 303-4514
[email protected]
SOURCE Watco Companies, L.L.C.
