UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On February 28, 2021, PQ Group Holdings Inc. (the “Company”), entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Sparta Aggregator L.P., a partnership established by Koch Minerals & Trading, LLC and Cerberus Capital Management, L.P. (the “Purchaser”), pursuant to which the Company will divest its Performance Chemicals business to the Purchaser (the “Transaction”). The Company and the Purchaser will provide each other with certain transition services for a period of six months from the date of the closing of the transaction. The Transaction is expected to be completed in 2021.
Pursuant to the Purchase Agreement, the Purchaser will pay a purchase price of $1.1 billion in cash, subject to certain adjustments specified therein, including for indebtedness, cash, working capital and transaction expenses of the Performance Chemicals business at the closing of the Transaction.
The Purchase Agreement contains customary representations, warranties and covenants by each party that are subject, in some cases, to specified exceptions and qualifications contained in the Purchase Agreement.
Each party’s obligation to consummate the Transaction pursuant to the Purchase Agreement is subject to customary closing conditions as set out therein, including, among others, (i) subject to certain exceptions, the accuracy of the representations and warranties of the parties; (ii) performance in all material respects by each of the parties of its covenants and agreements; (iii) receipt of certain required regulatory clearances; and (iv) the absence of any law or order from any governmental entity prohibiting consummation of the Transaction.
The Purchase Agreement includes certain termination rights for each of the Company and the Purchaser. The Purchase Agreement further provides that, in connection with a termination by the Company under certain circumstances specified therein, including if the conditions to closing are satisfied and the Purchaser is required to close the Transaction but fails to do so, the Company will be entitled to receive a termination fee of $66 million from the Purchaser.
The foregoing description of the Purchase Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the full text of the Purchase Agreement, which is attached hereto as Exhibit 2.1 to this Current Report on Form 8-K, and is incorporated herein by reference. It is not intended to provide any other information about the Company, the Purchaser or their respective subsidiaries and affiliates. The Purchase Agreement contains representations and warranties that are the product of negotiations among the parties thereto and the parties made to, and solely for the benefit of, each other as of specified dates. The assertions embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties and are also qualified in important part by confidential disclosure schedules delivered by the respective parties to the Purchase Agreement. The representations and warranties may have been made for the purpose of allocating contractual risk between the parties to the agreements instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors.
| Item 7.01 | Regulation FD Disclosure. |
The pertinent facts associated with the Purchase Agreement are briefly described above and elsewhere herein. Among the events to occur at the closing date as set forth in the Purchase Agreement, the Transaction contemplates a PBGC-reportable change in controlled group with respect to the PQ Retirement Plan (Plan No. 002; Sponsor EIN: 23-0972750), the Eco Services Pension Equity Plan (Plan No. 010; Sponsor EIN: 23-0972750) and the Eco Services Hourly Pension Plan (Plan No. 015; Sponsor EIN 23-0972750), defined benefit pension plans covered by Title IV of ERISA. In conjunction with the Transaction, PQ Corporation will retain sponsorship of the PQ Retirement Plan, will cease being in the Company’s controlled group and will become part of Purchaser’s controlled group (which does not sponsor any other defined benefit pension plans).
In conjunction with the Transaction, the sponsorship of the Eco Services Pension Equity Plan and the Eco Services Hourly Pension Plan will be transferred from PQ Corporation to an affiliate of the Company and will remain in the Company’s controlled group following the closing of the Transaction.
The information in Item 7.01 to this Current Report on Form 8-K shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in Item 7.01 to this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.
| Item 8.01 | Other Events. |
On March 1, 2021, the Company issued a press release announcing the entry into the Purchase Agreement. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information in Item 8.01 to this Current Report on Form 8-K (including Exhibit 99.1 attached hereto) shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in Item 8.01 to this Current Report on Form 8-K (including Exhibit 99.1 attached hereto) shall not be deemed incorporated by reference into any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Description | |
| 2.1 | Stock Purchase Agreement, dated as of February 28, 2021, by and among PQ Group Holdings Inc. and Sparta Aggregator L.P.* | |
| 99.1 | Press release dated March 1, 2021 | |
| 104 | The cover page from this Current Report on Form 8-K of PQ Group Holdings Inc., formatted in Inline XBRL and included as Exhibit 101 | |
| * | Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the U.S. Securities and Exchange Commission upon request. |
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.
| Date: March 4, 2021 | PQ Group Holdings Inc. | |||||
| By: | /s/ Michael Crews | |||||
| Executive Vice President and Chief Financial Officer | ||||||