Carrier Global Reports Material Agreements, Acquisitions, Financial Obligations

TL;DR

**Carrier Global just dropped an 8-K detailing big deals, acquisitions, and new debt, signaling major strategic moves.**

AI Summary

Carrier Global Corporation filed an 8-K on January 2, 2024, indicating several significant corporate events, including entry into a material definitive agreement, completion of an acquisition or disposition of assets, and creation of a direct financial obligation. This filing also covers changes in compensatory arrangements for certain officers and Regulation FD disclosure. For investors, this matters because these actions can significantly impact Carrier's financial health, strategic direction, and future earnings potential, potentially affecting stock valuation.

Why It Matters

This filing signals major strategic and financial shifts for Carrier Global, which could influence its competitive position and profitability. Investors should monitor the details of these events as they unfold to assess potential impacts on the company's stock performance.

Risk Assessment

Risk Level: medium — The filing indicates multiple significant corporate actions (acquisitions, new debt, material agreements) which inherently carry execution risks and can impact financial stability.

Analyst Insight

A smart investor would closely monitor subsequent filings or press releases from Carrier Global for specific details on the material agreements, acquisitions/dispositions, and financial obligations mentioned. Understanding the terms and financial impact of these events is crucial for re-evaluating the company's valuation and future prospects.

Key Players & Entities

• CARRIER GLOBAL Corp (company) — the registrant filing the 8-K
• January 2, 2024 (date) — date of earliest event reported and filing date
• 001-39220 (other) — Commission File Number for Carrier Global
• 83-4051582 (other) — I.R.S. Employer Identification No. for Carrier Global
• 13995 Pasteur Boulevard Palm Beach Gardens, Florida 33418 (other) — business address of Carrier Global

Forward-Looking Statements

• Carrier Global's financial leverage will increase due to the 'Creation of a Direct Financial Obligation'. (CARRIER GLOBAL Corp) — high confidence, target: Q1 2024
• The 'Completion of Acquisition or Disposition of Assets' will lead to a restructuring of Carrier Global's business segments. (CARRIER GLOBAL Corp) — medium confidence, target: Mid-2024

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common Stock ($0.01 par value) CARR New York Stock Exch
• $0 — ii) 58,608,959 common shares, par value $0.01, of Carrier (" Carrier Common Stock
• $349 m — nated tranche in an aggregate amount of $349 million, the proceeds of which were used

Filing Documents

• ef20016935_8k.htm (8-K) — 54KB
• ef20016935_ex10-1.htm (EX-10.1) — 299KB
• ef20016935_ex10-2.htm (EX-10.2) — 297KB
• ef20016935_ex10-3.htm (EX-10.3) — 755KB
• ef20016935_ex23-1.htm (EX-23.1) — 4KB
• ex20016935_ex99-1.htm (EX-99.1) — 13KB
• ef20016935_ex99-4.htm (EX-99.4) — 1475KB
• image00001.jpg (GRAPHIC) — 5KB
• 0001140361-24-000034.txt ( ) — 3369KB
• carr-20240102.xsd (EX-101.SCH) — 4KB
• carr-20240102_lab.xml (EX-101.LAB) — 22KB
• carr-20240102_pre.xml (EX-101.PRE) — 16KB
• ef20016935_8k_htm.xml (XML) — 4KB

01

Item 1.01 Entry into a Material Definitive Agreement. Investor Rights Agreement In connection with the completion of the Acquisition, on January 2, 2024, Carrier and Seller entered into an Investor Rights Agreement (the " Investor Rights Agreement "), pursuant to which Seller has the right to nominate one member of the Carrier Board of Directors (the " Board ") for a period of ten years following the closing of the transactions contemplated by the Purchase Agreement (the " Closing "), provided that Seller, together with its permitted transferees, continues to hold at least 50% of the Share Consideration. Seller has designated Maximilian Viessmann as its initial designee to the Board. The Investor Rights Agreement further provides that, for the time periods specified therein, Seller and its affiliates are subject to customary standstill, lockup and transfer restrictions and agree to vote their shares of Carrier Common Stock in favor of director nominees and other customary matters as recommended by the Board. The Investor Rights Agreement also provides for customary resale, demand and piggyback registration rights. In addition, the Investor Rights Agreement provides for a waiver of the corporate opportunities doctrine in favor of Seller and its affiliates, which was approved by the Board. Bridge Credit Agreement In connection with the completion of the Acquisition, on January 2, 2024, Carrier entered into a 60-day term loan credit agreement (the " Bridge Credit Agreement ") with JPMorgan Chase Bank, N.A., as administrative agent, under which it incurred a 60-day senior unsecured bridge term loan consisting of a euro-denominated tranche in an aggregate amount of 113 million and a USD-denominated tranche in an aggregate amount of $349 million, the proceeds of which were used to fund a portion of the Cash Consideration (the " Bridge Loan "). The Bridge Loan bears interest at, in the case of borrowings denominated in USD, the Term SOFR Rate plus 0.10% and a rati

01

Item 2.01 Completion of Acquisition or Disposition of Assets. The information set forth in the section titled "Introductory Note" and in Item 1.01 of this Report is incorporated herein by reference. The descriptions of the effects of the Purchase Agreement and the transactions contemplated by the Purchase Agreement do not purport to be complete and are subject to, and qualified in their entirety by reference to, the full text of the Purchase Agreement, which was filed as Exhibit 2.1 to Carrier's Current Report on Form 8-K filed with the Securities and Exchange Commission (the " SEC ") on April 25, 2023 and which is incorporated herein by reference.

03

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information set forth under the section titled "Bridge Credit Agreement" in Item 1.01 of this Report is incorporated herein by reference.

02

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Effective as of the Closing, on January 2, 2024, Maximilian Viessmann was appointed as a member of the Board, with a term expiring at Carrier's 2024 annual meeting of shareowners. The Board also appointed Mr. Viessmann to the Board's Technology and Innovation Committee. Mr. Viessmann was appointed pursuant to the terms of the Investor Rights Agreement, as described in Item 1.01 of this Report. Mr. Viessmann has been the Co-Chief Executive Officer and a member of the board of directors of Seller since 2018. In connection with his service on the Board, Mr. Viessmann will receive the same compensation currently payable to Carrier's non-employee directors, including for service on committees and as committee chairpersons, as described in the definitive proxy statement filed with the SEC by Carrier on March 7, 2023 in connection with Carrier's 2023 annual meeting of shareowners. Mr. Viessmann, together with other members of the Viessmann family, owns a majority of the capital stock of Seller and accordingly, upon the completion of the Acquisition, Seller became a "related party" of Carrier. In connection with the Closing, Carrier and its affiliates entered into certain agreements with Seller, including the License Agreement and the Investor Rights Agreement, descriptions of which are included in Item 1.01 to this Report and are incorporated herein by reference. Additionally, in connection with the Closing, Carrier, Seller and Climate Solutions entered into a Transitional Services Agreement pursuant to which each of Carrier and Seller will provide to the other on an interim, transitional basis, various services, agreed-upon charges for which services are generally intended to allow the servicing party to charge a price comprised of costs and expenses, including reasonably allocable overhead expenses. Following t

01

Item 7.01 Regulation FD Disclosure. On January 2, 2024, Carrier issued a press release announcing the completion of the Acquisition and Mr. Viessmann's appointment to the Board. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein. The press release issued on January 2, 2024 is furnished herewith as Exhibit No. 99.1 to this Report, and 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 and shall not be deemed to be incorporated by reference into any filing by Carrier under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Financial Statements and Exhibits

Financial Statements and Exhibits. (a)

Financial Statements of Business Acquired

Financial Statements of Business Acquired The audited combined financial statements of the Business at and for the year ended December 31, 2022, the notes related thereto and the Report of Independent Auditors thereon, and the unaudited combined financial statements of the Business at and for the nine months ended September 30, 2023, and the notes related thereto, are filed as Exhibits 99.2 and 99.3, respectively, to this Report and incorporated by reference herein. (b) Pro Forma Financial Information The unaudited pro forma condensed combined financial information of Carrier and the Business at and for the nine months ended September 30, 2023 and for the year ended December 31, 2022, and the notes related thereto, is filed as Exhibit 99.4 to this Report and incorporated by reference herein. The pro forma financial information included as Exhibit 99.4 to this Report has been presented for informational purposes only, as required by Form 8-K, and does not purport to represent the actual results of operations that Carrier and the Business would have achieved had Carrier and the Business combined at and during the periods presented in the pro forma financial information, and is not intended to project the future results of operations that the combined company may achieve following the Acquisition. (d) Exhibits 2.1*+ Share Purchase Agreement dated as of April 25, 2023 (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed on April 26, 2023). 10.1*+ License Agreement dated as of January 2, 2024, by and among Viessmann Group GmbH & Co. KG, Viessmann Climate Solutions SE and Carrier Global Corporation. 10.2* Investor Rights Agreement dated as of January 2, 2024, by and between Carrier Global Corporation and Viessmann Group GmbH & Co. KG. 10.3* Bridge Loan Agreement dated as of January 2, 2024, by and among Carrier Global Corporation, JPMorgan Chase Bank, N.A., BofA Securities, Inc. and Bank of America, N.A . 23.1 Consen

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View this 8-K filing on SEC EDGAR