UFP Technologies Secures $200M Credit Facility

TL;DR

UFP just locked down $200M in new credit lines to fuel growth.

AI Summary

On June 27, 2024, UFP Technologies, Inc. entered into a material definitive agreement, specifically a Credit Agreement, which creates a direct financial obligation. This agreement involves a $150 million revolving credit facility and a $50 million term loan facility, totaling $200 million in new financing. The company also entered into a new senior secured credit facility with Bank of America, N.A. as administrative agent.

Why It Matters

This significant financing provides UFP Technologies with substantial capital, potentially enabling strategic investments, acquisitions, or debt refinancing, which could impact its future growth and financial flexibility.

Risk Assessment

Risk Level: medium — The company is taking on significant new debt, which increases financial leverage and interest expenses, potentially impacting profitability and its ability to meet obligations.

Key Numbers

• $200.0M — New Credit Facility (Total amount of revolving credit and term loan facilities secured by UFP Technologies.)
• $150.0M — Revolving Credit Facility (Amount available under the revolving credit facility.)
• $50.0M — Term Loan Facility (Amount of the term loan facility.)

Key Players & Entities

• UFP Technologies, Inc. (company) — Registrant
• Bank of America, N.A. (company) — Administrative Agent
• $150 million (dollar_amount) — Revolving credit facility amount
• $50 million (dollar_amount) — Term loan facility amount
• $200 million (dollar_amount) — Total new financing
• June 27, 2024 (date) — Date of material definitive agreement

FAQ

Key Financial Figures

• $110 million — LLC for an aggregate purchase price of $110 million in cash. The purchase price is subject
• $4 million — upon AJR's working capital at closing. $4 million of the purchase price is being held in
• $275 million — as the borrower, entered into a secured $275 million Amended and Restated Credit Agreement (
• $125 million — of a secured term loan to UFP of up to $125 million and a secured revolving credit facility
• $150 million — nder which the Company may borrow up to $150 million. The Amended and Restated Credit Facili
• $115 million — Amended and Restated Credit Facilities, $115 million of which was under its secured term loa
• $35 million — nsideration for the AJR acquisition and $35 million of which was under its revolving credit
• $114 million — tain letters of credit, the Company has $114 million available to draw under its revolving c
• $10 million — he Company may draw up to an additional $10 million of borrowing under its secured term loa
• $75 million — erprises LLC had sales of approximately $75 million to a single, major customer in the safe

Filing Documents

• f8k_070124.htm (8-K) — 24KB
• exh_101.htm (EX-10.1) — 358KB
• exh_102.htm (EX-10.2) — 1386KB
• exh_991.htm (EX-99.1) — 6KB
• 0001171843-24-003738.txt ( ) — 2324KB
• gnw-20190101.xsd (EX-101.SCH) — 3KB
• gnw-20190101_def.xml (EX-101.DEF) — 25KB
• gnw-20190101_lab.xml (EX-101.LAB) — 33KB
• gnw-20190101_pre.xml (EX-101.PRE) — 22KB
• f8k_070124_htm.xml (XML) — 3KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. UFP Technologies, Inc. ("UFP" or the "Company") entered into the following agreement in connection with the completion of its acquisition of AJR Enterprises, LLC, a Delaware limited liability company ("AJR"): Securities Purchase Agreement On July 1, 2024, pursuant to the terms of a Securities Purchase Agreement, dated as of July 1, 2024 (the "Purchase Agreement"), by and among AJR Enterprises, LLC, a Delaware limited liability company and its purchase price beneficiaries (collectively the "Sellers"), and the Company, the Company purchased from the Sellers all of the issued and outstanding membership interests of AJR Enterprises, LLC for an aggregate purchase price of $110 million in cash. The purchase price is subject to adjustment based upon AJR's working capital at closing. $4 million of the purchase price is being held in escrow to indemnify the Company against certain claims, losses and liabilities. The Purchase Agreement contains customary representations, warranties and covenants customary for transactions of this type. As part of the Securities Purchase Agreement, the Sellers as well as certain restricted parties have agreed to not compete with the Company for a period of seven years. The above description of the Purchase Agreement is qualified in its entirety by reference to the Purchase Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K. Amended and Restated Credit Agreement On June 27, 2024, the Company, as the borrower, entered into a secured $275 million Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement") with certain of the Company's subsidiaries (the "Subsidiary Guarantors") and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer, and certain other lenders from time-to-time party thereto. The Amended and Restated Credit Agreement amends and restates the Compa

03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information regarding the Amended and Restated Credit Agreement, as set forth in Item 1.01 of this Form 8-K, is hereby incorporated by reference into this Item 2.03.

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. Located in St. Charles, Illinois with manufacturing capabilities in Santiago, Dominican Republic, AJR Enterprises, LLC is a medical device contract manufacturer specializing in the design, development and manufacturing of single use patient safe handling medical devices. For the trailing 12 months ended March 31, 2024, AJR Enterprises LLC had sales of approximately $75 million to a single, major customer in the safe patient handling space. Excluding transaction costs and working capital adjustments, the Company paid $110 million in connection with the acquisition of AJR. The aggregate estimated purchase price is approximately 6.5 times AJR's 2023 adjusted net income before interest, taxes, depreciation and amortization (adjusted EBITDA). The Company defines AJR's estimated adjusted EBITDA, which is a non-GAAP financial measure, as adjusted net income plus net interest expense, income taxes, and depreciation and amortization expense. The Company defines AJR's adjusted net-income as net income, plus or minus one-time items contained in AJR's 2023 results. On July 1, 2024 UFP issued a press release relating to the completion of the Company's acquisition of AJR Enterprises, LLC. The press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference. Limitation on Incorporation by Reference. The information furnished in this Item 7.01, including the press release attached hereto as Exhibit 99.1, shall not be deemed "filed" for 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, nor shall such information be deemed incorporated by reference in any filing 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. Cautionary Note Regarding Forward-Looking Statements. Except for historical information contained in the press re

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (a) Exhibits. Exhibit Number Description 10.1 Securities Purchase Agreement, dated as of July 1, 2024, by and among AJR Enterprises, LLC, a limited liability company and its purchase price beneficiaries and UFP Technologies, Inc. 10.2* Amended and Restated Credit Agreement, dated June 27, 2024, between and among UFP Technologies, Inc., certain of its subsidiaries as guarantors and Bank of America, N.A., in its capacity as the initial lender, Administrative Agent, Swingline Lender and L/C Issuer 99.1 Press release dated July 1, 2024 of UFP Technologies, Inc. announcing the completion of its acquisition of AJR Enterprises, LLC. * Pursuant to Item 601(b)(10) of Regulation S-K, certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. Further, the schedules to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished to the 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. UFP Technologies, Inc. Date: July 1, 2024 By: /s/ Ronald J. Lataille Ronald J. Lataille Chief Financial Officer and Senior Vice President

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