| Item 1.01 |
Entry into a Material Definitive Agreement |
On November 4, 2025 (the “Closing Date”), CSW Industrials Holdings, LLC, a Delaware limited liability company (the “Borrower”), a wholly owned subsidiary of CSW Industrials, Inc., a Delaware corporation (the “Company”), certain other subsidiaries of the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (the “Agent”), entered into a Fourth Amended and Restated Credit Agreement (the “Fourth Credit Agreement”), which amends, restates, supersedes and replaces in its entirety that certain Third Amended and Restated Credit Agreement, dated as of May 2, 2025, to which the Borrower, the Company, the subsidiary guarantors, the Agent and the applicable lenders were party.
The Fourth Credit Agreement, among other things, provides for: (i) the continuation of the existing revolving credit facility in the aggregate principal committed amount of up to $700.0 million (the “RCF”); (ii) the extension of the maturity date of the RCF until five years after the Closing Date; and (iii) the establishment of a new senior secured term loan “A” credit facility (the “TLA”) in an aggregate principal amount of up to $600.0 million, available in a single drawing on the Closing Date, and with a maturity date of five years after the Closing Date.
The proceeds of: (i) the RCF will be used to finance a portion of the Purchase Price of the Transaction (each as defined below) and, thereafter, may be used from time to time for working capital and other general corporate purposes (including the financing of future acquisitions permitted under the Fourth Credit Agreement); and (ii) the TLA will be used to finance a portion of the Purchase Price of the Transaction (including payment of related fees, premiums, expenses and other transaction costs) and for general corporate purposes.
Borrowings under each of the RCF and the TLA bear interest, at the Borrower’s option, at a benchmark rate plus an applicable margin, or at a base rate plus an applicable margin. The initial applicable margins for borrowings under the RCF and the TLA are 1.75% per annum for benchmark rate (including term SOFR) loans, and 0.75% per annum for base rate loans, and after the delivery of financial statements for the first full fiscal quarter following the Closing Date, the applicable margins will be determined pursuant to a leverage-based pricing grid set forth in the Fourth Credit Agreement. Unused RCF commitments are subject to a customary commitment fee, initially 0.25% per annum, and then after the delivery of financial statements for the first full fiscal quarter following the Closing Date, based on the same pricing grid. The Borrower also pays customary letter of credit, agency and other administrative fees.
The TLA amortizes in equal quarterly installments of 1.25% of the initial aggregate principal amount of the TLA, with the total outstanding balance due in full on maturity.
The Borrower’s obligations under the Fourth Credit Agreement are guaranteed by the Company and certain of its domestic subsidiaries (collectively, the “Guarantors”) pursuant to an existing guarantee and collateral agreement. The obligations of the Borrower and the Guarantors are secured by a security interest in substantially all of the assets of the Borrower and the Guarantors, in each case, subject to permitted liens and other customary exceptions and limitations.
The Fourth Credit Agreement contains customary affirmative and negative covenants, including, among other things, covenants that restrict or limit the ability of the Borrower and the Guarantors to incur indebtedness, grant liens, make investments, consummate mergers and asset sales, prepay junior indebtedness and make restricted payments, in each case, subject to certain negotiated exceptions, baskets and thresholds. The Fourth Credit Agreement also includes customary events of default, including non-payment of principal, interest or other amounts due thereunder, breaches of covenants, inaccuracy of representations and warranties, cross-defaults to certain other material indebtedness, bankruptcy and insolvency events, the entry of material judgments, changes of control, certain ERISA events and the invalidity of material guarantees or security interests. The Fourth Credit Agreement also includes the following financial covenants: (i) a maximum consolidated net leverage ratio of 3.50 to 1.00 (which may increase to 4.00 to 1.00 for a period of six consecutive fiscal quarters following certain qualifying acquisitions); and (ii) a minimum consolidated interest coverage ratio of 3.00 to 1.00, each tested as of the last day of each fiscal quarter.
