Item 1.01 Entry into a Material Definitive Agreement
As previously disclosed, Concrete Partners, LLC (the “Borrower”), a subsidiary of Suncrete, Inc. (the “Company”), and the Company and certain of the Company’s wholly owned subsidiaries in their capacity as guarantors (collectively with the Borrower and the Company, the “Loan Parties”), are party to a credit agreement with Bank of America, N.A., as administrative agent, swingline lender and L/C issuer (the “Administrative Agent”), BofA Securities, Inc., as joint lead arranger and sole bookrunner, and the lenders party thereto (collectively, the “Lenders” and such agreement, as amended prior to the date of the Amendment (as defined below), the “Credit Agreement”), which previously provided for (i) a fully drawn senior secured first lien term loan in the aggregate principal amount of $205.0 million (the “Term Loan”) and (ii) a $25.0 million revolving credit facility (the “Revolving Credit Facility”).
On June 30, 2026 (the “Effective Date”), the Loan Parties entered into that certain Commitment Increase and Fifth Amendment to Credit Agreement (the “Amendment,” and the Credit Agreement, as amended by the Amendment, the “Amended Credit Agreement”) with the Lenders, pursuant to which the Credit Agreement was amended to, among other things, (i) increase the aggregate commitments under the Revolving Credit Facility from $25.0 million to $50.0 million and (ii) provide for a $175.0 million delayed draw term loan facility (the “Delayed Draw Term Loan Facility”), with the same maturity date as the other loans under the Amended Credit Agreement of July 29, 2029 (the “Maturity Date”).
Pursuant to the Amendment, the Delayed Draw Term Lenders (as defined in the Amendment) agreed to make loans to the Borrower from time to time, but limited to a maximum of 10 drawings by the Borrower, each in a minimum principal amount of $5.0 million, until the earlier of (i) December 31, 2027 and (ii) the date on which the aggregate amount of commitments under the Delayed Draw Term Loan Facility (the “Delayed Draw Term Commitments”) is reduced to zero pursuant to the terms of the Amended Credit Agreement (the “Delayed Draw Termination Date”). Any undrawn commitments under the Delayed Draw Term Loan Facility will be subject to a customary commitment fee.
Proceeds from the Delayed Draw Term Loan Facility are required to be used only to (i) retroactively refinance certain previously completed acquisitions and (ii) finance certain permitted acquisitions, including the payment of permitted earnouts and to pay transaction expenses incurred in connection therewith. Under the Amended Credit Agreement, borrowings under the Delayed Draw Term Loan Facility will amortize in quarterly installments, commencing with the fiscal quarter ending December 31, 2026 (each, a “Delayed Draw Term Loan Repayment Date”), in an amount, subject, in each case, to adjustments for prior mandatory and voluntary prepayments of principal, equal to the original aggregate principal amount of all funded loans under the Delayed Draw Term Loan Facility (the “Delayed Draw Term Loans”) as of the applicable Delayed Draw Term Loan Repayment Date multiplied by (i) 1.875% for each Delayed Draw Term Loan Repayment Date occurring from December 31, 2026 through and including September 30, 2027 and (ii) 2.5% for each Delayed Draw Term Loan Repayment Date occurring from December 31, 2027 through and including June 30, 2029, with the entire unpaid principal amount of the Delayed Draw Term Loans due on the Maturity Date. The Borrower has the same selection of interest rate options and interest periods for borrowings under the Delayed Draw Term Loan Facility as the Term Loan and the Revolving Credit Facility.
In addition, the Amendment (i) provides a carve-out from the mandatory prepayment requirements in the Amended Credit Agreement that permits the Loan Parties to receive up to $400.0 million in net cash proceeds from equity issuances made prior to the Delayed Draw Termination Date, so long as the net cash proceeds are intended to be used to consummate permitted acquisitions and pay the costs and expenses in connection therewith, (ii) (a) revises the joinder requirements and permitted acquisition baskets and (b) provides for certain permitted earnout payments and, in each case, to increase operational flexibility and to support the Company’s acquisition strategy, (iii) modifies the definition of “Consolidated EBITDA” used to calculate certain financial ratios, (iv) permits the Loan Parties to enter into a captive insurance program, subject to certain conditions and (v) increases the threshold of what constitutes a “Material Acquisition” from $25.0 million to $50.0 million.
The Amendment also modifies certain financial covenants, including (i) replacing the requirement to maintain a minimum consolidated senior leverage ratio with a requirement to maintain a minimum consolidated senior net leverage ratio as of the end of each fiscal quarter of (a) 4.00-to-1.00 for fiscal quarters ending between the Effective Date and June 30, 2027 and (b) 3.50-to-1.00 for fiscal quarters ending after September 30, 2027, subject to certain adjustments, including at the Borrower’s option following a Material Acquisition, subject to certain conditions, and
