Item 2.01. Completion of Acquisition or Disposition of Assets.
On July 29, 2014, Florida Pneumatic Manufacturing Corporation, a Florida
corporation ("Purchaser") that is an indirect wholly owned subsidiary of P&F
Industries, Inc. (the "Company"), Christian Moppett, Benjamin Moppett, Simon
Moppett and Rosmarie Moppett as trustees of the Moppett Family Settlement
(Douglas Herbert Moppett) 2009 (the "Trustees"), Rosmarie Moppett, individually
(together with the Trustees, the "Shareholders"), and the Company entered into a
Sale and Purchase Agreement (the "Purchase Agreement"), pursuant to which, among
other things, Purchaser acquired (the "Acquisition") all of the outstanding
equity interests of Universal Air Tool Company Limited, a company incorporated
in England and Wales ("UAT"), as more particularly described below and in the
Purchase Agreement. A copy of the Purchase Agreement is filed as Exhibit 2.1
hereto and incorporated herein by reference. Contemporaneously, the parties both
executed the Purchase Agreement and consummated the transactions contemplated by
the Purchase Agreement.
The Consideration. Pursuant to the Purchase Agreement, the effective purchase
price for the shares acquired in the Acquisition was approximately $1,950,000
(the "Consideration"). The Consideration was based on the cash purchase price of
£1,145,000 (Pounds Sterling). This amount is subject to a post-closing working
capital adjustment and an earn-out based on the growth in the profitability of
the UAT business within the one-year period following the closing of the
Acquisition, which could result in an additional payment to the Shareholders of
up to approximately $425,000 (£250,000 (Pounds Sterling)). The Consideration was
paid to UAT by Purchaser from availability under revolver loans pursuant to the
Loan Agreement (defined below) to the Shareholders, less certain amounts
escrowed pursuant to, among others, the terms of the Purchase Agreement.
The Indemnities, Warranties and Covenants. The Purchase Agreement contains
indemnitites, warranties and covenants made by the Shareholders to Purchaser, on
the one hand, and by Purchaser and the Company to the Shareholders, on the other
hand which are customary for a transaction of this nature.
The foregoing descriptions of the Acquisition and the Purchase Agreement do not
purport to be complete, and are qualified in their entirety by reference to the
full text of the Purchase Agreement attached as an Exhibit hereto.
ThePurchase Agreement and the above description of such agreement, have been
included to provide investors and security holders with information regarding
the terms of the Purchase Agreement, and are not intended to provide any other
factual information about UAT, the Company, any respective subsidiaries or
affiliates, the Shareholders or their respective affiliates. The representations
and other statements contained in the Purchase Agreement were made only for
purposes of such agreement, and as of specific dates, were solely for the
benefit of the parties to such agreement, may be subject to a contractual
standard of materiality different from what might be viewed as material to
shareholders, and may be subject to limitations agreed upon by the parties,
including being qualified by confidential disclosures made by the parties to
each other. Investors should not rely on the warranties and other statements
contained in the Acquisition Agreement as characterizations of the actual state
of facts or condition of UAT, the Purchaser, the Company or any of their
respective subsidiaries, affiliates or businesses.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
Contemporaneously with the Acquisition referred to and described in Item 2.01,
above, the Company, its subsidiaries Florida Pneumatic Manufacturing Corporation
(defined above as "Purchaser"), Hy-Tech Machine, Inc. ("Hy-Tech") and Nationwide
Industries, Inc. ("Nationwide", and together with the Company, Purchaser and
Hy-Tech, collectively, "Borrowers") and the Company's subsidiaries Continental
Tool Group, Inc. ("Continental Tool"), Countrywide Hardware, Inc.
("Countrywide"), Embassy Industries, Inc. ("Embassy"), Green Manufacturing, Inc.
("Green"), Pacific Stair Products, Inc. ("Pacific Stair"), WILP Holdings, Inc.
("WILP") and Woodmark International, L.P. ("Woodmark", and together with
Continental Tool, Countrywide, Embassy, Green, Pacific Stair and WILP,
collectively, "Guarantors") entered into the Sixth Amendment to Loan and
Security Agreement, effective as of July 29, 2014 (the "Amendment"), with
Capital One Business Credit Corp. (f/k/a Capital One Leverage Finance
Corporation) (the "Agent"), as agent for Lenders (the "Lenders") from time to
time party to the Loan Agreement (as defined below). The Amendment amended the
Loan and Security Agreement, dated as of October 25, 2010, as previously amended
(the "Loan Agreement"), among the Borrowers, the Guarantors, the Agent and the
Lenders. A copy of the Amendment is attached as Exhibit 10.2 hereto and
incorporated herein by reference.
The Amendment, among other things, amended the Loan Agreement by providing the
Lender's consent to, among other things, the Acquisition, and adding and
modifying certain definitions in connection with the Acquisition and the
transactions contemplated thereby.
The foregoing description of the Amendment is qualified in its entirety by
reference to the full text of the Amendment attached as an Exhibit 10.1 hereto.
Item 8.01. Other Items
On July 29, 2014
, the Company issued a press release (the "Press Release")
announcing the entering into of the Purchase Agreement described herein. A copy
of the Press Release is furnished as Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
2.1 Sale and Purchase Agreement, dated as of July 29, 2014, by and among
Purchaser, the Shareholders, and the Company.
10.1 Sixth Amendment to the Loan Agreement, dated as of July 29, 2014, by and
among the Borrowers, Guarantors, the Agent and Lenders.
99.1 Press Release, dated July 29, 2014, issued by the Company.