The Ardonagh Group Prices Notes Offering
26 June 2020
The Ardonagh Group Prices Notes Offering
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the notes, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Further to its 22 June 2020 announcement, The Ardonagh Group (“the Group”) announces that on 25 June 2020 it priced the offering of $500 million in aggregate principal amount of Ardonagh Midco 2 plc’s 11.50% / 12.75% senior PIK toggle notes due 2027 (the “Notes”). The Notes priced at an issue price of 99% and have a coupon of 11.50% for cash interest and 12.75% for interest paid in kind. The Notes are expected to be issued on 14 July 2020.
The proceeds of the Notes, together with drawings under a new senior secured term loan facility of £1,575 million (equivalent), will be used (i) to redeem the Group’s £553,300,000 8.375% senior secured notes due 2023, USD $520,000,000 8.625% senior secured notes due 2023 and USD $235,000,000 8.625% senior secured notes due 2023 (the “Existing Notes Redemption”); (ii) to repay drawn amounts under the existing revolving credit facility agreement; (iii) to fund the acquisitions of Nevada 4 Midco 1 Limited (holding company of Bravo Investments Holdings Limited) and Nevada 5 Topco Limited (holding company of Arachas Topco Limited) from funds managed by HPS Investment Partners (“HPS”), LLC and Madison Dearborn Partners (“MDP”), LLC, and to fund the acquisition of Bennetts Motorcycling Services Ltd; (iv) to pay the fees and expenses incurred in connection with the foregoing transactions, including fees and expenses incurred in connection with the Offering, repayment of existing debt of the targets, costs related to the acquisitions and redemption costs including accrued interest incurred in connection with the Existing Notes Redemption; and (v) for general corporate purposes.
The Group also announces today certain information provided in Appendix A hereto.
The Notes and the guarantees thereof will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction. Accordingly, the Notes will only be offered in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States in offshore transactions in reliance on Regulation S under the Securities Act. Unless so registered, the Notes may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.
The securities are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (the “EEA”) or the United Kingdom (the “UK”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”), (ii) a customer within the meaning of Directive 2016/97/EU (as amended or superseded, the “Insurance Distribution Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129 (as amended, the “Prospectus Regulation”). Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the securities or otherwise making them available to retail investors in the EEA or the UK has been prepared and therefore offering or selling the securities or otherwise making them available to any retail investor in the EEA or the UK may be unlawful under the PRIIPS Regulation.
In Member States of the EEA or the UK, this announcement and any offer of the securities referred to herein in any Member State of the EEA or the UK will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of the securities referred to herein. Accordingly, any person making or intending to make an offer in a Member State of Notes which are the subject of the offering contemplated may only do so in circumstances in which no obligation arises for the Group or any of the initial purchasers to publish a prospectus pursuant to Article 3 of the Prospectus Regulation, in each case, in relation to such offer. Neither the Group nor the initial purchasers have authorized, nor do they authorize, the making of any offer of Notes in circumstances in which an obligation arises for the Group or the initial purchasers to publish a prospectus for such offer.
This communication is being distributed only to, and is directed at persons who (i) have professional experience in matters relating to investments and who qualify as investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000, as amended (“FSMA”)) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”).
This announcement may include projections and other “forward-looking” statements within the meaning of applicable securities laws. Any such projections or statements reflect the current views of the Group about future events and financial performance. The use of any of the words “expect,” “anticipate,” “continue,” “will,” “project,” “should,” “believe,” “plans,” “intends” and similar expressions are intended to identify forward-looking information or statements. Although the Group believes that the expectations and assumptions on which such forward-looking statements and information are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Group can give no assurance that such statements and information will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties.
The forward-looking statements and information contained in this announcement are made as of the date hereof and the Group undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
David Ross, Chief Executive of Ardonagh, commented:
“The scale of this transaction and the blue-chip investors who have supported are a strong endorsement of everything the company has worked towards for the last three years. These international investors have backed our ambitions and are supporting our strategy after months of conversations spanning a period of unprecedented global volatility. We believe that this transaction gives us the right capital structure and additional financial firepower to take the company forward, never forgetting our independence and culture.”
John Tiner, Ardonagh Chairman, added:
“With this ground-breaking financing package enabling completion of the acquisition of Bravo and Arachas, Ardonagh has strengthened its position as the largest independent broking group in the UK. With the continued backing of our shareholders and the investors who have participated in the financing, this transaction paves the way for the Group to fulfil our future ambitions, continue to deliver results for our clients and create exciting opportunities for our people.”