Business

Mauser Packaging Solutions Unveils Strategic Debt Restructuring Plan with Exchange Offer Launch

Exchange Offer Commencement

OAK BROOK, Ill., April 1, 2024 – Mauser Packaging Solutions Holding Company ("Mauser"), a global leader in rigid packaging solutions, has announced the initiation of an offer to exchange any and all $2.75 billion of its outstanding 7.875% Senior First Lien Notes due in 2026 ("Old Notes") for newly issued 7.875% Senior First Lien Notes expiring in 2027 ("New Notes"). This offer has been described in a Confidential Offering Memorandum dated April 1, 2024, and is subjected to the terms and conditions within ("Exchange Offer").

A summary of the principal economic terms of this Exchange Offer has been skillfully delineated in the table below.

Principal Exchange Terms

Eligible holders that tender their Old Notes prior to 5:00 p.m., New York City time, on April 12, 2024, at the Early Tender Time, will be privileged to receive $1,000 in principal amount of New Notes for every $1,000 of Old Notes. This amount is inclusive of an early tender premium amounting to $50 in principal of New Notes ("Early Tender Premium"). Post the Early Tender Time, but before the Exchange Offer's expiration, holders will receive $950 in New Notes principal per $1,000 of Old Notes.

The New Notes will be homologous to the Old Notes in terms of provisions, covenants, and collaterals, with two primary differentiations: the New Notes maturity is set for April 15, 2027, and they will be redeemable at a predetermined price beginning February 15, 2025, along with adjustments to the optional redemption features.

As senior obligations of Mauser, the New Notes will rank equally alongside all of Mauser's existing and future senior-debt instruments, including secured lending facilities and any Old Notes not tendered post-Exchange Offer completion. They will be prioritized by Mauser's fixed asset collateral and, secondarily, by certain asset-backed loan priority collateral.

Numerous eligible holders of the Old Notes, in conjunction with their respective associated funds, who command approximately 65% of the outstanding Old Notes in principal, have pledged to tender their notes under the Exchange Offer via executed support agreements or otherwise expressed intentions.

The execution of this Exchange Offer is bound by the successful tender of at least 80% of the aggregate principal amount of the outstanding Old Notes before the Expiration Time, as outlined in the April 1, 2024 Confidential Offering Memorandum.

Eligible holders consenting to the exchange will also receive accrued but unpaid interest in cash on their exchanged Old Notes up until the corresponding settlement date. Prompt settlements are anticipated post-the Early Tender Time for notes properly tendered and not withdrawn prior to said time and post-expiration for those exchanged afterwards. New Notes interest will accrue from the initial settlement date, resulting in cash payments for any exchanged Old Notes' accrued interest being diminished by New Notes' pre-issuance interest.

Opting to satisfy or waive certain conditions stated in the Offering Memorandum could conclude the Exchange Offer.

Deadline and Conditions for Exchange Offer

The Exchange Offer will cease at 5:00 p.m., New York City time, on April 29, 2024, unless extended or advanced termination occurs. Withdrawal of tendered Old Notes is tenable prior to 5:00 p.m., New York City time, on April 12, 2024, thereafter rendered ineligible for retraction.

Concurrent with the Exchange Offer, Mauser aims to modify its 2023 term loan facility. This entails repricing and extending its maturity to April 15, 2027 ("Amendment"). The finalization of the Amendment is contingent upon typical transactional prerequisites.

Additionally, Mauser intends to accrue added first lien debt totaling $100 million ("New Debt"). The New Debt will hold equivalent parity with Mauser's current first lien debt, including the New Notes and the revised 2023 term loan facility, and will proportionately share the collateral seize.

The conclusion of the New Debt transaction is also hinged upon the fulfillment of standard conditions relevant to transactions of this kind.

Preliminary Financial Results Disclosed

In line with the Exchange Offer launch, Mauser Packaging Solutions Intermediate Company, Inc. ("MPS Intermediate"), Mauser's direct parent, disclosed its initial financial outcomes for the quarter ending March 31, 2024. Preliminary evaluations predict volumes up by 0.5% to 1.0% from the first quarter of 2023 after adjustments for shipping day variance, net sales ranging between $1.07 billion and $1.11 billion, and an Adjusted EBITDA of $178 million to $188 million.

The projection indicates a net sales reduction of about $33 million, equating to a 3% drop from the corresponding quarter in the preceding year. Nonetheless, the Adjusted EBITDA estimates a significant rise of approximately $15 million or a 9% increment from the same financial quarter of the previous year.

Contributing to the sales downturn are mainly lower raw material transit costs, while the surge in Adjusted EBITDA roots from efficient margin improvement strategies surpassing the strike of lowered price net of reductions in raw material expenses.

The preliminary figures for the quarter have yet to confront the complete financial review and closing procedures of the quarter's end adjustments. These may instigate changes to the present estimations, possibly harboring a discrepancy between anticipated and factual figures.

Exchange Offer Documentation and Eligibility

Documentation pertaining to the Exchange Offer is accessible exclusively to eligible holders passing an eligibility form to verify their status as either "qualified institutional buyers" under Rule 144A of the Securities Act of 1933, or non-"U.S. persons" under Rule 902 of the same Act. For document access or eligibility inquiries, interested parties should visit www.dfking.com/mauser or reach out via email to D. F. King & Co., Inc., the information agent for the Exchange Offer, at [email protected], or by dialing (800) 290-6427 (U.S. Toll-free) or (212) 269-5550 (Collect).

New Notes shall not be recorded under the Securities Act nor any correspondent securities legislation. Unless registered, New Notes cannot be offered, pledged, or exchanged within the United States or to U.S. persons, barring an exemption from such registration directives.

Cautionary Forward-Looking Statements

This press release may include forward-looking statements beyond historical facts, such as Mauser's aims to consummate the Exchange Offer or the New Debt transaction or enter into the Amendment. These forward-looking statements are inherently subject to risks, uncertainties, and assumptions and are not guarantees of future performance.

Circumstantial factors detailed in the Confidential Offering Memorandum tied to the Exchange Offer could materially affect these projections. Such statements are contingent upon market conditions and a myriad of potential risks that could lead to substantive divergences from the expected outcomes.

Non-GAAP Financial Measures

MPS Intermediate's presentation includes non-GAAP financial measures like Adjusted EBITDA, alongside GAAP measures. Adjusted EBITDA represents adjusted earnings before interests, taxes, depreciation, and amortization, which should not stand alone as performance indicators given the exclusion of vital operational costs.

While other companies might present similar measures, their definitions may differ from MPS Intermediate's; hence, direct comparability may not be feasible. MPS Intermediate emphasizes that its Adjusted EBITDA projections are subject to change and cannot be precisely reconciled with the most parallel GAAP measure due to indeterminate significant exclusive items.

About Mauser Packaging Solutions

As a worldwide supplier, Mauser operates over 20 manufacturing locations, supporting industry-leading clients on a global scale.

For further information: Contact: Jennifer Hiser Phone: (630) 203-4088

SOURCE Mauser Packaging Solutions