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PSIX > SEC Filings for PSIX > Form 8-K on 2-Apr-2014All Recent SEC Filings

Show all filings for POWER SOLUTIONS INTERNATIONAL, INC.

Form 8-K for POWER SOLUTIONS INTERNATIONAL, INC.


2-Apr-2014

Entry into a Material Definitive Agreement, Completion of Acq


Item 1.01. Entry into a Material Definitive Agreement.

Stock Purchase Agreement

On April 1, 2014 (the "Closing Date"), Power Solutions International, Inc. a Delaware corporation (the "Company"), entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") by and among the Company, Carl L. Trent, Kenneth C. Trent and CKT Holdings Inc., a Wisconsin corporation (the "Seller") owned by Carl L. Trent and Kenneth C. Trent, pursuant to which, on the Closing Date, the Company purchased from the Seller all of the issued and outstanding stock of Professional Power Products, Inc., an Illinois corporation ("PPPI") and wholly-owned subsidiary of the Seller. PPPI is a leading designer and manufacturer of large, custom engineered integrated electrical power generation systems serving the global diesel and natural gas power generation market.

Pursuant to the terms and conditions of the Stock Purchase Agreement, the Company paid approximately $46,000,000 in cash at closing, and will issue to the Seller (or its designees) between $5,000,000 and $15,000,000 in shares of the Company's common stock, valued at $76.02 per share (i.e., between 65,772 and 197,316 shares), based upon, and following the final determination in accordance with the Stock Purchase Agreement of, the PPPI EBITDA (as defined in the Stock Purchase Agreement). Pursuant to the terms and conditions of the Stock Purchase Agreement, the Company will deliver to the Seller an initial calculation of the number of shares of the Company's common stock to be issued to the Seller (or its designees) no later than the earlier of March 31, 2015 and 30 days following the Company's filing of its Form 10-K for the year ending December 31, 2014. Following the final determination of the number of shares of the Company's common stock to be issued to the Seller (or its designees) in accordance with the Stock Purchase Agreement, the Company will issue such number of shares of its common stock to the Seller (or its designees).

Under the terms of the Stock Purchase Agreement, the cash portion of the purchase price will be increased or decreased after the closing to the extent that the actual closing net working capital of PPPI varies from the estimate on the Closing Date. Additionally, the Stock Purchase Agreement includes customary representations, warranties and covenants, including customary indemnification obligations.

The issuance of the shares of the Company's common stock to the Seller (or its designees) as described above is being made without registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on the exemption provided by Section 4(a)(2) of the Act. Each of the Seller, Carl L. Trent and Kenneth C. Trent has represented to the Company that it or he (i) is an accredited investor as defined in Rule 501(a) of Regulation D under the Securities Act, (ii) has such knowledge, sophistication and experience in business and financial matters as to be capable of evaluating the merits, risks and other considerations relating to the acquisition and ownership of the shares of the Company's common stock being issued pursuant to the Stock Purchase Agreement and (iii) is acquiring such shares for its or his own account for investment purposes.

The foregoing summary description of the Stock Purchase Agreement does not purport to be complete and is subject to and qualified in its entirety by reference to the terms and conditions of the Stock Purchase Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Facility Lease

On the Closing Date and in connection with the Company's acquisition of PPPI, PPPI entered into an Amended and Restated Lease Agreement (the "Lease Agreement") with 448 W. Madison LLC, a Wisconsin limited liability company (the "Landlord") owned by Carl L. Trent, pursuant to which PPPI will lease from the Landlord approximately 11.55 acres of land, and the buildings and other structures located thereon, located at 448 W. Madison St. in Darien, Wisconsin (the "Leased Property"). PPPI uses the Leased Property as its primary manufacturing facility and corporate headquarters, and the Leased Property includes, among other things, approximately 133,891 square feet of industrial warehouse and office space (the "Building"), a 1.10 acre parking lot owned by the Landlord and located across the street from the Building and certain industrial equipment owned by the Landlord and used by PPPI in its manufacturing operations. The term of the Lease Agreement commences on the Closing Date and expires on March 31, 2021, and PPPI has the option to extend the lease term for . . .



Item 2.01. Completion of Acquisition or Disposition of Assets.

The information under the heading "Stock Purchase Agreement" provided in Item 1.01 of this Current Report is incorporated herein by reference.



Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 of this Current Report is incorporated herein by reference.



Item 3.02. Unregistered Sales of Equity Securities.

The information under the heading "Stock Purchase Agreement" provided in Item 1.01 of this Current Report is incorporated herein by reference.



Item 7.01. Regulation FD Disclosure.

On the Closing Date, the Company issued a press release relating to its acquisition of PPPI, which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information in this Item 7.01 of this Current Report (including Exhibit 99.1 hereto) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.




Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

All required financial statements with respect to PPPI will be filed by amendment to this Current Report within 71 days after the date that this report is required to be filed.

(b) Pro Forma Financial Information.

All required pro forma financial information with respect to the Company's acquisition of PPPI will be filed by amendment to this Current Report within 71 days after the date that this report is required to be filed.

(d) Exhibits.

Exhibit No.                                  Description

10.1              Stock Purchase Agreement, dated as of April 1, 2014, by and among
                  Power Solutions International, Inc., Carl L. Trent, Kenneth C.
                  Trent and CKT Holdings, Inc.*

10.2              Amended and Restated Lease Agreement, dated as of April 1, 2014,
                  by and between Professional Power Products, Inc. and 448 W.
                  Madison, LLC.

10.3              Amended and Restated Credit Agreement, dated as of April 1, 2014,
                  by and among Wells Fargo Bank, N.A. as agent for itself and other
                  lenders party thereto, each of the lenders party thereto, Power
                  Solutions International, Inc., The W Group, Inc., Power
                  Solutions, Inc., Power Great Lakes, Inc., Auto Manufacturing,
                  Inc., Torque Power Source Parts, Inc., Power Properties, L.L.C.,
                  Power Production, Inc., Power Global Solutions, Inc., PSI
                  International, LLC, XISync LLC and Professional Power Products,
                  Inc., and related documents.

10.4              Joinder to Guaranty and Security Agreement, dated as of April 1,
                  2014, by and among Wells Fargo Bank, N.A. as agent for itself and
                  the other lenders party thereto, Power Solutions International,
                  Inc., The W Group, Inc., Power Solutions, Inc., Power Great
                  Lakes, Inc., Auto Manufacturing, Inc., Torque Power Source Parts,
                  Inc., Power Properties, L.L.C., Power Production, Inc., Power
                  Global Solutions, Inc., PSI International, LLC, XISync LLC and
                  Professional Power Products, Inc., joining Professional Power
                  Products, Inc. as a party thereto.

99.1              Press release of Power Solutions International, Inc., dated April
                  1, 2014 (furnished herewith).

* Exhibits and schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of an omitted exhibit or schedule to the SEC upon request.


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