Actuant completes tender offer for 13% notes

New York, Aug. 11 - Actuant Corp. (B2/B+) said it completed its tender offer for its 13% senior subordinated notes due 2009 and the related solicitation of noteholder consents to proposed indenture changes, which expired as scheduled at 5 p.m. ET on Aug. 10, without further extension.

As of that deadline, the company had received valid tenders and consents from holders of $27.974 million principal amount of notes, or about 95.7% of the outstanding principal amount, all of which were accepted for payment. That was down slightly from the 96% reported on Aug. 4, when the offer had last been extended.

Actuant and the indenture trustee have executed and delivered a supplemental indenture incorporating the desired indenture amendments, including revisions announced on Aug. 4.

As previously announced, Actuant, a Milwaukee-based diversified manufacturer of highly engineered position and motion control systems and branded tools, said on July 1 that it had begun a tender offer for the remaining $29.236 million principal amount of the 13% notes (from the $200 million originally sold in July 2000 by its Actuant Finance Corp. subsidiary, the bulk of which had previously been redeemed or repurchased). It was also seeking noteholder consents to proposed indenture changes.

The company set a consent deadline of 5 p.m. ET July 15 and initially said the offer would expire at 5 p.m. ET July 30 (the deadline was subsequently extended).

It said that total consideration it would pay for the notes would be determined using a formula based on a reference security - the 3 1/8% U.S. Treasury note due May 15, 2007 - and would include a consent payment of $30 per $1,000 principal amount payable to holders tendering their notes and delivering consents by the consent deadline.

Under the pricing formula, the consideration to be paid for the notes would be an amount equal to the present value on the price determination date - the 12th business day before the expiration date - of $1,021.70 per $1,000 principal amount (the redemption price of the notes on their first call date of May 1, 2007), discounted using a yield of 100 basis points over the yield on the reference security.

The company said tendered notes could not be withdrawn and consents could not be revoked after the consent deadline. Holders tendering their notes would be required to consent to the proposed amendments, which would eliminate substantially all of the restrictive covenants and eliminate or modify the related events of default.

Actuant said that the offer would be funded from borrowings under the company's $250 million credit agreement, and would be conditioned upon the receipt by the company of consents of holders representing a majority principal amount of the outstanding notes, among other factors.

On July 14, Actuant announced the pricing for the tender offer, with the company to pay $1,252.14 per $1,000 principal amount for notes tendered by the consent deadline and $30 less for notes tendered after that. It would also pay accrued interest up to but excluding the payment date.

On July 16, Actuant said it had received tenders of $27.974 million (95.7% of the principal amount) of its 13% notes by the previously announced consent deadline of 5 p.m. ET on July 15, which expired as scheduled without extension.

The company said the response met the required consent level needed to amend the notes' indenture.

It said that tendered notes could no longer be withdrawn.

On Aug. 4, Actuant said that in addition to the originally announced proposed indenture amendment, it had also amended the consent solicitation to eliminate three additional provisions set forth in the conditions to defeasance contained in Section 8.02 of the indenture governing the notes.

Goldman Sachs & Co. was the dealer manager and solicitation agent (call the Credit Liability Management Group at 800 828-3182 or collect at 212 357-5680). Morrow & Co. Inc. was the information agent (call 800 607-0088 or collect at 212 754-8000).

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