Mauser Announces Exchange Offer

OAK BROOK, Ill., April 1, 2024 /PRNewswire/ -- Mauser Packaging Solutions Holding Company ("Mauser") today announced that it has commenced an offer to certain eligible holders described below to exchange any and all $2,750 million of its outstanding principal amount of 7.875% Senior First Lien Notes due 2026 (the "Old Notes") for newly issued 7.875% Senior First Lien Notes due 2027 (the "New Notes"), upon the terms and conditions set forth in the Confidential Offering Memorandum dated April 1, 2024 (the "Exchange Offer").

The table below summarizes the principal economic terms of the Exchange Offer.

Eligible holders that validly tender and do not validly withdraw their Old Notes in the Exchange Offer prior to 5:00 p.m., New York City time, on April 12, 2024 (the "Early Tender Time") will receive $1,000 in principal amount of New Notes per $1,000 principal amount of Old Notes, which includes an early tender premium of $50 in principal amount of New Notes (the "Early Tender Premium"). For any Old Notes validly tendered and not validly withdrawn after the Early Tender Time, but before the expiration of the Exchange Offer, eligible holders will receive $950 in principal amount of New Notes per $1,000 principal amount of Old Notes.

The New Notes will have terms, covenants and collateral substantially identical to the Old Notes except that (i) the New Notes will mature April 15, 2027 and (ii) the New Notes will first be redeemable at a fixed price on February 15, 2025 with related adjustments to the optional redemption provisions.

The New Notes will be Mauser's senior obligations and will rank equally in right of payment with all of Mauser's existing and future senior obligations, including its secured lending facilities and any untendered Old Notes that remain outstanding after completion of the Exchange Offer. The New Notes will be secured on a first-priority basis by Mauser's fixed asset collateral and on a second-priority basis by certain asset-backed loan priority collateral. All untendered Old Notes that remain outstanding after completion of the Exchange Offer will rank pari passu to the New Notes as to such collateral.

Several eligible holders of Old Notes, which, together with certain of their respective affiliated funds, hold approximately 65% of the outstanding principal amount of the Old Notes, have executed support agreements to agree to or otherwise expressed their intention to tender all of their Old Notes in the Exchange Offer. The Exchange Offer is subject to the terms and conditions set forth in the Confidential Offering Memorandum dated April 1, 2024, including that Mauser receives valid tender by eligible holders representing at least 80% of the aggregate principal amount of the Old Notes outstanding at or prior to the Expiration Time (as defined below).

Eligible holders whose Old Notes are accepted for exchange will also receive accrued and unpaid interest in cash on the exchanged Old Notes to, but not including, the applicable settlement date. Settlements are expected to occur promptly after the Early Tender Time for Old Notes properly tendered and not withdrawn prior to the Early Tender Time and promptly after the expiration of the Exchange Offer for Old Notes properly tendered and not withdrawn after the Early Tender Time but before expiration. Interest on the New Notes will accrue from (and including) the initial settlement date. As a result, the cash payable for accrued interest on any Old Notes exchanged following the initial settlement date will be reduced by the amount of any pre-issuance interest on the New Notes exchanged therefor.

The Exchange Offer is subject to the satisfaction or waiver of certain conditions described in the Offering Memorandum.

The Exchange Offer will expire at 5:00 p.m., New York City time, on April 29, 2024 (unless extended or earlier terminated) (the "Expiration Time"). Tendered Old Notes may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on April 12, 2024, but not thereafter.

In connection with the Exchange Offer, Mauser announced that, concurrently with the Exchange Offer, Mauser intends to enter into an amendment (the "Amendment") to the credit agreement governing its 2023 term loan facility to reprice the 2023 term loan facility and extend its maturity to April 15, 2027. The closing of the Amendment is subject to conditions as are usual and customary for transactions of this type. In addition, Mauser intends to incur additional first lien debt in an aggregate principal amount of $100 million (the "New Debt"). The New Debt would rank pari passu with Mauser's current first lien debt, including the New Notes and the 2023 term loan facility, as amended by the Amendment, and would equally and ratably share in the collateral with Mauser's current first lien debt. The closing of the New Debt transaction will be subject to conditions as are usual and customary for transactions of this type.

Preliminary Financial Results for the Three Months Ended March 31, 2024

In connection with the launch of the Exchange Offer, Mauser Packaging Solutions Intermediate Company, Inc. ("MPS Intermediate"), the direct parent of Mauser, announced its preliminary results for the three months ended March 31, 2024. Based on preliminary information available as of the date hereof, MPS Intermediate expects its results from January 1, 2024 through March 31, 2024 to be within the following ranges:

• First quarter 2024 volumes up 0.5% to 1.0% as compared to first quarter 2023 volumes after adjusting for the difference in shipping days;
• First quarter 2024 net sales of $1,070 million to $1,110 million, with the midpoint of the range being approximately $33 million, or 3%, below first quarter 2023 net sales; and
• First quarter Adjusted EBITDA of $178 million to $188 million, with the midpoint of the range being approximately $15 million, or 9%, above first quarter 2023 Adjusted EBITDA.

The decrease in net sales is driven primarily by the pass-through of lower raw material costs. The increase in Adjusted EBITDA is driven primarily by margin improvement actions under MPS Intermediate's Earnings Improvement Plan, which more than offset the impact of lower price net of raw material cost decreases.

MPS Intermediate has not prepared full financial statements for the three months ended March 31, 2024 and therefore the information above has not been subject to its respective normal quarter-end closing and review procedures and adjustments. In the course of preparing and finalizing financial statements for the three months ended March 31, 2024, the preliminary estimates set forth above will be subject to change and MPS Intermediate may identify items that will require it to make adjustments to the preliminary estimates. For these or other reasons, the actual results for this period may differ materially from these preliminary estimates. There can be no assurance that the respective volumes, net sales and Adjusted EBITDA figures for the three months ended March 31, 2024 will fall within the ranges set forth above, and any variation between MPS Intermediate's actual results and the estimate set forth above may be material.

Available Documents and Other Details

Documents relating to the Exchange Offer will only be distributed to eligible holders who complete and return an eligibility form confirming that they are either a "qualified institutional buyer" under Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), or not a "U.S. person" under Rule 902 under the Securities Act. Holders of Old Notes who desire to complete an eligibility form should either visit the website www.dfking.com/mauser for this purpose or request instructions by sending an e-mail to [email protected] or calling D. F. King & Co., Inc., the information agent for the Exchange Offer, at (800) 290-6427 (U.S. Toll-free) or (212) 269-5550 (Collect).

The New Notes will not be registered under the Securities Act or any other applicable securities laws and, unless so registered, the New Notes may not be offered, sold, pledged or otherwise transferred within the United States or to or for the account of any U.S. person, except pursuant to an exemption from the registration requirements thereof. Accordingly, the New Notes are being offered and issued only to persons (i) reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) and (ii)  who are not "U.S. persons" (as defined in Rule 902 under the Securities Act). Non U.S.-persons may also be subject to additional eligibility criteria.

The complete terms and conditions of the Exchange Offer are set forth in the informational documents relating to the Exchange Offer. This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any securities. The Exchange Offer is only being made pursuant to the Confidential Offering Memorandum and the related letter of transmittal. The Exchange Offer is not being made to holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

Cautionary Note Regarding Forward-Looking Statements

This press release contains information that could constitute forward-looking statements. All statements other than statements of historical fact contained in this press release, including, but not limited to, statements regarding whether we will consummate the Exchange Offer or the New Debt transaction, or enter into the Amendment, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "will," "intend," "expect," "anticipate," "should," "could" and words or expressions of similar meaning. Such forward-looking information is based on certain current assumptions and analysis made by Mauser in light of its experience and perception of current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results, performance or achievements will conform to Mauser's expectations and predictions is subject to market conditions and a number of known and unknown risks and uncertainties which could cause actual results to differ materially from Mauser's expectations. Other factors which could materially affect such forward-looking information are described in the risk factors detailed in the Confidential Offering Memorandum related to the Exchange Offer. Forward-looking statements only speak as of the date hereof and Mauser assumes no obligation to update any written or oral forward-looking statement made by Mauser or on its behalf as a result of new information, future events or other factors, except as required by law.

Non-GAAP Financial Measures

This press release contains financial measures with respect to MPS Intermediate, which presentation is not in accordance with U.S. generally accepted accounting principles ("GAAP"), such as Adjusted EBITDA, which is not a measurement of financial performance under GAAP. Adjusted EBITDA is defined as adjusted earnings before interest, income taxes, depreciation and amortization.

MPS Intermediate presents Adjusted EBITDA because it, along with MPS Intermediate's GAAP results, are measures management uses to assess financial performance. MPS Intermediate also believes that such measures provide investors with alternative methods for assessing its operating results in a manner that enables them to more thoroughly evaluate MPS Intermediate's performance. While providing useful information, Adjusted EBITDA should not be considered in isolation or as substitutes for consolidated statements of operations or cash flows prepared in accordance with GAAP and should not be construed as an indication of MPS Intermediate's operating performance. Adjusted EBITDA may have material limitations as performance measures because it excludes items that are necessary elements of MPS Intermediate's costs and operations. In addition, similar measures presented by other companies may not be comparable to MPS Intermediate's presentation, since each company may define these terms differently.  MPS Intermediate cannot reconcile its projection of Adjusted EBITDA to the most directly comparable GAAP measure because of the unpredictable or unknown nature of certain significant items excluded from Adjusted EBITDA and the resulting difficulty in quantifying the amounts thereof.

About Mauser

Mauser is a global supplier of rigid packaging products and services. Mauser currently operates manufacturing locations in over 20 countries serving industry-leading customers on an international basis.

Contact:  Jennifer Hiser
Phone:     (630) 203-4088

SOURCE Mauser Packaging Solutions

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