United Site Services Announces New Money and Open Market Purchase Transaction

News provided by

Aug 22, 2024, 15:28 ET

WESTBOROUGH, Mass., Aug. 22, 2024 /PRNewswire/ -- United Site Services (the "Company"), the largest provider of portable sanitation services and complementary site solutions in the United States, announced today the closing of a series of financing transactions (the "Transactions"). The Transactions were supported by a vast majority of the capital structure including 100% of ABL and RCF lenders and an ad hoc group of lenders (the "Ad Hoc Group") comprising approximately 90% of existing term loans and approximately 55% of existing unsecured notes. The Transactions provide material benefits to the Company including (i) raising $300 million of new money to boost liquidity, (ii) amending financial covenants to increase revolving credit facility access, (iii) capturing discount on participating debt of approximately $154mm, and (iv) extending maturities. Subsequent to the Transactions, the Company expects to make one or more offers to non-Ad Hoc Group holders of existing terms loans and existing notes, including an exchange offer to holders of existing notes.

On August 22, 2024, the Company caused its newly formed subsidiary Vortex Opco, LLC, a Cayman Islands limited liability company (the "Cayman Borrower"), to enter into a new senior secured revolving credit facility (the "New Revolver") and term loan facility (together, the "Cayman Credit Facilities") and issue (or commit to issue) approximately $431 million principal amount of new first-lien first-out debt, primarily in the form of term loans (the "First-Out Term Loan") and approximately $1,657 million principal amount of new first-lien second-out term loans (the "Second-Out Term Loan" and together with the First-Out Term Loan, the "New Term Loans"). The Cayman Borrower also issued (or committed to issue) approximately $125 million of first-lien third-out 8.000% senior secured notes due 2030 under a new indenture (the "New Notes" and collectively with the New Term Loans, the "New Debt").

Pursuant to an open market purchase agreement with the Ad Hoc Group, the Company, through an intercompany facility (the "Intercompany Loan") entered into between the existing borrower and existing issuer entity PECF USS Intermediate Holding III Corporation, a Delaware corporation (the "Existing Borrower") and the Cayman Borrower, used the proceeds of the New Debt to purchase (or commit to purchase) $1,744 million in aggregate principal amount of existing term loans from participating lenders and $307 million in aggregate principal amount of existing notes from participating noteholders, and repaid its existing $60 million bridge facility in full.

The New Revolver, the First-Out Term Loan and the New Notes have a maturity of April 30, 2030. The Second-Out Term Loan has a maturity of December 17, 2028 and may be extended by the Company to April 30, 2030 subject to the payment of an extension fee and rate increase. The New Debt is guaranteed on a senior secured basis by the Existing Borrower and all the U.S. guarantors of the existing debt as well as the Cayman parent company of the Cayman Borrower. The New Debt is secured on a first lien basis by substantially all of the Company's assets that currently secure the existing term loans, on a pari passu basis with the existing term loans and among the New Debt, with a second priority lien on ABL collateral. In addition, the New Debt is also secured by amounts owed under the Intercompany Loan and by equity interests in the Cayman Borrower and its Cayman parent. The existing term loans will not receive a lien on such intercompany interests or a guarantee from the Cayman Borrower, and the existing notes will remain unsecured and will not receive a guarantee from the Cayman Borrower.

In connection with the Transactions, the Ad Hoc Group consented to the adoption of certain amendments to the existing term loan facility and the existing indenture, each of which became effective immediately prior to the closing of the transactions. Among other modifications, the amendments eliminated restrictive covenants in the existing debt.

The Company also entered into an amendment to its existing ABL credit facility extending the maturity to April 30, 2030 (or August 22, 2029 if certain net leverage ratio tests are not satisfied on such date). The Company's existing cash-flow revolver was rolled over into the New Revolver on a cashless dollar-for-dollar basis.

As a result of the Transactions, the Company increased its liquidity by approximately $300 million (before giving effect to the use of proceeds thereof) and reduced its pre-transaction debt obligations by more than $150 million through the Transactions.

"This transaction positions the Company for long-term success and benefits our key stakeholders," said James Hyman, CEO of United Site Services. "The transaction deleverages our balance sheet through discount capture, provides critical liquidity for our operational needs through $300mm of new money, and extends maturities to 2030."

PJT Partners LP served as financial advisor and Milbank LLP served as legal counsel to United Site Services. Moelis served as financial advisor and Akin Gump Strauss Hauer & Feld LLP served as legal counsel to the Ad Hoc Group.

The New Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any other securities laws, and the New Notes cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state.

About United Site Services

With over 140 locations coast-to-coast, United Site Services is the nation's largest provider of portable sanitation services and complementary site solutions in the United States, including portable restrooms and trailers, hand hygiene stations, temporary fence and more. Learn more at www.unitedsiteservices.com.

Media Contacts

Andrew Merrill / John Perilli
Prosek Partners for United Site Services
[email protected]

SOURCE United Site Services Inc.