United Site Services Announces Recapitalization Update

WESTBOROUGH, Mass., Sept. 3, 2024 /PRNewswire/ -- United Site Services (the "Company") announced (i) the expiration of the tax fungibility early participation period, as of 5:00 p.m. (New York City time) on August 29, 2024 (the "Fungibility Early Participation Date"), of its previously announced Exchange Offer of any and all of PECF USS Intermediate Holding III Corporation's 8.000% Senior Notes due 2029 (the "Existing Notes") for (a) either Vortex Opco, LLC (the "Issuer")'s First Out Term Loans or First Out Notes, and (b) the Issuer's Third Out Notes, on the terms and subject to the conditions set forth in an offering memorandum, dated August 22, 2024, related to the Exchange Offer (the "Offering Memorandum"), and (ii) the borrowing of additional Second Out Term Loans under the Cayman Credit Agreement (the "Second Out Term Loan Borrowing"), all of which are expected to settle today, September 3, 2024 (the "Fungibility Early Settlement Date"). Capitalized terms not defined in this press release have the same meanings ascribed to them in the Offering Memorandum.

Upon closing on the Fungibility Early Settlement Date, including the amounts issued as part of the previously announced Transactions on August 22, 2024, the Company will have issued (i) approximately $447 million principal amount of new First Out Debt, (ii) approximately $1,778 million principal amount of Second Out Term Loans, and (iii) approximately $194 million principal amount of Third Out Notes, the proceeds of which were used to repay and repurchase certain of the Company's existing indebtedness.

As a result of these transactions, the Company will have (i) increased its liquidity by approximately $300 million (before giving effect to the use of proceeds and transaction costs and expenses thereof), (ii) amended financial covenants to increase revolving credit facility access, (iii) captured discount on participating debt of over $200 million, and (iv) extended maturities of the Company's debt under its ABL Credit Facility, CF Revolving Credit Facility, and participating term loans and notes to April 2030.  These transactions position the Company for growth and demonstrate the continued support of its key stakeholders.

As described below, eligible holders that have not yet participated in the Exchange Offer  still have the ability to do so if they validly tender their Existing Notes at or prior to 5:00 p.m. (New York City time) on September 6, 2024 (the "Early Participation Date") and receive the Early Participation Payment (as defined below). The Exchange Offer will then remain open until 5:00 p.m. (New York City time) on September 23, 2024.

Exchange Offer

The Exchange Offer remains open to participation and will expire at 5:00 p.m. (New York City time) on September 23, 2024 (the "Expiration Date"). Pursuant to the terms of the Exchange Offer, eligible holders that validly tender their Existing Notes at or prior to 5:00 p.m. (New York City time) on the Early Participation Date will receive, per $1,000 principal amount of Existing Notes validly tendered, the same consideration as eligible holders that tendered their Existing Notes on or prior to the Fungibility Early Participation Date, which is a combination of:

Eligible holders of Existing Notes that validly tender their Existing Notes after the Early Participation Date but on or prior to the Expiration Date will not receive the Early Participation Payment and therefore will receive, per $1,000 principal amount of Existing Notes validly tendered, a combination of (i) $144 principal amount of First Out Term Loans or $144 principal amount of First Out Notes and (ii) $602 principal amount of Third Out Notes.

The Company expects to settle any Existing Notes validly tendered after the Fungibility Early Participation Date on or about the second business day following the Expiration Date, or September 26, 2024. Any Existing Notes that have been validly tendered pursuant to the Exchange Offer may not be revoked or withdrawn, except as may be required by applicable law.

Other Information

On August 28, 2024, Standard and Poor ("S&P") placed the Company's existing term loan facility, the existing cash-flow revolver and the Existing Notes into technical default and lowered its credit rating to 'D'. The Company received a 'D' rating as a result of its debt repurchases at a discount. This rating does not mean that the Company is in default under any of its existing indebtedness. S&P reported that they expect to review the Company's rating after the Exchange Offer closes and that the proposed capital structure appears to address several credit benefits including higher liquidity, expected reduction in debt and extension of debt maturities. The Company expects this 'D' rating to be removed at that time.

This press release does not constitute an offer or an invitation to participate in the Exchange Offer or the concurrent Second Out Term Loan Borrowing. The Exchange Offer is only being made pursuant to the Offering Memorandum, including annexes and exhibits thereto and information incorporated by reference thereunder (the "Exchange Offer Materials"), and the concurrent Second Out Term Loan Borrowing is only being made pursuant to the certain materials presented to its existing lenders and the Cayman Credit Agreement (the "Term Loan Materials"). Eligible holders are urged to read the Exchange Offer Materials carefully before making any decision with respect to their Existing Notes and existing lenders are urged to read the Term Loan Materials carefully before making any decision with respect to their existing term loans.

This press release is for informational purposes only and does not represent an offer to sell securities or a solicitation to buy securities in the United States or in any other country. This press release is released for disclosure purposes only, in accordance with applicable legislation. It does not constitute marketing material, and should not be interpreted as advertising an offer to sell or soliciting any offer to buy securities issued by the Company in any jurisdiction where it is illegal to do so. This press release to the market is not for distribution in or into or to any person located or resident in any jurisdiction where it is unlawful to release, publish or distribute this announcement.

Neither the U.S. Securities and Securities Exchange Commission, any U.S. state securities commission nor any regulatory authority of any other country has approved or disapproved of the Exchange Offer, passed upon the merits or fairness of the Exchange Offer, or passed upon the adequacy or accuracy of the disclosure in the Offering Memorandum.

The Exchange Offer is being made and will be issued only: (i) in the United States, to holders of Existing Notes who are (x) "qualified institutional buyers" (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")) or (y) institutional "accredited investors" within the meaning of Rule 501(a)(1), (2), (3), (7) or (8) of Regulation D under the Securities Act; and (ii) outside the United States, to holders of Existing Notes who are not "U.S. persons" (as defined in Rule 902 under the Securities Act) in reliance on Regulation S of the Securities Act. 

Neither the delivery of this announcement, the Exchange Offer, any exchange of Existing Notes pursuant to the Exchange Offer, any purchase of existing term loans nor any borrowing of Second Out Term Loans shall under any circumstances create any implication that the information contained in this announcement, the Offering Memorandum, or the Term Loan Materials is correct as of any time subsequent to the date hereof or thereof or that there has been no change in the information set forth herein or therein or in the Company's affairs since the date hereof or thereof.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934 that are not based on historical facts and are not assurances of future results. These forward-looking statements are based on management's current expectations and estimates about future events and financial trends, which affect or may affect the Company's businesses and results of operations. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect" and similar words are intended to identify estimates and forward-looking statements. These statements include but are not limited to forward-looking statements about the planned Exchange Offer and Second Out Term Loan Borrowing. Although the Company believes that these forward-looking statements are based upon reasonable assumptions, these statements are subject to several risks and uncertainties and are made in light of information currently available to the Company. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations and the Company's future results may differ materially from those expressed in these estimates and forward-looking statements.

All forward-looking statements are expressly qualified in their entirety by this cautionary statement, and you should not place reliance on any forward-looking statement contained in this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.

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.

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

SOURCE United Site Services Inc.