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Kratos offer oversubscribed, to accept 28.32% of tendered 7% notes
New York, Sept. 22 – Kratos Defense & Security Solutions, Inc. said that its asset-sale tender offer for up to $175 million of its 7% senior secured notes due 2019 was oversubscribed.
Holders tendered $618,647,000 of the securities by the deadline of 11:59 p.m. ET on Sept. 21, according to a news release.
Kratos said it will accept tenders on a pro rata basis, applying a factor of 28.3207% to submitted responses.
Settlement was scheduled for Tuesday,
The company announced the offer on Aug. 24, saying it would purchase the notes at par plus accrued interest using proceeds from an asset sale.
Kratos closed the sale of the U.S. and U.K. operations of its electronic products division to Ultra Electronics Holdings plc for $260 million in cash plus up to $5 million for taxes incurred as part of the transaction, less a $2 million escrow to satisfy any purchase price adjustments and a working capital adjustment estimated as a net reduction of $7.6 million, according to a separate press release.
The company expects to pay $13 million in transaction-related costs and about $10 million in federal and state income taxes, resulting in net cash proceeds to the company of about $232.4 million.
The tender offer is required under the note terms after an asset sale, the company noted.
The tender plans were announced on June 1.
SunTrust Robinson Humphrey, Inc. (404 926-5047) is the dealer manager. D.F. King & Co. (800 870-0653, 212 269-5550 or kratos@dfking.com) is the tender agent and information agent.
Kratos also paid down the $41 million of outstanding debt under its $110 million bank credit facility.
Kratos is a national security solutions provider based in San Diego.
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