Item 1.01 Entry into a Material Definitive Agreement
On January 7, 2021, The E.W. Scripps Company ("Company") entered into a Sixth
Amendment to Third Amended and Restated Credit Agreement (Incremental Facility)
("Sixth Amendment"). Under the Sixth Amendment, we issued an $800 million term
loan B. The term loan matures in 2028 with interest payable at rates based on
Libor, plus a margin of 3.00%. Additionally, the Sixth Amendment provided that
the Libor rate could not be less than 0.75% for our term loans that mature in
2026 and 2028. A copy of the Third Amended and Restated Credit Agreement dated
as of April 28, 2017 (as amended by the First Amendment, dated as of October 2,
2017, the Second Amendment, dated as of April 3, 2018, the Third Amendment,
dated as of November 20, 2018, the Fourth Amendment, dated as of May 1, 2019,
the Fifth Amendment, dated as of December 18, 2019, and the Sixth Amendment,
dated as of January 7, 2021) is filed as Exhibit 10.1. The proceeds of the term
loan were used toward the financing of the Company's acquisition of ION Media
Networks, Inc. ("ION Media").
Item 2.01 Completion of Acquisition or Disposition of Assets
On January 7, 2021, the Company closed on the previously announced $2.65 billion
merger with ION Media. The transaction was financed with a combination of
cash-on-hand, $600 million of financing from Berkshire Hathaway, Inc.
("Berkshire Hathaway") in exchange for Series A Preferred Shares of the Company,
the $800 million term loan B issuance, the issuance of $550 million aggregate
principal amount senior secured notes and the issuance of $500 million aggregate
principal amount senior unsecured notes. The Company issued a press release
related to the close of the transaction which is attached hereto as Exhibit
99.1.
This Current Report on Form 8-K also includes the required Item 9.01(a)
Financial Statements of Businesses Acquired.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities
The Company entered into a Securities Purchase Agreement (the "Securities
Purchase Agreement") with Berkshire Hathaway, pursuant to which Berkshire
Hathaway provided $600 million of financing in exchange for 6,000 Series A
Preferred Shares of the Company having a face value of $100,000 per share (the
"Preferred Shares") and a warrant to purchase approximately 23.1 million Class A
common shares of the Company at $13.00 per share (the "Warrant"). The Preferred
Shares are perpetual and will be redeemable at the option of the Company
beginning on the fifth anniversary of issuance, and redeemable at the option of
the holders in the event of a Change of Control (as defined in the terms of the
Preferred Shares), in each case at a redemption price of 105% of the face value,
plus accrued and unpaid dividends (whether or not declared). As long as the
Company pays quarterly dividends in cash on the Preferred Shares, the dividend
rate will be 8% per annum. If dividends on the Preferred Shares, which compound
quarterly, are not paid in full in cash, the rate will increase to 9% per annum
for the rest of time that the Preferred Shares are outstanding. Under the terms
of the Preferred Shares, the Company will be prohibited from paying dividends on
and purchasing its common shares until all Preferred Shares are redeemed. The
Warrant is exercisable at the holder's option at any time or from time to time,
in whole or in part, until the first anniversary of the date on which no
Preferred Shares remain outstanding. The sale of the Preferred Shares and the
issuance of the Warrant constitute, and the sale of Class A Common Shares upon
exercise of the Warrant will constitute, transactions exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously announced by the Company, Jason Combs has been appointed as Chief
Financial Officer. Mr. Combs' appointment become effective on January 7, 2021
following the closing of the ION Media transaction.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
The Company has amended its Articles of Incorporation to state the terms of the
preferred stock issued to Berkshire Hathaway. The Amendment to Articles of
Incorporation is filed herewith as Exhibit 4.2.
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Item 9.01 Financial Statements and Exhibits
(a)Financial Statements of Businesses Acquired
The audited consolidated financial statements of ION Media Networks, Inc., and
its subsidiaries, as of and for each of the years then ended December 31, 2019
and 2018, are filed herewith as Exhibit 99.2.
The unaudited consolidated financial statements of ION Media Networks, Inc., and
its subsidiaries, as of September 30, 2020 and December 31, 2019 and for the
nine months ended September 30, 2020 and 2019, are filed herewith as Exhibit
99.3.
(b)Pro Forma Financial Information
The pro forma financial information of The E.W. Scripps Company reflecting the
ION Media transaction will be filed by amendment to this Form 8-K as soon as
practicable, but not later than 75 days after the closing date of the
transaction.
(c) Exhibits
Exhibit
Number Description of Item
Agreement and Plan of Merger by and among The E.W. Scripps Company, Scripps
2.1 Media, Inc., Scripps Faraday, Inc., ION Media Networks, Inc., and BD ION
Equityholder Rep LLC, dated September 23, 2020(1)
4.1 Warrant Agreement dated January 7, 2021, by and between The E.W. Scripps
Company and Berkshire Hathaway, Inc.
4.2 Amendment to Articles of Incorporation
Third Amended and Restated Credit Agreement dated as of April 28, 2017 (as
amended by the First Amendment, dated as of October 2, 2017, the Second
10.1 Amendment, dated as of April 3, 2018, the Third Amendment, dated as of
November 20, 2018, the Fourth Amendment, dated as of May 1, 2019, the Fifth
Amendment, dated as of December 18, 2019 and the Sixth Amendment, dated as of
January 7, 2021)
10.2 Securities Purchase Agreement, by and between The E.W. Scripps Company and
Berkshire Hathaway, Inc., dated September 23, 2020(2)
10.3 Registration Rights Agreement dated January 7, 2021, by and between The E.W.
Scripps Company and Berkshire Hathaway, Inc.
23.1 Consent of Independent Auditors
99.1 Press release dated January 7, 2021
Audited consolidated financial statements of ION Media Networks, Inc., and its
99.2 subsidiaries, as of and for each of the years then ended December 31, 2019 and
2018
Unaudited consolidated financial statements of ION Media Networks, Inc., and
99.3 its subsidiaries, as of September 30, 2020 and December 31, 2019 and for the
nine months ended September 30, 2020 and 2019
(1) Incorporated by reference to The E.W. Scripps Company Current Report on Form
8-K/A dated September 23, 2020.
(2) Incorporated by reference to The E.W. Scripps Company Current Report on Form
8-K dated September 23, 2020.
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