UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported) August 12, 2010
U.S.
AUTO PARTS NETWORK, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-33264
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68-0623433
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(State or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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17150
South Margay Avenue, Carson, CA 90746
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (310) 735-0553
N/A
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry into a Material Definitive Agreement.
On August
12, 2010, U.S. Auto Parts Network, Inc. and its subsidiaries (“USAP” or the
“Company”) completed the purchase (the “Acquisition”) of all of the issued and
outstanding shares of Automotive Specialty Accessories and Parts (“WAG”), the
owner of Whitney Automotive Group and a leader in automobile aftermarket
performance parts and accessories market. Assets acquired include intangible
assets consisting of technology, trademarks and brand names, and a 350,000
square foot distribution center with offices located in La Salle,
Illinois. The purchase price for WAG is $27.5 million in cash, and
USAP will additionally assume approximately $11 million of negative working
capital. The Acquisition is an “as is – where is” transaction, with
limited representations, warranties and covenants from either party to the
Acquisition. A copy of the press release issued by the Company announcing the
closing of the Acquisition is attached as Exhibit 99.1 and is incorporated
herein by reference.
On August
13, 2010, USAP executed a Loan and Security Agreement (the “Loan Agreement”) and
other definitive documentation for a $35 million secured credit facility (the
“Loan”). Silicon Valley Bank is the lender under the
facility.
USAP
intends to use the facility to refund to it a portion of the purchase price of
the acquisition of the shares of WAG, which is described above and which was
announced previously. The facility is comprised of a term loan in the
original principal amount of $25 million and a revolving line of credit with
availability up to $10 million. The facility has a final maturity date of June
30, 2014, and borrowings under the facility bear interest, at the election of
the Company, at LIBOR plus a margin of from 2.00% to 3.00% per annum, or at the
Wall Street Journal Prime Rate plus a margin of from 1.00% to 2.00% per annum,
based upon the Company’s maximum funded debt ratio. An unused revolving line fee
is payable on the undrawn committed amount of the revolving line of credit.
Interest on outstanding borrowings under both facilities is payable no less than
quarterly, and the outstanding principal of the term loan amortized over four
years and payable quarterly, with any outstanding amount under the facility to
be paid in full on the final maturity date. Borrowings under the facility are
secured by liens over all assets of the Company, including shares of stock in
each of USAP’s subsidiaries. Ten of USAP’s subsidiaries, are acting
as co-borrowers under the facility.
The Loan Agreement requires USAP to
comply with a number of covenants, including financial covenants related to
Maximum Funded Debt to Consolidated EBITDA, Liquidity, and Consolidated Fixed
Charge Coverage Ratios; negative pledge requirements; requirements to deliver
quarterly and annual consolidated financial statements; requirements to maintain
adequate insurances; prohibitions on changes in the business and disposition of
the Company’s assets; and other customary covenants. The Loan Agreement includes
usual and customary events of default and remedies for facilities of this
nature.
The
foregoing description of the Acquisition and the Loan does not purport to be
complete and is qualified in its entirety by reference to the Stock Purchase
Agreement, a copy of which was filed as Exhibit 10.57 to a Current Report on
Form 8-K filed on August 4, 2010, and to the Loan and Security Agreement, a copy
of which was filed as Exhibit 10.59 in the Company’s Quarterly Report on Form
10-Q for the Second Quarter of 2010 , each of which is incorporated herein by
reference.
Item
2.01. Completion of Acquisition or Disposition of Assets.
The
information provided by Item 1.01 of this Current Report on Form 8-K is
hereby incorporated into this Item 2.01 by reference.
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 above under Item 1.01 is incorporated into this Item 2.03
by reference.
Item
8.01. Other Events.
On August 17, 2010, USAP issued a press
release announcing the closing of the Acquisition, a copy of which is filed as
Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated herein by
reference
Forward-Looking
Statements
This
report and the exhibits filed herewith contain forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. These statements include statements with respect to the
potential benefits to USAP and its customers of the Acquisition, the timing for
completing and integrating the Acquisition, WAG’s performance during 2010, the
markets in which USAP and WAG participate and that are targeted by the
Acquisition, and the complementary nature, synergies and other expected benefits
of the Acquisition to USAP. Actual results could vary materially from
those described as a result of a number of factors, including the risk that all
of the conditions to the Acqusition may not be satisfied or USAP may otherwise
fail to acquire WAG on a timely basis or at all; USAP may not be able to
successfully integrate the operations WAG on a timely basis or at all; that USAP
may not be able to retain key personnel of WAG after the Acqusition; that WAG
may be subject to unanticipated liabilities or accounting charges as a result of
the Acquisition; that WAG mayperform worse than expected during the remainder of
2010 or in future periods, that the demand for WAG’s products may be weaker than
anticipated in its target markets; that USAP may not be able to realize all or
some of the expected synergies and benefits from the Acquisition, and that
integrating WAG with USAP’s operations may cause USAP’s management to divert
more time and resources to those activities than anticipated, and other risks
and uncertainties described in USAP’s most recent Annual Report on Form 10-K,
most recent Quarterly Report on Form 10-Q and any subsequent SEC
filings. You are urged to consider statements that include the words
“may,” “will,” “would,” “could,” “should,” “believes,” “potential,” “expects,”
“plans,” “anticipates,” “intends,” or the negative of those words or other
comparable words to be uncertain and forward-looking. USAP undertakes
no obligation to update any forward-looking statements to reflect new
information, events or circumstances after the date they were made, or to
reflect the occurrence of unanticipated events.
Item 9.01.
Financial Statements and Exhibits
(d)
Exhibits. The following exhibits are filed with this Current Report on Form
8-K:
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Exhibit
No.
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Description
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10.59
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Loan
and Security Agreement by and between U.S. Auto Parts Network, Inc. and
its subsidiaries, and Silicon Valley Bank, dated August 13, 2010 (incorporated
by reference to the Company’s Quarterly Report on Form 10-Q for the
Quarter Ended July 3, 2010)
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99.1
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Press
Release of August 17, 2010 announcing closing of Acquisition of
WAG
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Dated: August
17, 2010
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U.S.
AUTO PARTS NETWORK, INC.
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By:
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/s/ THEODORE R. SANDERS
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Theodore
R. Sanders
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Chief
Financial Officer
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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10.59
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Loan
and Security Agreement by and between U.S. Auto Parts Network, Inc. and
its subsidiaries, and Silicon Valley Bank, dated August 13, 2010 (incorporated
by reference to the Company’s Quarterly Report on Form 10-Q for the
Quarter Ended July 3, 2010)
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99.1
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Press
Release of August 17, 2010 announcing closing of Acquisition of
WAG
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