EXHIBIT 1
TERMINATION AGREEMENT dated as of February
7, 1999 (this "Agreement"), between BOSS
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INVESTMENT LLC, a Delaware limited liability
company ("Investor") and BUILDING ONE SERVICES
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CORPORATION, a Delaware corporation (the
"Company").
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WHEREAS, the Investor and the Company are parties to the Agreement and Plan
of Merger dated as of December 23, 1998 (the "Merger Agreement").
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WHEREAS, the parties desire to terminate the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual benefits to
be derived from this Agreement and the representations, warranties, covenants,
agreements and conditions hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE I
AGREEMENTS
1.1 Termination.
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The Investor and the Company agree that the Merger Agreement is hereby
terminated in accordance with Section 8.1(a) of the Merger Agreement (it being
understood that the Investor will not hereafter assert a termination of the
Merger Agreement under any other subsection of Section 8.1).
1.2 Press Releases; Non-Disparagement.
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(a) The Investor and the Company agree to consult with each other
before issuing, and provide each other the opportunity to review and comment
upon, any press release or other public statement that (i) relates to this
Agreement or the transactions contemplated by the Merger Agreement or (ii)
includes the name of the other party or Apollo Management, L.P. or any of its
affiliates. Neither the Investor nor the Company shall issue any such press
release or make any such public statement without the prior written consent of
the other party unless required by law. Notwithstanding the foregoing, the
Company agrees to issue prior to 9:00 a.m. on February 8, 1999, and the Investor
consents to the issuance of, the press release set forth in Exhibit 1.2(a).
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(b) The Investor and the Company agree (on their own behalf and on
behalf of each of their respective officers and directors) not to make or
publish, or cause to be made or published, any statement or information that
disparages, defames or in any way impugns the reputation of the Investor, Apollo
Management, L.P., the Company or any of their respective subsidiaries or
affiliates, or any employees or representatives thereof.
1.3 Financing Sources.
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The Investor agrees that if requested by any of the financing sources that
it has worked with in connection with the transactions contemplated by the
Merger Agreement, it will not object to such financing sources providing
financing to the Company.
ARTICLE II
MISCELLANEOUS PROVISIONS
2.1 Counterparts.
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This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement.
2.2 Governing Law.
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This Agreement shall be governed and construed in accordance with the laws
of the State of Delaware.
* * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
BOSS INVESTMENT LLC
/s/ Xxxxxxx Xxxxx
By: ____________________________
Name: Xxxxxxx Xxxxx
Title: Vice-President
BUILDING ONE SERVICES CORPORATION
/s/ X. Xxxxxxx Xxxx
By: ____________________________
Name: X. Xxxxxxx Xxxx
Title: EVP and General Counsel
[LOGO] BUILDING
O.N.E
SERVICES CORPORATION PRESS RELEASE
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For immediate release - February 8, 1999 Release No. 99-002
BUILDING ONE SERVICES CORPORATION
(NASDAQ - "BOSS") Company
Contact: Xxxxxxx Xxxxxxx
Building One Services
Corporation
(000) 000-0000
xxxxxxxx@xxxx.xxx
BUILDING ONE SERVICES ANNOUNCES TENDER OFFER PLAN
. Mutually Terminates Transaction with Apollo Management, L.P. Affiliate over
Proposed Transaction Amendments
. Announces Board Approval to Commence Tender Offer for 50% of Outstanding
Shares and Stock Options at $25 Per Share
. Announces Preliminary 4th Quarter Results of $0.38 Per Diluted Share, Topping
Analyst Consensus Estimates
. Announces 25% Increase in Year over Year Same Unit Backlog of $693.5
million vs. $553.4 million
Washington, D.C. (February 8, 1999)--Building One Services Corporation (NASDAQ:
BOSS) today announced that it has agreed to mutually terminate its merger
agreement with Boss Investment LLC, an affiliate of Apollo Management, L.P.,
entered into on December 23, 1998.
The merger agreement was conditioned on a number of items, including Boss
Investment's comfort with arrangements with management of Building One Services
regarding their stock after the recapitalization. Building One Services and Boss
Investment have been unable to agree to satisfactory terms with respect to such
arrangements and other matters and, therefore, have mutually terminated the
merger agreement.
Building One Services also announced that its Board of Directors has approved a
tender offer by the Company for approximately 23 million shares at $25 per share
plus 50% of outstanding stock options. The Company expects to receive shortly a
commitment letter from a major financial institution for $350 million in
high-yield debt financing and $350
BUILDING ONE SERVICES CORPORATION
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Press Release 99-002
million in a revolving credit facility. These instruments, coupled with
approximately $215 million in cash on the Company's balance sheet, will be used
to effect the tender offer, which is expected to commence next week. The $700
million in outside financing is expected to be subject to a number of customary
conditions, including completion of due diligence and execution of a definitive
credit agreement. The tender offer is expected to be completed in April 1999.
"We are gratified that Boss Investment has agreed to release the investment
bankers and commercial bankers who had conducted simultaneous due diligence so
that we may proceed to negotiate directly with them concerning the proposed
financing for our tender offer," said Xxxxxxxx Xxxxxxx, Chairman and Chief
Executive Officer of Building One Services.
"Our strong financial results, when coupled with improvements in the capital
markets for high yield financing since December, including the completion of two
high-yield debt financings by our direct competitors, is expected to enable us
to move forward with the proposed tender offer," said Xxxxxxx Xxxxxxx, Executive
Vice President and Chief Financial Officer of Building One Services. "This
transaction provides value to our shareholders and reconfigures our balance
sheet in a manner to provide a higher return on equity. In addition, this
transaction will preserve a significant public float in Building One Services
stock," said Xxxxxxx.
Building One Services Corporation also announced preliminary diluted earnings
per share of $0.38 for the fourth quarter and $1.16 for the year ended December
31, 1998. The full year results reflect a restatement of prior quarterly results
resulting from changes in the accounting treatment for certain acquisitions
that were previously accounted for as pooling-of-interests transactions.
Detailed financial results for the fourth quarter and full year will be released
in early March following the completion of the Company's annual audit.
"We are pleased that our fourth quarter results came in above the analyst
consensus estimate of $0.37 per share," said Xxxxxxx Xxxxxxx. "We are also
pleased that our 1998 year-end backlog expanded 25% to $693.5 million from year
ago levels of $553.4 million on a same unit basis," said Xxxxxxx.
BUILDING ONE SERVICES CORPORATION
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Press Release 99-002
Under the proposed tender offer, the Company is expected to utilize
approximately $575 million to repurchase approximately 23 million shares out of
approximately 46 million shares projected to be outstanding at the time of the
tender offer. In addition, the Company expects to spend approximately $15
million to repurchase 50% of outstanding stock options. It is estimated that the
Company will have approximately $20 million in financing, legal, accounting, and
other one-time charges associated with the tender offer.
"Given our historical run-rate of approximately $130 million in earnings before
interest, taxes, depreciation and amortization (EBITDA), our total debt to
EBITDA ratio would be approximately 3.0x and our EBITDA to debt service ratio
would be approximately 3.25x following the proposed tender offer financing.
These ratios should enable us to secure a significant credit facility to allow
us to continue our acquisition program, satisfy our projected earnout payment
requirements and provide for appropriate capital expenditures for the coming
fiscal year," said Xxxxxxx.
Building One Services Corporation is a leader in the facilities services
industry and has a corporate goal of becoming a national single-source provider
of facilities services. Facility services companies provide many products and
services needed for the routine operation and maintenance of a building.
Building One Services currently has annualized revenues of approximately $1.2
billion and has acquired companies in the electrical, mechanical and janitorial
segments of the facilities services industry.
The press release contains forward-looking statements. Such statements relate
to, among other things, the transactions contemplated by the tender offer; the
ability to secure the financing for the tender offer; the level of indebtedness
to be incurred by the Company; the ability to finance acquisitions; the future
earnings of the Company; and the Company's acquisition program. Any or all of
our forward-looking statements in this press release or in any other public
statements we make may turn out to be wrong. They can be affected by inaccurate
assumptions we might make or by known or unknown risks and uncertainties,
including, without limitation, the following: the risks associated with
significant indebtedness, the dependence on key personnel of the Company and
hourly wage and technical employees; risks related to the Company's
consolidation strategy; its ability to complete acquisitions and the continuing
consolidation in the industry; the ability to integrate acquisitions; risks
related to acquisition financing, including potential dilution; possible
significant amortization charges; exposure to downturns in commercial and
industrial construction; substantial competition; and other factors affecting
the Company's prospects described in the Company's most recent Registration
Statement on Form S-4 filed with the Securities and Exchange Commission on
August 3, 1998 and its other public filings.
BUILDING ONE SERVICES CORPORATION
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Press Release 99-002
Building One Services Corporation will hold a conference call on Monday,
February 8, 1999 at 9:30 a.m. Eastern time. To participate in the call from the
United States, dial in on 0-000-000-0000. For all callers outside of the United
States, dial in on 000-000-0000. All callers should ask to be included in the
"Building One Services Corporation Conference Call."
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