Horizon Global Announces Successful Completion of $225M Term Loan Facility

Company enters into six-year term loan agreement with lower interest rate and greater flexibility to execute long-term strategic plan

Horizon Global Corporation (NYSE: HZN), one of the leading manufacturers of branded towing and trailering equipment, today announced the closing of an attractive new financing agreement with Atlantic Park Strategic Capital Fund, L.P. (“Atlantic Park”). The six-year agreement addresses all of the Company’s near-term maturities, provides long-term stability to its capital structure and offers the financial flexibility necessary to pursue its strategic initiatives. Proceeds received by the Company will be used to:

Repay in full all outstanding debt under the Company’s existing term loan, which would have otherwise matured on April 1, 2022. As a result of the repayment of all amounts outstanding under the existing term loan, it will be terminated and will no longer be in effect.

Create a $125.0 million delayed draw term loan with enough capacity to repay all of the Company’s outstanding convertible senior notes at maturity on July 1, 2022. The delayed draw term loan has a nominal ticking fee and the Company is not required to draw any amounts prior to June 30, 2022. When the delayed draw term loan is used to fully repay the converts, the Company will not have any substantial maturities prior to February 2027, other than its asset-based revolving credit facility.

Key benefits to the Company of the new agreement also include:

Significant reduction in interest rates, with new rate of LIBOR + 750 (1% LIBOR floor).

Flexible financial covenants. Net leverage ratio covenant, which will be initially tested on March 31, 2023, set with significant headroom to the Company’s forecasted earnings growth and deleveraging.

Call protection schedule provides significant strategic optionality to the Company. Following a one-year no-call period, the agreement provides for a call premium of 102.5 for each of years two through five and par thereafter.

“This financing is a testament to the tremendous effort of all Horizon Global employees. We’ve gained substantial momentum since late 2019, and we continue to work as one global team to optimize the business on a daily basis. In addition to our significant operating improvements over the past 16 months, we have now fully addressed our capital structure issues,” stated Terry Gohl, Horizon Global’s President and Chief Executive Officer. “This momentum continues as we welcome Atlantic Park as a lending partner. Atlantic Park, with its deep credit expertise and growth equity focus, is a terrific partner for us as we enter the next stage of our continued growth and transformation on behalf of our shareholders. We want to thank Atlantic Park for its support of both our management team and the Company’s long-term strategic goals.”

Gohl continued, “In executing against our strategic plan, we’ve challenged ourselves to be opportunistic at every level. This financing is consistent with this mindset. With a six-year tenor, materially lower interest rate and a flexible covenant structure, this financing optimizes our capital structure and provides the financial flexibility we need to support the long-term growth of this business.”

Matthew Bonanno, Managing Director at General Atlantic and member of the Atlantic Park Investment Committee, said, “Atlantic Park is pleased to partner with Horizon Global and to provide an optimized, long-term capital structure to support the business. As a consumer-branded products business, we plan to leverage our expertise in the space to contribute to the company’s continued momentum. We look forward to working alongside Terry and the Horizon Global management team to capture additional growth opportunities across the e-commerce sales channels in order to further aid the company’s transformation.”

The new term loan will bear interest at LIBOR + 750 basis points, with a 1% LIBOR floor, and will mature on February 2, 2027. In connection with the new term loan, the Company issued to Atlantic Park warrants to purchase up to 10.0% of the Company’s pro forma fully diluted shares of common stock at an exercise price of $9.00 per share. The warrants have a five-year term, provide alignment between Atlantic Park and the Company’s shareholders as well as reflect Atlantic Park’s confidence in the growth and long-term value of the Company. Matthew Bonanno will join the Horizon Global board of directors as an observer.

Jefferies served as the exclusive financial advisor to Horizon Global on the transaction.

About Horizon Global

Headquartered in Plymouth, MI, Horizon Global is the #1 designer, manufacturer and distributor of a wide variety of high-quality, custom-engineered towing, trailering, cargo management and other related accessory products in North America and Europe. The Company serves OEMs, retailers, dealer networks and the end consumer as the category leader in the automotive, leisure and agricultural market segments. Horizon provides its customers with outstanding products and services that reflect the Company’s commitment to market leadership, innovation and operational excellence. The Company’s mission is to utilize forward-thinking technology to develop and deliver premium products for our customers, engage with our employees and realize value creation for our shareholders.

Horizon Global is home to some of the world’s most recognized brands in the towing and trailering industry, including: Draw-Tite, Reese, Westfalia, BULLDOG, Fulton and Tekonsha. Horizon Global has approximately 3,900 employees.

For more information, please visit www.horizonglobal.com.

About Atlantic Park

Atlantic Park is a strategic joint venture between General Atlantic, a global growth equity firm established 40 years ago, and Iron Park Capital Partners, a deeply experienced credit-focused asset manager. Atlantic Park provides capital solutions to address financing needs for high-quality companies seeking a trusted partner. Atlantic Park takes a broad industry focus and partners with companies spanning a number of sectors, including Consumer, Financial Services, Healthcare and Technology, with a focus on companies in the United States and Europe. For more information, please visit www.atlanticpark.com.

Contacts

Jeff Tryka, CFA
Investor Relations, Lambert & Co.
(616) 295-2509
jtryka@horizonglobal.com