Item 1.01 Entry into a Material Definitive Agreement.
On July 11, 2017, ABM Industries Incorporated (“ABM”)
entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Grade Sub One, Inc., a wholly owned subsidiary
of ABM (“Merger Sub One”), Grade Sub Two, LLC, a wholly owned subsidiary of ABM (“Merger Sub Two”), GCA
Holding Corp. (“GCA”) and the Securityholder Representative referred to therein.
Pursuant to the terms and subject to the conditions set forth
in the Merger Agreement and as previously announced, ABM will acquire GCA from affiliates of Thomas H. Lee Partners, L.P. and Goldman
Sachs Merchant Banking Division and the other GCA shareholders through a merger of Merger Sub One with and into GCA (the “First
Merger”), with GCA continuing as the surviving corporation and a wholly owned subsidiary of ABM, followed by a merger
of the surviving corporation with and into Merger Sub Two (the “Second Merger,” and, together with the First Merger,
the “Mergers”), with Merger Sub Two continuing as the surviving limited liability company and a wholly owned subsidiary
of ABM.
Under the terms of the Merger Agreement, ABM will acquire GCA for $851 million in cash and approximately 9.5 million shares of ABM common stock. The cash consideration is subject to customary
adjustments for working capital and net debt.
Following the closing of the First Merger, affiliates of Thomas
H. Lee Partners, L.P. and Goldman Sachs Merchant Banking Division will own, in the aggregate, approximately 14% of ABM’s
outstanding shares and will enter into a shareholders agreement with the Company providing for, among other things, customary standstill
and voting obligations, transfer restrictions and registration rights.
ABM executed a commitment letter, dated July 11, 2017, with
JPMorgan Chase Bank, N.A. and BofA Merrill Lynch that provides for a four-month commitment, for up to $1.6 billion of financing.
ABM plans to fund the cash portion of the purchase price and transaction expenses via its amended revolving credit facility, in
addition to a five-year amortizing term loan.
Each of ABM’s and GCA’s board of directors has approved
the Merger Agreement and the transactions contemplated thereby, including the Mergers, and the Merger Agreement has also been approved
and adopted by the requisite shareholders of GCA. The parties’ obligations to consummate the Mergers are subject to customary
closing conditions, including, among others, conditions relating to the expiration or termination of the applicable antitrust waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The parties to the Merger Agreement have each made customary
representations, warranties and covenants in the Merger Agreement, including, among others, GCA’s agreement to conduct its
business in the ordinary course of business consistent with past practice between the date of the Merger Agreement and the closing,
and the parties’ agreement to use reasonable best efforts to consummate the transactions. ABM has agreed to comply with all
restrictions and conditions required by any governmental entity with respect to antitrust laws.
The Merger Agreement contains certain termination rights of
the parties, including if (1) the closing has not occurred on or prior to November 7, 2017 and (2) the other party has breached
its representations, warranties or covenants, subject to customary materiality qualifications and the ability to cure.
The foregoing description of the Merger Agreement and the transactions
contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, a copy
of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
The Merger Agreement has been included in this report to provide
investors with information regarding its terms and conditions. It is not intended to provide any other factual information about
ABM, Merger Sub One, Merger Sub Two or GCA or any of their respective subsidiaries. The representations, warranties and covenants
contained in the Merger Agreement were made only for purposes of that agreement and as of specific dates, were solely for the benefit
of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties,
including being qualified by confidential disclosures made for
the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as
facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to
investors. Investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties
and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of ABM, Merger Sub One,
Merger Sub Two or GCA or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter
of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may
not be fully reflected in ABM’s public disclosures.