0000898173 false O REILLY AUTOMOTIVE INC 0000898173 2020-03-24 2020-03-25 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 

 

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): March 25, 2020

 

 

O’REILLY AUTOMOTIVE, INC.
(Exact Name of Registrant as Specified in its Charter)
 
Missouri 000-21318 27-4358837

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 
233 South Patterson Avenue
Springfield, Missouri 65802
(Address of principal executive offices, Zip code)
 
(417) 862-6708
(Registrant’s telephone number, including area code)
 
(Not Applicable)
(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:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbol(s)   Name of Each Exchange on which
Registered
Common Stock $0.01 par value   ORLY   The NASDAQ Stock Market LLC
        (NASDAQ Global Select Market)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of Securities Act of 1933 (230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2).

 

¨ Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

  Item 1.01. Entry into a Material Definitive Agreement.

 

Underwriting Agreement

 

On March 25, 2020, O’Reilly Automotive, Inc. (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC and U.S. Bancorp Investments, Inc., as the representatives of the underwriters named on Schedule I thereto (the “Underwriters”), with respect to the Company’s issuance and sale of $500 million aggregate principal amount of the Company’s 4.200% Senior Notes due 2030 (the “Notes”). The issuance and sale of the Notes closed on March 27, 2020 (the “Closing Date”). The Underwriting Agreement includes customary representations, warranties and covenants. Under the terms of the Underwriting Agreement, the Company has agreed to indemnify the Underwriters against certain liabilities.

 

The estimated net proceeds from the offering of the Notes are expected to be approximately $495.7 million, after deducting the underwriting discounts and estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the offering of the Notes to repay outstanding borrowings under its credit facility and, to the extent any net proceeds remain, for general corporate purposes, which may include ordinary course working capital, repurchases of shares of common stock, and investments in other business opportunities, including acquisitions, and to pay related fees and expenses.

 

The above description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement, attached as Exhibit 1.1 hereto, and incorporated herein by reference.

 

Supplemental Indenture

 

The terms of the Notes are governed by an Indenture, dated as of May 20, 2019 (the “Base Indenture”), by and between the Company and U.S. Bank National Association (the “Trustee”), as supplemented by the Second Supplemental Indenture, dated as of the Closing Date (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), by and between the Company and the Trustee.

 

The Notes mature on April 1, 2030 and bear interest at a rate of 4.200% per year. Interest on the Notes is payable on April 1 and October 1 of each year, beginning on October 1, 2020. The Notes are the Company’s general unsecured senior obligations and are equal in right of payment with all of the Company’s other existing and future unsecured and unsubordinated indebtedness, including the Company’s credit facility and the Company’s 4.875% Senior Notes due 2021, the Company’s 4.625% Senior Notes due 2021, the Company’s 3.800% Senior Notes due 2022, the Company’s 3.850% Senior Notes due 2023, the Company’s 3.550% Senior Notes due 2026, the Company’s 3.600% Senior Notes due 2027, the Company’s 4.350% Senior Notes due 2028 and the Company’s 3.900% Senior Notes due 2029 (such series of notes, collectively, the “Existing Notes”). The Notes are effectively junior to the Company’s future secured indebtedness, if any, to the extent of the value of the collateral securing such indebtedness.

 

 

 

 

The Notes are not initially guaranteed by any of the Company’s subsidiaries. However, if in the future, any of the Company’s subsidiaries incurs or guarantees obligations under the Company’s credit facility or certain other credit facility debt or capital markets debt of the Company or any future subsidiary guarantor, such subsidiary would be required to guarantee the Notes on a senior unsecured basis. The Company would be permitted to release any such future guarantee without the consent of holders of the Notes under the circumstances described in the Indenture.

 

Prior to January 1, 2030 (three months prior to the maturity date (such date, the “Par Call Date”)), the Notes are redeemable, in whole, at any time, or in part, from time to time, at the Company’s option, for cash, at a redemption price, plus accrued and unpaid interest to, but not including, the redemption date, equal to the greater of (1) 100% of the principal amount thereof, or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon that would have been due if the Notes matured on the Par Call Date, not including accrued and unpaid interest to, but not including, the redemption date, discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Yield (as defined in the Indenture) plus 50 basis points. On or after the Par Call Date, the Notes are redeemable, in whole, at any time, or in part, from time to time, at the Company’s option, for cash, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the redemption date.

 

Upon the occurrence of a Change of Control Triggering Event (as defined in the Indenture), unless the Company has exercised its right to redeem the Notes, each holder of Notes will have the right to require the Company to repurchase all or a portion of such holder’s Notes, for cash, at a repurchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, on the amount repurchased to, but not including, the date of repurchase.

 

The Indenture contains covenants that limit the ability of the Company and each of its subsidiaries, as applicable to, among other things: (i) create certain liens on its assets to secure certain debt; (ii) enter into certain sale and leaseback transactions; and (iii) in the case of the Company, merge or consolidate with another company or transfer all or substantially all of the Company’s property, in each case as set forth in the Indenture. These covenants are, however, subject to a number of important limitations and exceptions.

 

 

 

 

The Indenture also contains customary event of default provisions including, among others, the following: (i) default in the payment of principal of or premium, if any, on any Note when due at its maturity; (ii) default for 30 days in the payment when due of interest on the Notes; (iii) failure to comply with the other covenants or agreements in the Indenture or the Notes and failure to cure or obtain a waiver of such default within 90 days following notice as described below; (iv) a default under any debt for money borrowed by the Company or any future subsidiary guarantor that results in acceleration of the maturity of such debt, or failure to pay any such debt within any applicable grace period after final stated maturity, in an aggregate amount greater than (a) $25.0 million, at any time that any Existing Notes remain outstanding, or (b) $100.0 million at any time that no Existing Notes remain outstanding, without such debt having been discharged or acceleration having been rescinded or annulled; and (v) certain events of bankruptcy, insolvency or reorganization with respect to the Company or any future subsidiary guarantor that is a Significant Subsidiary (as defined in the Indenture), in each case as set forth in the Indenture. In the case of an event of default, other than a default under clause (v) above, the Trustee or the holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Company (and to the Trustee if the notice is given by the holders of the Notes), may declare the principal of and accrued and unpaid interest, if any, on the Notes to be immediately due and payable. If an event of default under clause (v) above occurs, the principal of and accrued and unpaid interest, if any, on the Notes will be immediately due and payable without any act on the part of the Trustee or holders of the Notes.

 

The Trustee is also a lender under the Company’s credit facility, and an affiliate of the Trustee was an underwriter in the offering of the Notes.

 

The offering of the Notes was registered under the Securities Act of 1933, as amended, pursuant to the Company’s shelf registration statement on Form S-3 which became automatically effective upon filing with Securities and Exchange Commission (the “SEC”) on March 1, 2019 (File No. 333-230033).

 

The above description of the Indenture and the Notes does not purport to be complete and is qualified in its entirety by reference to the Base Indenture (which was previously filed by the Company with the SEC) and the Second Supplemental Indenture (including the Form of Note included therein), attached as Exhibit 4.1 and referenced as Exhibit 4.2 hereto, respectively, and incorporated herein by reference.

 

In addition to the specific agreements and arrangements described above, from time to time, certain of the underwriters of the Notes and/or their respective affiliates have been, and may in the future be, lenders under the Company’s credit facility and have directly and indirectly engaged, and may engage in the future, in investment and/or commercial banking transactions with the Company for which they have received, or may receive, customary compensation and expense reimbursement.

 

 

 

 

  Item 9.01 Financial Statements and Exhibits.

 

  (d) Exhibits:

 

  Exhibit No.   Description
  1.1   Underwriting Agreement, dated as of March 25, 2020, by and among the Company and J.P. Morgan Securities LLC and U.S. Bancorp Investments, Inc., as the representatives of the underwriters named on Schedule I thereto.
  4.1   Second Supplemental Indenture, dated as of March 27, 2020, by and between the Company and the Trustee
  4.2   Form of Note (included in Exhibit 4.1)
  5.1   Opinion of Shook, Hardy & Bacon L.L.P.
  5.2   Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
  23.1   Consent of Shook, Hardy & Bacon L.L.P. (included in Exhibit 5.1)
  23.2   Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.2)
  104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

 

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.

 

Date:   March 27, 2020

  O’Reilly Automotive, Inc.
   
  By:   /s/ Thomas McFall
    Thomas McFall
    Executive Vice President and Chief Financial Officer
    (principal financial and accounting officer)

 

 

 

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