Aquilex Holdings LLC - FORM 8-K - EX-99.1 - December 23, 2011

Attached files

file filename
8-K - FORM 8-K - Aquilex Holdings LLCd274602d8k.htm
EX-10.2 - EX-10.2 - Aquilex Holdings LLCd274602dex102.htm
EX-10.1 - EX-10.1 - Aquilex Holdings LLCd274602dex101.htm
EX-10.4 - EX-10.4 - Aquilex Holdings LLCd274602dex104.htm
EX-10.3 - EX-10.3 - Aquilex Holdings LLCd274602dex103.htm
EX-10.5 - EX-10.5 - Aquilex Holdings LLCd274602dex105.htm
EX-10.6 - EX-10.6 - Aquilex Holdings LLCd274602dex106.htm
EX-10.7 - EX-10.7 - Aquilex Holdings LLCd274602dex107.htm
EX-99.2 - EX-99.2 - Aquilex Holdings LLCd274602dex992.htm
EX-10.8 - EX-10.8 - Aquilex Holdings LLCd274602dex108.htm
EX-99.3 - EX-99.3 - Aquilex Holdings LLCd274602dex993.htm
EX-99.5 - EX-99.5 - Aquilex Holdings LLCd274602dex995.htm
EX-99.4 - EX-99.4 - Aquilex Holdings LLCd274602dex994.htm

Exhibit 99.1

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET INFORMATION

The unaudited pro forma consolidated financial balance sheet presented in the following table is derived from and should be read in conjunction with the September 30, 2011 historical balance sheet of the Offeror contained in the Offeror’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2011.

 

     As of September 30, 2011  
     Historical     Pro Forma
Adjustments		     New
Capitalization
Pro Forma
Adjustments		     Total
Pro
Forma		  

Assets

         

Current assets

         

Cash

    $ 24,713      $ 3,600 (2)    $ 15,000 (2)    $ 43,313   

Accounts receivable, net

      86,746        —          —          86,746   

Inventories

      13,129        —          —          13,129   

Cost in excess of billings

      6,927        —          —          6,927   

Deferred tax asset

      2,378        (2,378 )(1)      —          —     

Income tax receivable

      3,324        (3,324 )(1)      —          —     

Prepaid expenses

      2,391        —          —          2,391   

Deferred financing costs, net

      1,828        (1,828 )(4)      —          —     

Other current assets

      904        —          —          904   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total current assets

      142,340        (3,930 )      15,000        153,410   

Property and equipment, net

      69,644        25,100 (6)      —          94,744   

Goodwill

      70,163        (221,417 )(7)      172,938 (7)      21,684   

Other intangible assets, net

      117,707        2,000 (5)      —          119,707   

Deferred financing costs, net

      —          489 (4)      4,400 (8)      4,889   

Other assets

      638        —          —          638   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

    $ 400,492      $ (197,758 )    $ 192,338      $ 395,072   
  

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities and Equity

         

Current liabilities

         

Accounts payable

    $ 16,341      $ —        $ —        $ 16,341   

Accrued liabilities

      42,422        —          —          42,422   

Income tax payable

      1,434        (1,434 )(1)      5,100 (3)      5,100   

Billings in excess of cost

      3,005        —          —          3,005   

Interest payable

      7,300        —          —          7,300   

Current portion of long-term debt, net of OID

      422,097        (420,769 )(2)      —          1,328   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total current liabilities

      492,599        (422,203 )      5,100        75,496   

Long-term debt, net of OID and current portion

      —          131,435 (2)        131,435   

Income tax payable

      2,424        (2,424 )(1)      —          —     

Other notes payable

      1,802        —          —          1,802   

Deferred income tax liabilities

      8,684        (8,684 )(1)      —          —     
  

 

 

    

 

 

    

 

 

    

 

 

  

Total liabilities

      505,509        (301,876 )      5,100        208,733   
  

 

 

    

 

 

    

 

 

    

 

 

  

Equity

         

Member’s capital

      400,375        (400,375 )(2)      187,238 (2)      187,238   

Accumulated deficit

      (503,978 )      503,978 (2)      —          —     

Accumulated other comprehensive loss

      (515 )      515 (2)      —          —     
     —          —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

  

Total member’s (deficit) equity

      (104,118 )      104,118        187,238        187,238   

Noncontrolling interest

      (899 )      —          —          (899 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total (deficit) equity

      (105,017 )      104,118        187,238        186,339   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total liabilities and equity

    $ 400,492      $ (197,758 )    $ 192,338      $ 395,072   
  

 

 

    

 

 

    

 

 

    

 

 

  

 

 

(1) Represents the elimination of the historical deferred tax assets and liability accounts as well as income tax receivable and payable accounts. It is anticipated that both the out-of-court Restructuring Transaction or the Prepackaged Plan would be treated as a taxable asset restructuring for tax purposes. Under this treatment, it is expected that there will be no net deferred tax amount at the outset of the transaction since the book and tax equity values would be the same. Such amounts may be revised materiality post-closing based on a more detailed valuation of certain assets.
(2)

Represents the elimination of existing member’s equity (deficit) based on the cancellation of the Offeror’s current outstanding equity in connection with the exchange of $225,000,000 principal amount of Aquilex Senior Notes for New Common Units, proceeds from the $80,000,000 cash Rights Offering, a full paydown of the existing revolver of $36,000,000 and an additional paydown of the Existing Term Loan Facility in the amount of $29,000,000, and exit financing and professional fees of $11,400,000 under the Existing First

  Lien Credit Agreement. Subsequent to the equitizaton of the Aquilex Senior Notes and the pay down of the Existing First Lien Credit Agreement, the outstanding principal amount of the Existing Term Loan will be $132,762,500. In addition, reflects proceeds from, and equitization of, the $15,000,000 Existing Second Lien Loan.
(3) Represents tax related payables incurred in the out-of-court Restructuring or the Prepackaged Plan.
(4) Represents the writeoff of the remaining deferred financing costs balances related to the Existing First Lien Credit Agreement and the Aquilex Senior Notes that were converted to equity. The portion attributable to the New Credit Agreement is reclassified to long-term.
(5) Represents a $2,000,000 step up of the intangible asset amount for the SRO Services reporting unit. At September 30, 2011, the SRO Services technology was valued at $7,300,000 and had a pre-adjusted net book value of $5,300,000.
(6) The out-of-court Restructuring Transaction will be accounted for as a purchase in accordance with ASC Topic 805, Business Combinations, pursuant to which the purchase price will be allocated to the assets acquired and liabilities assumed based on their fair values. Property and equipment is adjusted to fair value based upon a recent appraisal relating to existing long-lived assets. Valuations will be made following completion of the out-of-court Restructuring Transaction (including an appraisal of intangible and potentially other assets), and the final allocation of purchase price could differ materially from the pro forma allocation reflected herein. Represents the $25,100,000 million step up of property and equipment on a consolidated basis.
(7) Represents the elimination of historical goodwill and the recording of the estimated excess purchase price over the estimated net asset value acquired.
(8) Represents deferred financing costs in conjunction with the New Credit Agreement.