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Subsequent Events
6 Months Ended
Jun. 30, 2012
Subsequent Events [Abstract]  
Subsequent Events

Note 12. Subsequent Events

On July 2, 2012, the Company and its wholly owned subsidiary, The Corporate Executive Board Company (UK) Limited (“CEB UK”) entered into a sale and purchase agreement (the “Sale and Purchase Agreement”), pursuant to which CEB UK would acquire the entire issued share capital of the SHL Group from funds managed by HG Capital (“Hg Capital”) and Veronis Suhler Stevenson (“VSS”), as well as shares held by members of management and other investors (together the “Sellers”) for an enterprise value of $660 million (the “Gross Purchase Price”). The Gross Purchase Price is subject to adjustment as provided in the Sale and Purchase Agreement.

In addition, on July 2, 2012, the Company, together with certain of its subsidiaries acting as guarantors, entered into a senior secured credit agreement, with Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer, the lenders party thereto from time to time, and Barclays Bank, PLC, as Syndication Agent in connection with the execution of the Sale and Purchase Agreement, which was amended on July 18, 2012, and again on August 1, 2012 (as amended, the “Credit Agreement”). The Credit Agreement provides for (i) a term loan A in an aggregate principal amount of $275 million (the “Term A Loan Facility”), (ii) a term loan B in an aggregate principal amount of $250 million (the “Term B Loan Facility” and together with the Term A Facility, the “Term Facilities”) and (iii) a $100 million revolving credit facility (the “Revolving Credit Facility”, and together with the Term A Loan Facility and the Term B Loan Facility, the “Senior Secured Credit Facilities”).

 

On August 2, 2012, the Company and CEB UK completed the acquisition in accordance with the terms and conditions of the Sale and Purchase Agreement. In connection with the closing of the acquisition, the full amounts of the Term A Loan Facility and the Term B Loan Facility were drawn with an additional $30 million drawn under the Revolving Credit Facility. Along with the net proceeds of the Senior Secured Credit Facilities, approximately $121 million of the Company’s available cash on hand was used to fund the Gross Purchase Price. A portion of the Gross Purchase Price was used to repay the SHL Group’s outstanding bank debt and the balance (after reduction for certain expenses and costs set forth in the Sale and Purchase Agreement and the assumption of certain liabilities of the SHL Group that were assumed in the acquisition) was paid to the Sellers in exchange for the shares they owned in the SHL Group and to repay outstanding loans made to the SHL Group by certain of the Sellers. Upon completion of the acquisition, the SHL Group became a wholly-owned indirect subsidiary of the Company.

In addition, approximately $6 million of availability under the Revolving Credit Facility was used to cover letters of credit that were issued to replace similar letters of credit previously issued under the credit agreement the Company entered on March 16, 2011 ( the “Prior Credit Facility”), which was terminated concurrently with the drawings under the Senior Secured Credit Facilities. Upon termination of the Prior Credit Facility, all of the commitments (including the previous letters of credit) under it were released.