KLX Inc. Commences Consent Solicitation to Amend 5.875% Senior Notes Due 2022

WELLINGTON, Fla., May 30, 2018 (GLOBE NEWSWIRE) -- KLX Inc. (“KLX” or the “Company”) (NASDAQ:KLXI),  announced today that it has commenced the solicitation of consents (the “Consent Solicitation”) to amend (the “Proposed Amendments”) the indenture (the “Indenture”) governing the Company’s 5.875% Senior Notes due 2022 (the “Notes”).  The Consent Solicitation is being made in accordance with the terms and subject to the conditions stated in a Consent Solicitation Statement, dated May 30, 2018 (the “Consent Solicitation Statement”) to holders of Notes as of the 5:00 p.m., New York City time, on May 30, 2018 (the “Record Date”). As of the date of the Consent Solicitation Statement, the aggregate outstanding principal amount of the Notes was $1,200,000,000.

The Consent Solicitation is scheduled to expire at 5:00 p.m., New York City time, on June 5, 2018, unless extended or earlier terminated (the “Expiration Date”). Holders of Notes as of the Record Date who validly deliver consents to the Proposed Amendments in the manner described in the consent Solicitation Statement will be eligible to receive a consent payment equal to $1.25 per $1,000 principal amount of Notes (the “Consent Payment”) for which consents have been validly delivered prior to the Expiration Date (and not validly revoked). Holders as of the Record Date providing consents after the Expiration Date will not receive the Consent Payment. The Consent Payment will be paid to consenting holders promptly after the Expiration Date, as further described in the Consent Solicitation Statement.

Pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated April 30, 2018, by and among The Boeing Company, a Delaware corporation (“Boeing”), Kelly Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Boeing (“Merger Sub”) and KLX, at the effective date of the Merger, KLX will merge with and into Merger Sub, with KLX as the surviving entity (the “Merger”).

Prior to the consummation of the Merger, KLX intends to spin off to its shareholders KLX Energy Services Holdings, Inc. ("KLX Energy"), a to-be-formed wholly owned subsidiary of KLX and the eventual parent company of KLX's Energy Services Group (the “Spin-Off”). The Company is seeking consents to the Proposed Amendments in consideration of the payment by the Company of the Consent Payment, in order to permit the consummation of the Spin-Off by the Company prior to the consummation of the Company’s merger with Boeing. The Notes are currently redeemable at the option of the Company. If the Proposed Amendments are approved and the Spin-Off is consummated, the Company expects to redeem the Notes concurrent with the Merger.  If the Proposed Amendments are not approved, or if the Company otherwise elects to delay consummation of the Spin-Off for any reason, the Company expects that the Spin-Off will be consummated simultaneously with the consummation of the Merger and the Notes would be redeemed.

The consummation of the Consent Solicitation is subject to a number of conditions that are set forth in the Consent Solicitation Statement, including, without limitation, (i) having received consent from Holders representing a majority of the outstanding aggregate principal amount of the Notes (the “Requisite Consents”), (ii) the absence of any law or regulation, and the absence of any injunction or action or other proceeding (pending or threatened) that (in the case of any action or proceeding if adversely determined) would make unlawful or invalid or enjoin the implementation of the Proposed Amendments or the payment of the Consent Payment or that would question the legality or validity thereof and (iii) an amendment to the terms of the Company’s senior secured credit agreement to permit the Proposed Amendments to the Notes.

The Proposed Amendments will become effective and operative with respect to the Notes upon receipt of the Requisite Consents and the execution of the Supplemental Indenture (the “Effective Time”), which may occur prior to the Expiration Date if the Requisite Consents are received before then. Upon receipt of the Requisite Consents, the Company and the guarantors party to the Indenture intend to execute a Supplemental Indenture to the Indenture governing the Notes, and will deliver the Supplemental Indenture to the trustee for execution in accordance with the Indenture. No consents may be revoked after the Effective Time. The Proposed Amendments, following receipt of the Requisite Consents, will become effective and operative upon execution of the Supplemental Indenture. Upon the Proposed Amendments becoming effective and operative, all Holders of the Notes would be bound by the terms thereof, even if they did not deliver consents to the Proposed Amendments.  The Supplemental Indenture will become inoperative if the Consent Payment is not made promptly after the Expiration Date in accordance with the terms of the Consent Solicitation Statement.

Requests for copies of the Consent Solicitation Statement and other related materials should be directed to Ipreo LLC, the Information and Tabulation Agent (the “Information and Tabulation Agent”) for the Consent Solicitation, at (212) 849-3880 (collect) or (888) 593-9546 (toll-free).

The Company’s obligations to pay the Consent Payment are set forth solely in the Consent Solicitation Statement. This press release and the Consent Solicitation Statement shall not constitute an offer to purchase nor a solicitation of an offer to sell any Notes or other securities. The Consent Solicitation is being made only by, and pursuant to the terms of, the Consent Solicitation Statement, and the information in this news release is qualified by reference to the Consent Solicitation Statement. No recommendation is made, or has been authorized to be made, as to whether or not holders of Notes should consent to the adoption of the Proposed Amendments pursuant to the Consent Solicitation. Each holder of Notes must make its own decision as to whether to give its consent to the Proposed Amendments. The Consent Solicitation is not being made in any jurisdiction in which the making thereof would not be in compliance with the applicable laws of such jurisdiction. In any jurisdiction in which the Consent Solicitation is required to be made by a licensed broker or dealer, the Consent Solicitation will be deemed to be made on behalf of the Company by one or more registered brokers or dealers licensed under the laws of such jurisdiction. None of the Company, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC or the Information and Tabulation Agent makes any recommendation in connection with the Consent Solicitation. Subject to applicable law, the Company may amend, extend or terminate the Consent Solicitation.

About KLX Inc.

KLX Inc., through its two operating segments, provides mission critical products and complex logistical solutions to support its customers’ high value assets. KLX serves its customers in demanding environments that face high cost of downtime and require dependable, high quality just-in-time customer support. The Aerospace Solutions Group is a leading distributor and value added service provider of aerospace fasteners and consumables offering the broadest range of aerospace hardware and consumables and inventory management services worldwide. The Energy Services Group provides vital services and products to oil and gas exploration and production companies on an episodic, 24/7 basis.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements, including those regarding the timing and consummation of the transactions described herein, involve risks and uncertainties. The Company’s actual experience and results may differ materially from the experience and results anticipated in such statements. Factors that might cause such a difference include those discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”), which include its Annual Report on Form 10-K and Current Reports on Form 8-K. For more information, see the section entitled “Forward-Looking Statements” contained in the Company’s Annual Report on Form 10-K and in other filings. The forward-looking statements included in this news release are made only as of the date of this news release and, except as required by federal securities laws and rules and regulations of the SEC, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:
Michael Perlman
Director, Investor Relations
KLX Inc.
(561) 791-5435