Cleaver-Brooks Announces Commencement of Tender Offer and Consent Solicitation for 12.25% Senior Secured Notes Due 2016

THOMASVILLE, Ga.--()--Cleaver-Brooks, Inc. ("Cleaver-Brooks") announced today that it is launching a tender offer and consent solicitation for its outstanding 12.25% Senior Secured Notes due 2016 (the "Notes").

Cleaver-Brooks is offering to purchase all of the outstanding Notes (the "Tender Offer"). Cleaver-Brooks also is soliciting consents (the "Solicitation") to certain proposed amendments to the indenture governing the Notes. The proposed amendments would (i) eliminate or modify substantially all of the restrictive covenants, certain events of default and certain other provisions contained in the indenture governing the Notes, (ii) shorten the minimum redemption notice period from 30 days to three days and (iii) release the liens on the assets securing the Notes. Holders who tender their Notes will be required to consent to the proposed amendments, and holders who consent to the proposed amendments will be required to tender their Notes.

The Tender Offer and the Solicitation are being made in connection with a Stock Purchase Agreement dated as of November 13, 2012 (the “Stock Purchase Agreement”) under which an affiliate of investment funds managed by Harbour Group Industries, Inc. will acquire from Wellspring Capital Partners IV, L.P. and certain other security holders all of the outstanding equity interests of Cleaver-Brooks. The purpose of the Tender Offer and the Solicitation is to acquire all of the outstanding Notes and obtain the requisite consents in furtherance of the transactions contemplated by the Stock Purchase Agreement.

The Tender Offer and Solicitation are being made by Cleaver-Brooks pursuant to an offer to purchase and consent solicitation statement and a related letter of transmittal, each dated as of November 26, 2012. The Tender Offer will expire at 11:59 p.m., New York City time, on December 21, 2012, unless extended (the "Expiration Date").

Payment for the Notes validly tendered (and not validly withdrawn) and the consents validly delivered (and not validly revoked) will be made on a date promptly following the Expiration Date (the "Final Payment Date"). A consent payment will be paid to holders who tender Notes and deliver consents on or prior to 5:00 p.m., New York City time, on December 7, 2012 (the "Consent Date"), unless extended. The Tender Offer contemplates an early settlement option, so that holders whose Notes are validly tendered on or prior to the Consent Date and accepted for purchase could receive payment as early as December 19, 2012 (as may be extended by Cleaver-Brooks at its sole discretion, the "Early Payment Date") if the conditions to the Tender Offer and Solicitation have been fulfilled or waived by that time.

The total consideration, as more fully described in the Offer to Purchase, for each $1,000 principal amount of Notes to be paid for each validly tendered Note will be the redemption price of the Notes plus scheduled interest to May 1, 2013 (the first optional redemption date with respect to the Notes) discounted based on a yield to May 1, 2013 that is equal to the sum of (i) the yield on the 0.625% U.S. Treasury note due April 30, 2013, and (ii) a fixed spread of 50 basis points, minus accrued and unpaid interest from the last interest payment date to, but not including, the Early Payment Date. The purchase price for the Notes will be set at 12:00 p.m., New York City time, on December 10, 2012, unless the Consent Date is extended.

The total consideration includes a consent payment of $30 per $1,000 of principal amount of Notes and will be paid on the Early Payment Date or Final Payment Date, as applicable, to holders who tender their Notes and provide their consents to the proposed amendments on or prior to the Consent Date. Notes tendered and consents delivered on or prior to the Consent Date may not be withdrawn or revoked after that time. Holders of Notes tendered after the Consent Date will receive the tender offer consideration which is equal to the total consideration minus the consent payment. In addition, accrued and unpaid interest will be paid on the tendered Notes up to but not including the Early Payment Date or Final Payment Date, as applicable.

The Tender Offer and the Solicitation are contingent upon, among other things, (i) the successful completion of the acquisition contemplated by the Stock Purchase Agreement, (ii) the tender of and consents with respect to at least a majority of the outstanding principal amount of the Notes, and (iii) the execution and delivery of a supplemental indenture by Cleaver-Brooks, the guarantors and trustee under the indenture giving effect to the Amendments. Cleaver-Brooks may amend, extend or terminate the Tender Offer and Solicitation at its sole discretion.

This press release does not constitute an offer to purchase any Notes or a solicitation of consents. Any offer to purchase the Notes or solicitation of consents will be made by means of an offer to purchase and consent solicitation statement and related letter of transmittal. No offer, solicitation or purchase will be made in any jurisdiction in which such an offer, solicitation or purchase would be unlawful.

Cleaver-Brooks has engaged RBC Capital Markets, LLC to act as dealer manager and solicitation agent for the Tender Offer and the Solicitation and Global Bondholder Services to act as depositary and information agent for the Tender Offer. Persons with questions regarding the Tender Offer or Solicitation should contact RBC Capital Markets, LLC at (212) 618-7822 or (877) 381-2099 (toll-free). Requests for documents may be directed to Global Bondholder Services at (866)-470-4300.

Cleaver-Brooks provides boiler room solutions to customers in a wide range of industries and end markets in over 58 countries around the world. The company’s main products include firetube packaged boilers, industrial watertube boilers, modular boilers, commercial watertube packaged boilers, waste heat recovery systems, burners, boiler room accessories, and aftermarket parts associated with these products. For more information, access Cleaver-Brooks website at http://www.cleaver-brooks.com.

This press release contains forward-looking statements. These statements relate to future events or the future performance of Cleaver-Brooks. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek,” “anticipate,” “plan,” “continue,” “estimate,” “expect,” “may,” “will,” “project,” “predict,” “potential,” “targeting,” “intend,” “could,” “might,” “should,” “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Cleaver-Brooks believes that the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release. Other than as required by applicable laws, Cleaver-Brooks does not intend, and does not assume any obligation, to update these forward-looking statements.

Contacts

Cleaver-Brooks, Inc.
Marc Szczerba, EVP/CFO, 229-227-5307
Fax: 229-226-3027
Investor_Relations@cleaverbrooks.com

Release Summary

Cleaver-Brooks Announces Commencement of Tender Offer and Consent Solicitation for 12.25% Senior Secured Notes Due 2016

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Contacts

Cleaver-Brooks, Inc.
Marc Szczerba, EVP/CFO, 229-227-5307
Fax: 229-226-3027
Investor_Relations@cleaverbrooks.com