8-K

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): February 3, 2014

ACCELLENT INC.

(Exact name of registrant as specified in its charter)

Maryland	333-130470	84-1507827
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

100 Fordham Road Wilmington, Massachusetts	01887
(Address of principal executive offices)	(Zip Code)

(978) 570-6900

(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 (see General Instruction A.2. below):

¨ 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))

Item 1.01 Entry into a Material Definitive Agreement.

On February 3, 2014, Accellent Inc., a Maryland corporation (the “Company”), Accellent Holdings Corp., a Delaware corporation (“Holdings”), Lake Region Medical Holdings, Inc., a Delaware corporation and an affiliate of the Company (“Buyer”), Lake Region Merger Sub, Inc., a Minnesota corporation and wholly owned direct subsidiary of the Company (“Merger Sub”), Lake Region Manufacturing, Inc. d/b/a Lake Region Medical, a Minnesota corporation (“Lake Region”), certain stockholders of Lake Region (the “Rollover Stockholders”), the stockholders of Holdings (the “Holdings Stockholders”) and Joseph F. Fleischhacker as Sellers’ Representative, entered into a Contribution and Merger Agreement (the “Merger Agreement”).

Pursuant to the terms of the Merger Agreement and subject to the conditions set forth therein, Merger Sub will merge with and into Lake Region (the “Merger”) and the Company will acquire all of the outstanding capital stock of Lake Region. Immediately prior to the Merger, the Rollover Stockholders will contribute shares of common stock of Lake Region with an aggregate value of $75,000,000 to Buyer in exchange for shares of common stock of the Buyer. Also immediately prior to the Merger, the Holdings Stockholders will contribute their shares of common stock of Holdings to Buyer in exchange for an equal number of shares of common stock of Buyer. Following these contributions, Buyer will pay the stockholders of Lake Region aggregate cash consideration of $315,000,000 in respect of the remaining outstanding shares, subject to adjustments in respect of outstanding indebtedness, cash, working capital and certain expenses of Lake Region.

After consummation of the Merger, Buyer and its subsidiaries, including the Company, will conduct business under the brand of “Lake Region Medical,” except that the Advanced Surgical unit of Buyer and its subsidiaries will conduct business under the brand of “Accellent.”

The Merger Agreement contains specified termination rights for the parties. If Lake Region terminates the agreement due to a material breach of Buyer, Holdings, the Company, or Merger Sub, or due to the failure of Buyer to consummate the Merger when all the conditions to the Merger Agreement are satisfied, then in each case, Buyer would be required to pay Lake Region a specified termination fee.

Completion of the Merger is subject to customary closing conditions, including: (i) the absence of legal constraints; (ii) approval of the Merger by antitrust authorities; (iii) accuracy of representations and warranties and compliance with covenants contained in the Merger Agreement; (iv) the absence of a material adverse effect; (v) approval by the stockholders of Lake Region; and (vi) entry by certain of the Rollover Stockholders into a confidentiality, non-competition and non-solicitation agreement.

Each of Lake Region, the Rollover Stockholders, Holdings, Buyer, the Company and the Holdings Stockholders has made customary representations and warranties in the Merger Agreement. Lake Region has agreed to various covenants and agreements, including, among other things, to conduct its business in the ordinary course of business during the period between the execution of the Merger Agreement and the closing of the Merger.

Item 2.02 Results of Operations and Financial Condition.

Accellent Inc. Preliminary Financial Results

In connection with the syndication of the debt financing referred to in Item 8.01 below, the Company is releasing certain preliminary financial results for the fourth quarter and full year ended December 31, 2013:

The Company expects that net sales for the fourth quarter of 2013 will approximate $137 million to $139 million, an increase of between 12.2% and 13.8% from $122.1 million in the fourth quarter of 2012. The Company expects that Adjusted EBITDA (a non-GAAP financial measure) in the fourth quarter of 2013 will increase between 21.1% and 30% to approximately $27.5 million to $29.5 million compared to Adjusted EBITDA of $22.7 million in the fourth quarter of 2012.

The Company expects net sales for the full year ended December 31, 2013 to be approximately $524 million to $526 million, an increase of between 5.1% and 5.5% from $498.6 million for the full year ended December 31, 2012. The Company expects Adjusted EBITDA for the full year ended December 31, 2013 will increase between 5.4% and 7.4% to $104 million to $106 million compared to Adjusted EBITDA of $98.7 million for the year ended December 31, 2012.

The financial data presented above is preliminary, based upon the Company’s estimates, and is subject to revision based upon its financial closing procedures and the completion of its financial statements, and is subject to audit. The Company’s actual results may be materially different from its estimates. In addition, these estimated results are not necessarily indicative of the Company’s results for the quarter, year or any future period. The preliminary financial data set forth above has been prepared by, and is the responsibility of, management of the Company. The Company and its management believe that the preliminary financial data relating to its business has been prepared on a reasonable basis, reflecting the best estimates and judgments. However, because this information is an estimate, it should not be relied on as necessarily indicative of future results.

Reconciliations of non-GAAP financial measures to GAAP financial measures follow:

ACCELLENT INC.

Reconciliation of Net (Loss) Income to EBITDA to Adjusted EBITDA

(in millions)

	Three Months Ended									Twelve Months Ended
				Preliminary									Preliminary
				and Unaudited									and Unaudited
	December 31, 2012			December 31, 2013						December 31, 2012			December 31, 2013
				Low			High						Low			High
RECONCILIATION OF NET (LOSS) INCOME TO EBITDA:
Net (loss) income	$	(3.3	)	$	(1.0	)	$	1.0		$	(22.4	)	$	(73.0	)	$	(71.0	)
Interest expense, net		17.2			17.0			17.0			69.1			69.0			69.0
Provision (benefit) for income taxes		(0.9	)		1.0			1.0			1.8			4.0			4.0
Depreciation and amortization		9.6			8.0			8.0			39.2			33.0			33.0
EBITDA (1)	$	22.6		$	25.0		$	27.0		$	87.7		$	33.0		$	35.0
Adjustments:
Impairment of goodwill		—			—			—			—			63.0			63.0
Stock-based compensation – employees		0.3			0.2			0.2			0.7			1.0			1.0
Stock-based compensation - non-employees		—			(0.3	)		(0.3	)		0.1			—			—
Employee severance and relocation		0.8			0.3			0.3			2.7			1.0			1.0
(Gain) loss from discontinued operations, net		(0.6	)		—			—			3.6			—			—
Restructuring expenses		0.3			0.4			0.4			2.9			—			—
Plant closure costs & other		0.2			0.5			0.5			0.7			2.0			2.0
Currency (gain) loss		(0.4	)		0.8			0.8			(0.3	)		2.0			2.0
(Gain) loss on disposal of assets		—			0.1			0.1			(0.3	)		1.0			1.0
Other taxes		(0.2	)		0.1			0.1			0.2			—			—
Management fees to stockholder		0.4			0.4			0.4			1.4			1.0			1.0
Realized gain on available for sale security		(0.7	)		—			—			(0.7	)		—			—
Adjusted EBITDA (1)	$	22.7		$	27.5		$	29.5		$	98.7		$	104.0		$	106.0

(1) EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity.

EBITDA represents net income (loss) before net interest expense, provision for income taxes and depreciation and amortization. Adjusted EBITDA represents EBITDA further adjusted to give effect to certain non-cash items and other adjustments, all of which are defined in the indentures governing our debt. The adjustments include adjustments for impairment of goodwill, restructuring charges and related plant closure costs, stock compensation charges, severance and relocation costs, results from discontinued operations, executive recruiting costs, currency gains and losses, gains and losses on derivative instruments, gains and losses resulting from the disposal of property and equipment, certain non-income based taxes, losses on debt extinguishment, management fees, and gains and losses from the sale of available for sale securities.

We believe that the presentation of EBITDA and Adjusted EBITDA is appropriate to provide as additional information for investors. We consider it an important supplemental measure of our performance and we believe that both are frequently used by securities analysts, investors and other interested parties in the evaluation of high yield issuers.

As provided in General Instruction B.2 of Form 8-K, the information furnished pursuant to this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure.

Press Release

On February 3, 2014, the Company and Lake Region issued a joint press release regarding the matters described in Item 1.01 of this Current Report on Form 8-K. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The Company is furnishing the information in this Item 7.01 to comply with Regulation FD. As provided in General Instruction B.2 of Form 8-K, the information furnished pursuant to this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 8.01 Other Events.

Debt Commitment Letter and Contemplated Refinancing

In connection with the Merger, the Company obtained commitments with respect to an aggregate of $1.13 billion of debt financing, sufficient to provide the full amount of financing required to consummate the Merger and to refinance the Company’s existing notes and credit facilities. These commitments will be documented in credit agreements to be negotiated with a syndicate of banks comprised of UBS AG, Stamford Branch, Goldman Sachs Bank USA, and KKR Capital Markets LLC. The commitment is subject to customary conditions.

In connection with the Merger and new financing, it is anticipated that the Company’s existing senior notes and senior subordinated notes will be repurchased or redeemed in full.

Forward Looking Statements

This document includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. All statements included herein, other than statements of historical fact, may constitute forward-looking statements. Such statements may include, but are not limited to, statements about the benefits of the proposed Merger of the Company with Lake Region, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Actual results may differ from those set forth in the forward-looking statements.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Joint press release issued by the Company and Lake Region on February 3, 2014.

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: February 3, 2014	ACCELLENT INC.
	By:	/s/ Richard E. Johnson
	Name:	Richard E. Johnson
	Title:	Interim Chief Financial Officer Principal Financial and Accounting Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Joint press release issued by the Company and Lake Region on February 3, 2014.

EX-99.1

Exhibit 99.1

Accellent to Acquire Lake Region Medical

Combining Strengths to Create a Leading Interventional Vascular Business

New Enterprise Will Be Called Lake Region Medical

Wilmington, MA/Minneapolis, MN (February 3, 2014)—Today, Accellent Inc., a leading provider of fully integrated outsourced manufacturing and engineering services to the medical device industry, and Lake Region Medical (“Lake Region”), a privately held, Original Development Manufacturer (ODM) of minimally invasive devices and delivery systems to the cardiology and endovascular markets, announced that they have entered into a definitive agreement whereby Accellent will acquire Lake Region Medical.

This acquisition supports Accellent’s strategic intent to grow its Cardio & Vascular business segment. “Over the last several years we have been positioning Accellent for growth. We have refined our strategic focus, improved our execution, optimized our operations and built a robust sales pipeline. Lake Region Medical is an excellent company with a strong quality reputation, product development capability involving clinical thought leaders and a deep medical device manufacturing history,” said Don Spence, Chairman and CEO of Accellent, who will lead the new enterprise. “Combining our companies will create a leading interventional vascular business with more scale, a broader product offering and deeper customer relationships.”

Jeremy Friedman, President and COO, Cardio & Vascular business for Accellent, agrees this is an instrumental step in the company’s overall market strategy. “Lake Region Medical is a leading designer and producer of guide wires and other wire-based products used for therapy delivery in minimally invasive procedures. This makes for a perfect fit with our product strategy and will allow us to offer our customers a strong portfolio of both guide wire and catheter products.”

Founded in 1947 by Joe Fleischhacker Sr., Lake Region Medical has a rich history of innovation that stems from Mr. Fleischhacker’s development of the process to manufacture pacing coils used with the first implantable pacemakers. Since then, the company has been owned and operated by the Fleischhacker family. Lake Region Medical’s CEO and Owner, Joe Fleischhacker Jr., stated: “We are pleased that we have found a company like Accellent who shares our values and strong focus on patient care yet brings different strengths to the table. This combination supports Lake Region’s product strategy to enhance our ODM competence in a wider range of products used for delivering therapy to patients. On behalf of Kate, Mark and the rest of the Fleischhacker family, we all look forward to the continued growth and success of Lake Region Medical,” he added.

Mark Fleischhacker, COO and owner of Lake Region Medical, added that the Accellent and Lake Region combination is the right strategic move: “Combining Lake Region’s strength in guide wires with Accellent’s strength in catheters will create a supplier that can offer interventional delivery, access and retrieval systems to complement our customers’ core therapeutic devices. In parallel, Accellent’s deep contract manufacturing expertise will provide an even stronger precision component offering to all of our medical device customers.”

“Culturally, the values of the two companies are strongly aligned. We believe this is a win-win for everyone: the Fleischhacker family, the Accellent and Lake Region Medical employees and most importantly our customers and the patients that they serve,” stated Katherine (Kate) Roehl, Chief Administrative Officer and owner of Lake Region Medical.

As part of the transaction, all of Lake Region Medical’s highly-experienced employees and state of the art facilities in Chaska, Minnesota, New Ross and Galway, Ireland and Shanghai, China will become part of the combined enterprise.

The merged business will be called Lake Region Medical and the company will continue to use the Accellent brand in marketing the Advanced Surgical business.

“Lake Region Medical has an unparalleled reputation within the cardiology and endovascular markets as well as the industry as a whole. We are pleased to be able to carry on this legacy under the Lake Region name as we grow the combined company,” said Don Spence.

The transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to close in the first quarter of 2014. Terms of the transaction were not disclosed.

UBS Investment Bank, Goldman, Sachs & Co. and Wells Fargo Securities served as financial advisors to Accellent, and Simpson Thacher & Bartlett LLP served as legal advisor. Piper Jaffray & Co. served as exclusive financial advisor to Lake Region Medical, and Faegre Baker Daniels LLP served as legal advisor.

About Accellent

Accellent Inc. provides fully integrated outsourced manufacturing and engineering services to the medical device industry, primarily in the cardiology, vascular and the advanced surgical markets. Accellent has broad capabilities in precision component fabrication, finished device assembly, complete supply chain management capabilities and engineering services. These capabilities enhance customers’ speed to market and return on investment by enabling them to refocus internal resources more efficiently. For more information, please visit www.accellent.com.

About Lake Region Medical

Lake Region Medical is a privately held, global leader in the development and manufacture of OEM devices, supplying the world’s largest medical device companies with minimally invasive delivery solutions. It is an industry expert in developing and marketing medical devices to meet unique clinical challenges for cardiovascular, stimulation therapy, neurovascular, and peripheral vascular applications, serving all major markets worldwide. Lake Region collaborates with top physicians and leading university research facilities on new product developments and has established development and distribution partnerships with industry leading medical device companies throughout the world. For more information, please visit www.lakeregionmedical.com.

Forward Looking Statements

This document includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. All statements included herein, other than statements of historical fact, may constitute forward-looking statements. Such statements may include, but are not limited to, statements about the benefits of the proposed Merger of

the Company with Lake Region, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Actual results may differ from those set forth in the forward-looking statements.

For more information contact:

Accellent   Media Contact: Laura Tringali 978-570-6900 laura.tringali@accellent.com Investor Contact: Richard Johnson 978-570-6900 richard.johnson@accellent.com Lake Region Medical   Media Contact: Jim Mellor (952) 361-2511 James.mellor@lakeregionmedical.com