New Enterprise Stone & Lime Co., Inc. Announces Cash Tender Offer and Consent Solicitation for its Outstanding 10.125% Senior Notes Due 2022

NEW ENTERPRISE, Pa.–(BUSINESS WIRE)–New Enterprise Stone & Lime Co., Inc. (“NESL” or the “Company”), a leading privately held, vertically integrated construction materials supplier in Pennsylvania and western New York, announced today that it has commenced a cash tender offer (the “Tender Offer”) to purchase any and all of its outstanding 10.125% Senior Notes due 2022 (the “2022 Notes”). There are $200.0 million aggregate principal amount of 2022 Notes outstanding. The Tender Offer is being made on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated June 30, 2020 (the “Offer to Purchase”) and the related Consent and Letter of Transmittal (together with the Offer to Purchase, the “Offer Documents”).

Concurrently with the Tender Offer, the Company is soliciting consents (the “Consent Solicitation”) from the holders of the 2022 Notes to amend the indenture governing the 2022 Notes (the “Indenture”) to, among other things, eliminate the principal restrictive covenants and certain events of default applicable to the 2022 Notes and to shorten the notice period required before an optional redemption of the 2022 Notes, such as the Redemption (as defined below), from not less than 30 days’ prior notice to not less than 3 business days’ prior notice (the “Proposed Amendments”). Delivery of consents to the Proposed Amendments to the Indenture by holders of at least a majority of the aggregate principal amount of the outstanding 2022 Notes is required for the adoption of the Proposed Amendments.

Information relating to the Tender Offer and the Consent Solicitation are set forth in the table below:

⁽¹⁾ Per $1,000 principal amount of the 2022 Notes validly tendered (and not validly withdrawn) and accepted for purchase in the Tender Offer.

⁽²⁾ Includes the Early Tender Premium (as defined below).

Holders of the 2022 Notes who validly tender (and do not validly withdraw) their 2022 Notes at or prior to 5:00 p.m. New York City time, on July 14, 2020 (the “Early Tender Time”), unless extended or earlier terminated, will be eligible to receive the “Total Consideration” of $1,043.88 (which consists of the “Tender Offer Consideration” of $993.88 plus the “Early Tender Premium” of $50.00) per $1,000 principal amount of such 2022 Notes accepted for purchase. Holders of the 2022 Notes who validly tender their 2022 Notes after the Early Tender Time, but at or prior to 11:59 p.m., New York City time, on July 28, 2020, (the “Expiration Time”), unless extended or earlier terminated, will only be eligible to receive the Tender Offer Consideration, which does not include the Early Tender Premium. In addition to the Total Consideration or the Tender Offer Consideration, as applicable, accrued and unpaid interest from the last interest payment date to, but not including, the Initial Settlement Date or the Final Settlement Date, as applicable, will be paid in cash on all 2022 Notes accepted for purchase.

Validly tendered 2022 Notes may be validly withdrawn at any time at or prior to 5:00 p.m. New York City time on July 14, 2020 (unless such deadline is extended) but not thereafter, except in certain limited circumstances where additional withdrawal rights are required by law. Holders may not validly revoke consents unless the related tendered 2022 Notes are validly withdrawn.

Subject to the terms and conditions described in the Offer Documents, payment of the Total Consideration to Holders who validly tendered (and did not validly withdraw) their 2022 Notes at or prior to the Early Tender Time will occur on the business day we select following the Early Tender Time (the “Initial Settlement Date”), and is expected to be the next business day after the Early Tender Time. Payment of the Tender Offer Consideration to Holders who validly tendered their 2022 Notes after the Early Tender Time, but at or prior to the Expiration Time, will occur promptly after the Expiration Time (the “Final Settlement Date”), and is expected to be the next business day after the Expiration Time. On the Initial Settlement Date, the Company currently intends to issue a notice of redemption for all of the 2022 Notes that remain outstanding after the Initial Settlement Date (the “Redemption”) in accordance with the terms of the Indenture, as modified by the Proposed Amendments, if then operative, and to satisfy and discharge its obligations under the Indenture. We expect the Redemption to occur on or about July 20, 2020 if the Proposed Amendments become operative on the Initial Settlement Date.

The Tender Offer is subject to the satisfaction or waiver of a number of conditions as set forth in the Offer to Purchase, including the consummation of a concurrent offering of debt securities on terms satisfactory to the Company and the Company’s receipt, in connection therewith, of aggregate proceeds therefrom of at least $200.0 million. The Company may amend, extend or terminate the Tender Offer or the Consent Solicitation in its sole discretion and subject to applicable law.

Goldman Sachs & Co. LLC is acting as the dealer manager and solicitation agent for the Tender Offer and the Consent Solicitation. The tender and information agent is Global Bondholder Services Corporation. Copies of the Offer Documents and other materials related to the Tender Offer and the Consent Solicitation are available at www.globalbondholder.com/NESL or by contacting the tender and information agent at (212) 430-3774 (banks and brokers) or fax at (212) 430-3775/3779 or email [email protected]. Questions regarding the Tender Offer and the Consent Solicitation should be directed to Goldman Sachs & Co. LLC at (800) 828-3182.

None of the Company, the dealer manager and solicitation agent, the tender and information agent, or the trustee for the 2022 Notes, or any of their respective affiliates, is making any recommendation as to whether Holders should tender any 2022 Notes in response to the Tender Offer or deliver their consents in response to the Consent Solicitation. Holders must make their own decision as to whether to tender any of their 2022 Notes and, if so, the principal amount of 2022 Notes to tender, and whether to deliver consents in response to the Consent Solicitation. This announcement is for informational purposes only and does not constitute an offer to purchase or the solicitation of an offer to sell any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. The Tender Offer and the Consent Solicitation are being made solely by means of the Offer Documents. This announcement also shall not constitute a notice of redemption with respect to the 2022 Notes. Any redemption shall be made solely by means of a redemption notice delivered pursuant to and in accordance with the Indenture. In those jurisdictions where the securities, blue sky or other laws require any tender offer to be made by a licensed broker or dealer, the Tender Offer will be deemed to be made on behalf of the Company by the dealer manager and solicitation agent or one or more registered brokers or dealers licensed under the laws of such jurisdiction.

About New Enterprise Stone & Lime Co., Inc.

New Enterprise Stone & Lime Co., Inc. is a leading privately held, vertically integrated construction materials supplier and heavy/highway construction contractor in Pennsylvania and western New York. Our core businesses include: construction materials (aggregate production (crushed stone, sand and gravel), hot mix asphalt production and ready mixed concrete production) and heavy/highway construction (heavy construction, hot mix asphalt paving and other site preparation services).

Forward-Looking Statements

Statements included herein may constitute forward looking statements. These statements are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in the Company’s reports. The Company undertakes no duty to update any forward looking statements made herein.

Contacts

New Enterprise Stone & Lime Co., Inc.

At the Company:
Paul I. Detwiler, III

President, Chief Executive Officer and Secretary

814-766-2211

Investor Relations Contact:
Joe Hassett, SVP

Gregory FCA

610-228-2110

[email protected]