Wabash Int’l Raises $35 Million from Lincolnshire

Wabash International Corp. (NYSE: WNC) has received a $35 million investment from Lincolnshire Management. Were Lincolnshire to exercise all the included warrants, the deal would give it a 44.2% ownership position. Wabash is a Lafayette, Ind.-based maker of semi-trailers for the North American market.

PRESS RELEASE
Wabash National Corporation (NYSE: WNC) today announced that it has entered into a securities purchase agreement with Trailer Investments, LLC, an entity formed for this purpose by Lincolnshire Equity Fund III, L.P., a private equity investment fund managed by Lincolnshire Management, Inc., pursuant to which Trailer Investments will invest $35 million in the Company.

Pursuant to the terms of the securities purchase agreement, Trailer Investments will purchase $20,000,000 of Series E redeemable preferred stock comprised of 20,000 shares of Series E redeemable preferred stock at a price per share of $1,000, $5,000,000 of Series F redeemable preferred stock comprised of 5,000 shares of Series F redeemable preferred stock at a price per share of $1,000, and $10,000,000 of Series G redeemable preferred stock comprised of 10,000 shares of Series G redeemable preferred stock at a price per share of $1,000. The dividend rates for the Series E redeemable preferred stock, Series F redeemable preferred stock and Series G redeemable preferred stock are 15% per annum, 16% per annum and 18% per annum, respectively. The dividends are payable quarterly and will be increased by 0.5% every quarter if the respective class of redeemable preferred stock is still outstanding after the 5 year anniversary of the closing of the transaction. During the first two years, dividends may be accrued at the election of the Company.

In addition to the preferred stock, pursuant to the securities purchase agreement the Company will issue to Trailer Investments a warrant that is immediately exercisable at $0.01 per share for a number of newly issued shares of common stock representing 44.21% of the issued and outstanding common stock of the Company after giving effect to the issuance of the shares underlying the warrant, subject to upward adjustment to maintain that percentage if currently outstanding options are exercised and dilution protection for certain new issuances of shares of common stock, options, awards and other convertible instruments. The number of shares of common stock subject to the Warrant is also subject to upward adjustment to an amount equivalent to 49.99% of the issued and outstanding common stock of the Company on the original issuance date after giving effect to the issuance of the shares underlying the warrant in specified circumstances where the Company loses its ability to utilize its net operating loss carryforwards, including as a result of a stockholder of the Company acquiring greater than 5% of the outstanding common stock of the Company. The warrant is an integral part of the financing and is a condition to Trailer Investment’s willingness to enter into the securities purchase agreement.

Upon consummation of the investment contemplated by the securities purchase agreement, Trailer Investments will have the right to designate five out of twelve members to the Company’s board of directors. Trailer Investments will also have the following rights: rights to information delivery and access to information and management of the Company; veto rights over certain significant matters of the Company’s operations and business, subject to certain limitations and thresholds (including payments of dividends, issuance of securities of the Company, incurrence of indebtedness, liquidation and sale of assets, changes of the size of the Company’s board of directors, amendments of organizational documents of the Company and its subsidiaries and certain other material actions by the Company); right of first refusal to participate in any future private financings subject to compliance with NYSE Shareholder Approval Policy; and certain other customary rights granted to investors in similar transactions.

“This capital infusion will fortify our balance sheet, allowing us to put in place a capital structure that meets the needs of the Company during this economic downturn, including to obtain needed accommodations under our existing credit agreement,” said Wabash National Corporation President and CEO Dick Giromini. “Having conducted a thorough process to evaluate strategic alternatives, we believe that this transaction is a necessary and effective step to protect the interests of our existing stockholders, and we look forward to working with Lincolnshire Management in the future.”

Michael J. Lyons, Senior Managing Director of Lincolnshire Management, said, “Wabash’s market leading position and solid product line present an exciting investment opportunity for us. We are pleased to be partnering with this caliber of management team and look forward to working together and building upon Wabash’s unique franchise.”

In addition to the securities purchase agreement, the Company and certain of its subsidiaries have entered into an Amended and Restated Loan and Security Agreement, which amends and restates the Company’s current revolving credit facility. The amendment and restatement will be effective upon the consummation of the investment contemplated by the securities purchase agreement and satisfaction of other closing conditions. The revolving credit facility, as amended, will provide for borrowings of up to $100 million, subject to a borrowing base and applicable reserves. Upon the revolving credit facility becoming effective, as amended, the lenders have agreed to waive specified defaults previously incurred by the Company.

The consummation of the investment contemplated by the securities purchase agreement is subject to, among others, the following conditions: (i) the effectiveness of the amendment and restatement of the Company’s revolving credit facility described above; (ii) compliance with the notice provisions under the exception to the NYSE Shareholder Approval Policy, as described below; (iii) the absence of any judgment, writ, order, injunction, award or decree enjoining or preventing the consummation of the investment; and (iv) the satisfaction of customary closing conditions.

The issuance of the warrant in connection with the investment would normally require approval of the Company’s shareholders in accordance with the NYSE Shareholder Approval Policy. The board of directors of the Company has unanimously determined that the delay necessary in securing shareholder approval prior to the issuance of the warrant to Trailer Investments would seriously jeopardize the financial viability of the Company. In reaching this conclusion, the board of directors considered various factors, including factors specific to the Company and the extraordinary and highly uncertain economic and financial environment in the trailer industry. The audit committee of the board of directors, pursuant to an exception provided in the NYSE Shareholder Approval Policy for such a situation, expressly approved the Company’s omission to seek the shareholder approval that would otherwise have been required under that policy. The NYSE has accepted the Company’s application of the exception. The Company, in reliance on the exception, is mailing to all shareholders a letter notifying them of its intention to issue the warrant without seeking shareholder approval. The closing of the transactions contemplated by the securities purchase agreement will not occur until at least ten days after such notice is mailed. The transaction is expected to close as soon as practicable following the shareholder notice period described above.

Wabash National Corporation’s exclusive financial advisor for the transaction is BB&T Capital Markets, Inc. and its legal advisor is Hogan & Hartson LLP. Lincolnshire Management’s legal advisor is Kirkland & Ellis LLP.

About Wabash National Corporation
Headquartered in Lafayette, Ind., Wabash National® Corporation (NYSE: WNC) is one of the leading manufacturers of semi-trailers in North America. Established in 1985, the company specializes in the design and production of dry freight vans, refrigerated vans, flatbed trailers, drop deck trailers, dump trailers, truck bodies and intermodal equipment. Its innovative core products are sold under the DuraPlate®, ArcticLite®, FreightPro™ Eagle® and Benson™ brand names. The company operates two wholly owned subsidiaries; Transcraft ® Corporation, a manufacturer of flatbed, drop deck, dump trailers and truck bodies; and Wabash National Trailer Centers, trailer service centers and retail distributors of new and used trailers and aftermarket parts throughout the U.S.