8-KMaterial AgreementsExhibits & Filings

AGILENT TECHNOLOGIES, INC. 8-K Report, Material Agreement (Aug 24, 2009)

Filed August 24, 2009For Securities:A

Summary

Agilent Technologies, Inc. has filed a Form 8-K to announce a material definitive agreement, specifically the Fourth Amendment to its Five Year Credit Agreement, dated August 17, 2009. This amendment is primarily in preparation for the pending merger with Varian, Inc. The key changes involve how certain incurred indebtedness will be treated under the credit agreement's leverage ratio covenant during the acquisition period. Specifically, up to $1 billion in new debt will not be counted towards leverage ratios until a deferred date, providing Agilent with financial flexibility during the integration process. Furthermore, the amendment adjusts limits on specific types of financing. The permitted amount of certain structured financing is increased by $500 million to $2 billion, while the permissible amount of secured indebtedness is reduced from $300 million to $75 million. These adjustments are designed to accommodate the financial requirements and potential risks associated with the Varian acquisition, while maintaining a manageable debt structure.

Key Highlights

  • 1Agilent Technologies entered into a Fourth Amendment to its Five Year Credit Agreement on August 17, 2009.
  • 2The amendment provides financial flexibility related to the pending acquisition of Varian, Inc.
  • 3Up to $1 billion of new indebtedness incurred during the acquisition period will be temporarily excluded from leverage ratio calculations.
  • 4The exclusion period extends until at least August 1, 2010, or a later date depending on the merger's closing or termination.
  • 5The permitted amount for certain structured financing was increased by $500 million to $2 billion.
  • 6The permitted amount for certain secured indebtedness was reduced from $300 million to $75 million.

Frequently Asked Questions

The main purpose of this filing is to disclose a material amendment to Agilent's existing credit agreement. This amendment is specifically designed to facilitate the company's pending merger with Varian, Inc. by adjusting how certain debt is treated for financial covenant purposes during the acquisition period.

The amendment allows Agilent to incur up to $1 billion in new debt during the 'Acquisition Period' (leading up to the Varian merger closing) without it immediately counting towards its leverage ratio covenant. This deferred treatment provides the company with more flexibility in managing its debt structure as it integrates Varian.

Yes, the amendment modifies the limits on specific types of debt. The maximum amount for certain structured financing increased by $500 million to $2 billion. Conversely, the limit for certain secured indebtedness was reduced significantly, from $300 million to $75 million during the acquisition period.

The 'Acquisition Period' is defined as the time from August 17, 2009, through the closing of the pending merger with Varian, Inc. The exclusion of the $1 billion indebtedness from leverage ratio calculations will last until the later of August 1, 2010, or the first day of the month following the ninth full calendar month after the merger closes. If the merger agreement is terminated before August 1, 2010, the exclusion date will be the termination date.