Summary
Becton, Dickinson and Company (BDX) has filed an 8-K report detailing significant financing and equity-related activities, primarily to support its pending acquisition of C. R. Bard, Inc. The company secured a $2.25 billion unsecured three-year term loan facility, with proceeds earmarked for the acquisition's cash consideration and related fees. Additionally, BDX established a $2.25 billion senior unsecured revolving credit facility that expires in May 2022, which can be expanded up to $2.75 billion. These facilities carry financial covenants related to EBITDA to interest expense and Debt to EBITDA ratios, which are standard for such agreements. Furthermore, BDX completed two significant equity offerings on May 16, 2017: a public offering of approximately 14 million shares of its common stock and an offering of 49.5 million depositary shares, each representing a 1/20th interest in its newly established 6.125% Mandatory Convertible Preferred Stock, Series A. The mandatory convertible preferred stock will automatically convert into common stock on May 1, 2020, subject to certain conditions and a volume-weighted average price mechanism. These financing and equity activities underscore BDX's strategic move to fund and complete the substantial acquisition of Bard, signaling a major step in expanding its business.
Key Highlights
- 1BDX entered into a $2.25 billion unsecured three-year term loan facility to finance a portion of the cash consideration for the acquisition of C. R. Bard, Inc.
- 2A new $2.25 billion senior unsecured revolving credit facility was established, expiring in May 2022, with an option to increase commitments to $2.75 billion, intended for general corporate purposes and potential Bard debt redemption.
- 3The term loan and revolving credit facilities contain financial covenants, including minimum EBITDA to interest expense ratios of 4.00:1.00 and maximum Debt to EBITDA ratios that will sequentially decrease over time.
- 4BDX completed a public offering of approximately 14 million shares of its common stock on May 16, 2017.
- 5BDX also completed an offering of 49.5 million depositary shares, representing interests in its 6.125% Mandatory Convertible Preferred Stock, Series A.
- 6The Mandatory Convertible Preferred Stock will automatically convert into common stock on May 1, 2020, based on a range determined by the average volume-weighted average price of BDX's common stock over a specific period prior to conversion.