Summary
Cardinal Health, Inc. (CAH) has entered into a new $1.0 billion Term Loan Credit Agreement with Bank of America, N.A., as Administrative Agent. This new facility is designed to provide funding for the cash consideration and related expenses associated with its previously announced acquisitions of The GI Alliance Holdings, LLC and Advanced Diabetes Supply Group. The credit agreement is set to terminate on November 10, 2025, unless certain conditions related to the consummation of these acquisitions are met earlier. Once drawn, the loans will mature three years after the borrowing date, subject to acceleration under specific circumstances.
Key Highlights
- 1Entered into a $1.0 billion Term Loan Credit Agreement to finance proposed acquisitions.
- 2Acquisition targets include The GI Alliance Holdings, LLC and Advanced Diabetes Supply Group.
- 3The credit facility has a termination date of November 10, 2025, tied to the closing of the merger agreements.
- 4Borrowed funds will mature three years after the borrowing date.
- 5Interest rates will be based on prevailing rates, benchmarked against Term SOFR, and influenced by Cardinal Health's credit ratings.
- 6The agreement includes customary covenants, including a financial covenant requiring a Consolidated Net Leverage Ratio not to exceed 3.75 to 1.00.
- 7Customary events of default are included, which could lead to loan acceleration and commitment termination.
Frequently Asked Questions
The primary purpose of the $1.0 billion Term Loan Credit Agreement is to provide Cardinal Health with the necessary funds to cover the cash consideration and associated transaction costs for its proposed acquisitions of The GI Alliance Holdings, LLC and Advanced Diabetes Supply Group.
Once loans are borrowed under the Credit Agreement, they will mature three years after the date of borrowing. However, certain conditions specified in the agreement could lead to an acceleration of this maturity date.
Cardinal Health is required to maintain a Consolidated Net Leverage Ratio of no greater than 3.75 to 1.00 as of the last day of any fiscal quarter, subject to the specific definitions and conditions outlined within the Credit Agreement.
The credit facility has a termination date of November 10, 2025. This date is the earliest of the termination dates related to the merger agreements for the two acquisitions, or the closing of both transactions without funding the loans.