8-KMaterial AgreementsFinancial EventsExhibits & Filings

Cencora, Inc. 8-K Report, Material Agreement (Feb 9, 2015)

Filed February 9, 2015For Securities:COR

Summary

Cencora, Inc. (formerly AmerisourceBergen Corporation) filed an 8-K on February 9, 2015, primarily detailing the entry into a new $1.0 billion senior unsecured term loan credit agreement. This new financing is directly linked to the previously announced acquisition of MWI Veterinary Supply, Inc. The proceeds from this term loan will be used to fund a portion of the cash consideration for the MWI acquisition, as well as related fees and expenses. The loan has a five-year maturity and includes quarterly principal repayments, with interest rates tied to the company's public debt ratings. The agreement also contains standard covenants related to financial leverage and operational limitations. In addition to the new term loan, Cencora amended its existing Revolving Credit Agreement. The key modification allows for an addback to the calculation of Consolidated EBITDA for non-cash expenses and charges related to certain derivative transactions. This amendment could provide greater financial flexibility under the revolving credit facility. Investors should note that the funding of the term loan is contingent upon the successful completion of the MWI acquisition.

Key Highlights

  • 1Cencora entered into a $1.0 billion senior unsecured term loan agreement on February 9, 2015, to finance the acquisition of MWI Veterinary Supply, Inc.
  • 2The new term loan has a maturity of five years from the closing date of the MWI transaction.
  • 3Proceeds from the term loan will be used for the cash portion of the MWI acquisition consideration and associated transaction costs.
  • 4The term loan will be subject to quarterly principal repayments and interest rates that vary based on the company's credit ratings.
  • 5The company amended its Revolving Credit Agreement to allow for EBITDA addbacks related to non-cash derivative expenses, potentially increasing financial flexibility.
  • 6The closing and funding of the term loan are conditional upon the successful completion of the MWI acquisition.
  • 7The filing also notes that commitments under a previously announced bridge loan facility have been reduced by the amount of the new term loan.

Frequently Asked Questions

The primary purpose of the $1.0 billion senior unsecured term loan is to finance a portion of the cash consideration required for Cencora's previously announced acquisition of MWI Veterinary Supply, Inc., as well as to cover associated transaction fees and expenses.

The new term loan matures five years from the date it is drawn, which is referred to as the 'Closing Date' of the MWI acquisition.

The amendment modifies the calculation of the leverage ratio in the Revolving Credit Agreement by allowing an addback to Consolidated EBITDA for non-cash expenses and charges related to certain derivative transactions. This could potentially improve the company's reported leverage ratios, providing greater flexibility under the revolving credit facility.

No, the funding of the term loan is subject to customary conditions, most notably the consummation of the MWI Veterinary Supply, Inc. acquisition. If the acquisition does not close, the term loan may not be funded.