8-KOther EventsExhibits & Filings

DANAHER CORP /DE/ 8-K Report, Corporate Update (Jun 7, 2016)

Filed June 7, 2016For Securities:DHR

Summary

Danaher Corporation (DHR) filed an 8-K on June 6, 2016, to report that its subsidiary, Fortive Corporation, has agreed to sell $2.3 billion in aggregate principal amount of senior notes across four different maturities. These notes, guaranteed by Danaher until Fortive's separation, are being issued in a private placement to qualified institutional buyers and non-U.S. persons. The proceeds from this significant debt offering are intended for payments to Danaher as consideration for asset contributions related to the planned separation of Fortive, as well as for general corporate purposes and expenses. This debt issuance is a crucial step in Danaher's strategic plan to separate its industrial and professional equipment segments into two independent companies, with Fortive being the entity comprising the industrial businesses. Investors should note the substantial capital being raised, which will facilitate the separation process and impact the capital structures of both Danaher (post-spin) and the new Fortive entity. The specific terms, including interest rates ranging from 1.800% to 4.300%, indicate Danaher's access to capital markets and its strategy for funding significant corporate actions.

Key Highlights

  • 1Fortive Corporation, a Danaher subsidiary, is issuing $2.3 billion in senior notes across four tranches with maturities in 2019, 2021, 2026, and 2046.
  • 2Danaher Corporation is providing a guarantee for these notes until the planned separation of Fortive.
  • 3The notes are being sold via a private placement under Rule 144A and Regulation S, indicating they are intended for sophisticated investors.
  • 4Proceeds from the note offering will be used by Fortive to make payments to Danaher as consideration for asset contributions related to the spin-off.
  • 5Interest rates on the notes range from 1.800% to 4.300% depending on the maturity.
  • 6The offering is expected to close on June 20, 2016, subject to customary conditions.
  • 7This debt issuance is a key component of Danaher's strategy to separate its businesses into two independent companies.

Frequently Asked Questions

The primary purpose of this debt issuance is to raise capital that Fortive will use to make payments to Danaher Corporation as consideration for the assets being contributed to Fortive in connection with the planned separation of the two companies. Funds will also be used for related fees, expenses, and general corporate purposes.

Danaher Corporation will provide a guarantee for the notes issued by Fortive until the planned separation of Fortive from Danaher is completed. This guarantee provides an additional layer of security for the noteholders during the transition period.

Fortive is issuing $2.3 billion in aggregate principal amount of senior notes across four maturities: $300 million of 1.800% senior notes due 2019, $750 million of 2.350% senior notes due 2021, $900 million of 3.150% senior notes due 2026, and $350 million of 4.300% senior notes due 2046. Interest will be paid semi-annually.

The notes are being sold in a private placement to qualified institutional buyers in the United States (pursuant to Rule 144A) and to non-U.S. persons outside the United States (pursuant to Regulation S).