8-KMaterial AgreementsFinancial EventsExhibits & Filings

DANAHER CORP /DE/ 8-K Report, Material Agreement (Oct 25, 2016)

Filed October 25, 2016For Securities:DHR

Summary

Danaher Corporation (DHR) announced on October 24, 2016, its entry into a new $3.0 billion 364-day revolving credit facility. This facility, with an expiration date of October 23, 2017, provides significant liquidity and flexibility for the company's financial operations. It can be used for general corporate purposes, including supporting its commercial paper programs, and importantly, to fund a portion of the pending acquisition of Cepheid. The credit facility includes provisions for converting outstanding loans into one-year term loans under certain conditions and is unsecured. Key terms include variable interest rates based on Eurodollar or Base Rate loans, an annual facility fee, and a covenant requiring a consolidated leverage ratio of 0.65 to 1.00 or less. The agreement also contains standard covenants restricting certain corporate actions, subject to exceptions, and defines change of control events as defaults.

Key Highlights

  • 1Danaher secured a new $3.0 billion 364-day revolving credit facility, expiring October 23, 2017.
  • 2The facility provides liquidity for general corporate purposes and commercial paper programs.
  • 3A portion of the proceeds will be used to fund the pending acquisition of Cepheid.
  • 4Borrowings bear variable interest rates (LIBOR + 81.5 bps for Eurodollar, or Prime + 0.50% for Base Rate).
  • 5An annual facility fee of 6.0 basis points on commitments is payable.
  • 6The credit facility requires maintaining a consolidated leverage ratio of 0.65 to 1.00 or less.
  • 7The obligations under the facility are unsecured.

Frequently Asked Questions

The primary purposes of the new $3.0 billion 364-day revolving credit facility are to provide liquidity support for Danaher's commercial paper programs and for general corporate purposes. Importantly, it is also intended to fund a portion of the purchase price for the pending acquisition of Cepheid.

The credit facility requires Danaher to maintain a consolidated leverage ratio of 0.65 to 1.00 or less. The agreement also includes customary negative covenants that restrict Danaher and its subsidiaries from actions such as incurring liens, disposing of assets, or entering into certain mergers or consolidations, subject to exceptions.

Borrowings under the credit facility bear variable interest rates. Eurodollar Rate Loans accrue interest at a rate equal to the London inter-bank offered rate plus 81.5 basis points. Base Rate Loans accrue interest at a rate equal to the highest of the Federal funds rate plus 0.50%, the Prime Lending Rate, or the Eurodollar Rate plus 1.0%. Additionally, Danaher is required to pay an annual facility fee of 6.0 basis points based on the aggregate commitments.

Yes, Danaher has the option to convert any loans outstanding on the Scheduled Termination Date (October 23, 2017) into term loans that are due and payable one year after the Scheduled Termination Date, provided certain conditions are met and a fee of 0.75% of the outstanding principal is paid.