8-KMaterial AgreementsFinancial EventsOther Events+1

ENTEGRIS INC 8-K Report, Material Agreement (Nov 6, 2018)

Filed November 6, 2018For Securities:ENTG

Summary

Entegris, Inc. (ENTG) announced on November 6, 2018, the entry into a new, substantial credit agreement totaling $700.0 million, with the flexibility to increase by an additional $400.0 million. This new facility consists of a $400.0 million Term Loan Facility and a $300.0 million Revolving Facility, designed to refinance existing debt and provide ongoing financial flexibility. The company also simultaneously terminated its prior credit agreements, indicating a strategic move to consolidate and potentially improve its financing structure. The new credit facilities are secured by substantially all of the Company's assets and those of its subsidiary guarantors, providing lenders with significant collateral. The terms include variable interest rates based on either a base rate or LIBOR, with applicable margins that adjust based on the company's senior secured net leverage ratio. Mandatory prepayments are required based on excess cash flow and proceeds from asset sales or debt issuances, ensuring a disciplined approach to debt reduction. This refinancing is a key event for investors to assess the company's capital structure and its commitment to managing debt levels.

Key Highlights

  • 1Entegris entered into a new credit agreement for $700.0 million, with an accordion feature to increase by up to $400.0 million.
  • 2The new credit facilities include a $400.0 million Term Loan Facility and a $300.0 million Revolving Facility.
  • 3The company simultaneously terminated its existing credit agreements, consolidating its debt structure.
  • 4The new facilities are secured by substantially all of Entegris' and its subsidiary guarantors' assets.
  • 5Interest rates are variable, tied to base rate or LIBOR, with margins adjustable based on the senior secured net leverage ratio.
  • 6The agreement includes mandatory prepayments tied to excess cash flow and asset/debt sale proceeds.
  • 7The Revolving Facility includes a $35.0 million borrowing capacity for letters of credit.

Frequently Asked Questions

The new credit facilities provide for aggregate senior secured financing of $700.0 million, with an option to increase by up to an additional $400.0 million. This facility is comprised of a $400.0 million Term Loan Facility and a $300.0 million Revolving Facility.

Simultaneously with entering into the new credit agreement, Entegris repaid in full and terminated its existing Term Loan Credit and Guaranty Agreement and ABL Credit and Guaranty Agreement, both dated April 30, 2014. Approximately $109 million in principal was repaid under these terminated agreements.

The obligations under the new credit facilities are unconditionally guaranteed by certain of Entegris' wholly-owned domestic subsidiaries and are secured by substantially all of the Company's assets and the assets of its subsidiary guarantors. This includes a first-priority pledge of capital stock and a first-priority security interest in other tangible and intangible assets.

Borrowings bear interest at a variable rate (base rate or LIBOR) plus an applicable margin. The margin adjusts based on the Company's senior secured net leverage ratio. Mandatory prepayments are required from 50% of annual Excess Cash Flow (subject to leverage ratio adjustments), 100% of net proceeds from certain asset sales/condemnations, and 100% of net proceeds from certain debt issuances.