Summary
McKesson Corporation (MCK) filed an 8-K on December 26, 2012, primarily to disclose the entry into a $2.1 billion Senior Bridge Term Loan Agreement. This facility, established on December 21, 2012, with Bank of America, N.A., as Administrative Agent, is intended to finance the company's proposed acquisition of PSS World Medical, Inc. The bridge loan will be used to pay the merger consideration, repay PSS World Medical's existing debt, and cover associated transaction costs. This financing is expected to be refinanced with longer-term debt before the bridge loan's one-year maturity. Additionally, the filing announces the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act for the PSS World Medical acquisition. This regulatory clearance is a significant step towards the completion of the transaction. Investors should note that the bridge loan terms are similar to McKesson's existing credit facility, including interest rate provisions and covenants, such as a maximum total debt to total capitalization ratio of 56.5%. The company is also providing information on where investors can find additional filings related to the acquisition, including proxy statements.
Key Highlights
- 1McKesson entered into a $2.1 billion Senior Bridge Term Loan Agreement to fund the acquisition of PSS World Medical.
- 2The bridge loan is intended to cover merger consideration, PSS World Medical's debt repayment, and transaction costs.
- 3The company expects to refinance the bridge loan with longer-term debt within its one-year term.
- 4Regulatory approval for the PSS World Medical acquisition was received via early termination of the Hart-Scott-Rodino waiting period.
- 5The bridge loan agreement includes standard covenants, such as limitations on liens, mergers, and a maximum debt-to-capitalization ratio of 56.5%.
- 6The filing also includes details on where investors can access further information and proxy materials related to the acquisition.