8-KMaterial AgreementsFinancial EventsExhibits & Filings

Parker-Hannifin Corp 8-K Report, Material Agreement (Aug 3, 2021)

Filed August 3, 2021For Securities:PH

Summary

Parker-Hannifin Corporation (PH) has filed an 8-K report detailing a material definitive agreement to acquire Meggitt plc. The proposed acquisition, structured as a court-sanctioned scheme of arrangement under UK law, offers Meggitt shareholders 800 pence in cash per share, valuing the transaction at approximately $11.13 per share based on the prevailing exchange rate at the time of the announcement. This strategic move is a significant development for Parker-Hannifin, aiming to expand its presence and capabilities, particularly in the aerospace and defense sectors where Meggitt operates. The company has secured a bridge loan facility of up to £6,524,000,000 to finance the cash consideration for the acquisition. This facility is subject to customary conditions and may be reduced by proceeds from equity offerings or additional indebtedness. The transaction is contingent upon Meggitt shareholder approval and receipt of necessary regulatory approvals, with a long stop date of 18 months for completion. Investors should monitor the satisfaction of these conditions and the integration plans post-acquisition.

Key Highlights

  • 1Parker-Hannifin announced an offer to acquire Meggitt plc for 800 pence per share in cash, valued at approximately $11.13 per share.
  • 2The acquisition is intended to be implemented through a court-sanctioned scheme of arrangement under UK law.
  • 3Parker-Hannifin has secured a bridge loan facility of up to £6,524,000,000 to finance the cash consideration for the transaction.
  • 4The deal is subject to customary closing conditions, including approval by Meggitt shareholders and regulatory approvals.
  • 5A cooperation agreement has been entered into with Meggitt to facilitate the acquisition process and address employee-related matters.
  • 6The transaction has a 'long stop date' of 18 months, indicating a timeframe for completion.

Frequently Asked Questions

The acquisition is valued at approximately $11.13 per Meggitt share, based on an offer of 800 pence in cash per share and a GBP:USD exchange rate of 1.3913:1. With approximately 781.4 million ordinary shares outstanding and additional shares issuable under various instruments, the total cash consideration would be substantial.

Parker-Hannifin has entered into a bridge loan credit agreement providing a facility of up to £6,524,000,000 (approximately $9.07 billion at the stated exchange rate) to finance the cash consideration. This facility can be reduced by proceeds from future equity offerings or additional indebtedness.

The acquisition is conditional upon several key factors, including the approval of the scheme by Meggitt's shareholders and the receipt of necessary regulatory approvals. The transaction also has a target completion timeframe, with a 'long stop date' of 18 months.

While not explicitly detailed in this 8-K, Meggitt operates significantly in the aerospace and defense sectors. This acquisition is likely aimed at strengthening Parker-Hannifin's position in these key end markets, expanding its product portfolio, and potentially achieving synergies.