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Steris 8-K Report, Material Agreement (Apr 11, 2024)

Reports
Material Agreements·Regulation FD·Exhibits & Filings
Filing Date
Filed April 11, 2024
Period End
April 10, 2024
Security
STE
In the record · 2019–202610-K810-Q228-K64

STE filed 8 annual reports (10-K), 22 quarterly reports (10-Q) and 64 current reports (8-K) between 2019 and 2026.

  1. Change in control8-K · Mar ’19Mar ’19
  2. Leadership change8-K · Aug ’21Aug ’21
  3. Leadership change8-K · Jul ’23Jul ’23
  4. Material agreement8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed April 11, 2024. Cited figures are marked; the original filing is the authoritative source.

STERIS plc (NYSE: STE) announced on April 10–11, 2024 that its wholly owned subsidiary, STERIS Corporation, entered into an Equity Purchase Agreement to sell the company's Dental business segment to HuFriedy Group Holding LLC, an affiliate of Peak Rock Capital LLC.

The purchase price is $787.5 milliona in cash, subject to customary adjustments, plus up to an additional $12.5 million in contingent payment if the Dental business achieves certain revenue targets in fiscal year 2025. The press release states that the Dental segment reported revenue of $407 million and segment operating income of $86 million in the trailing twelve months ended December 31, 2023. STERIS said the divestiture will allow it to focus on Customers within its core markets in healthcare, pharma and MedTech.

The company intends to use the proceeds primarily to repay debt and expects the resulting reduction in interest expense to provide approximately $0.35b per diluted share on a full-year run-rate basis. The Dental segment will be reported as discontinued operations for the fourth quarter and full year of fiscal 2024.

The transaction is subject to customary closing conditions, including Hart-Scott-Rodino Act clearance, and is expected to close in the first quarter of fiscal 2025. Either party may terminate the agreement if the deal has not closed by July 10, 2024, extendable to August 10, 2024 under certain circumstances, and the Purchaser would owe a $35 millionc termination fee in specified circumstances.

02—Key points

Key Highlights

  1. Sale of the Dental segment to an affiliate of Peak Rock Capital LLC for $787.5 million in cash, subject to customary adjustments.
  2. Up to an additional $12.5 million contingent payment tied to Dental segment revenue targets in fiscal year 2025.
  3. Dental segment reported revenue of $407 million and segment operating income of $86 million for the trailing twelve months ended December 31, 2023.
  4. Proceeds to be used primarily to repay debt; expected interest expense reduction of approximately $0.35 per diluted share on a full-year run-rate basis.
  5. Dental segment to be reported as discontinued operations for the fourth quarter and full year of fiscal 2024.
  6. Transaction expected to close in the first quarter of fiscal 2025, subject to Hart-Scott-Rodino approvals and other customary conditions.
  7. Purchaser would pay a $35 million termination fee under specified circumstances; either party may terminate if not closed by July 10, 2024 (extendable to August 10, 2024).

03—Questions

Frequently Asked Questions

  1. What is STERIS selling and to whom?

    STERIS, through its wholly owned subsidiary STERIS Corporation, agreed to sell its Dental business segment to HuFriedy Group Holding LLC, an affiliate of Peak Rock Capital LLC, described as a leading middle-market private investment firm. The transaction is structured as an equity sale.

  2. How much will STERIS receive for the Dental segment?

    The purchase price is $787.5 million in cash, subject to customary adjustments, plus up to an additional $12.5 million contingent payment if the Dental business achieves certain revenue targets in fiscal year 2025.

  3. How will STERIS use the sale proceeds?

    STERIS intends to use the proceeds primarily to repay debt. On a full-year run-rate basis, it expects the resulting reduction in interest expense to be approximately $0.35 per diluted share.

  4. When is the deal expected to close, and what could prevent it?

    The transaction is expected to close in the first quarter of fiscal 2025. Closing is subject to customary conditions, including receipt of Hart-Scott-Rodino Act approvals and regulatory review. Either party may terminate the agreement if the transaction has not occurred by July 10, 2024, which may be extended to August 10, 2024 under certain circumstances.

  5. How will the divestiture appear in STERIS's financial statements?

    The Dental segment will be reported as discontinued operations for the fourth quarter and full year of fiscal 2024. STERIS will provide fiscal 2025 outlook reflecting the transaction when it issues fourth-quarter fiscal 2024 results.

04—Continue

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