8-KMaterial AgreementsFinancial EventsExhibits & Filings

STRYKER CORP 8-K Report, Material Agreement (Dec 3, 2019)

Filed December 3, 2019For Securities:SYK

Summary

Stryker Corporation (SYK) has announced a significant debt offering, successfully completing a public offering of €2.4 billion in notes across three tranches: €850 million of 0.250% Notes due 2024, €800 million of 0.750% Notes due 2029, and €750 million of 1.000% Notes due 2031. This offering, filed on December 3, 2019, was executed under an existing shelf registration statement and utilizes a base indenture supplemented by three new indentures. The primary stated purpose of these proceeds is to finance the acquisition of Wright Medical Group N.V. and cover related expenses, with any remaining funds allocated for general corporate purposes. A key detail for investors is the inclusion of a special mandatory redemption clause for the 2024 and 2031 Notes, requiring Stryker to redeem them at 101% of principal plus accrued interest if the Wright Medical acquisition is not completed by February 4, 2021, or if the purchase agreement is terminated. The 2029 Notes are excluded from this special redemption feature.

Key Highlights

  • 1Completion of a public offering of €2.4 billion in notes across three tranches: 0.250% due 2024, 0.750% due 2029, and 1.000% due 2031.
  • 2Net proceeds are approximately €2,376 million (or $2,621 million) to be used for the acquisition of Wright Medical Group N.V. and related costs.
  • 3Special mandatory redemption for 2024 and 2031 Notes at 101% if Wright Medical acquisition does not close by February 4, 2021, or agreement is terminated.
  • 4The 2029 Notes are not subject to the special mandatory redemption tied to the Wright Medical acquisition.
  • 5The offering was conducted under an existing Form S-3 shelf registration statement, indicating pre-approved ability to issue debt.
  • 6The Indenture includes covenants limiting the incurrence of liens, sale and leaseback transactions, and asset dispositions.
  • 7A change of control event coupled with a downgrade to below investment grade by both Moody's and S&P triggers a mandatory offer to repurchase the notes at 101%.

Frequently Asked Questions

The primary purpose of this debt offering is to raise approximately €2.4 billion to fund the acquisition of Wright Medical Group N.V. and to cover associated transaction fees and expenses. Any remaining proceeds will be used for general corporate purposes.

The notes mature between 2024 and 2031 with varying interest rates. A significant risk for holders of the 2024 and 2031 Notes is the special mandatory redemption clause: if the Wright Medical acquisition does not proceed by February 4, 2021, or if the acquisition agreement is terminated, Stryker must redeem these notes at 101% of their principal amount plus accrued interest. The 2029 Notes are not subject to this specific redemption trigger.

Yes, the indenture includes covenants that restrict Stryker's ability to incur certain liens, engage in sale and leaseback transactions, and undergo significant consolidations or mergers. Additionally, a change of control event combined with a downgrade of the notes by both Moody's and S&P would trigger a mandatory offer to purchase the notes at 101% of their principal amount.

The special mandatory redemption indicates that these notes are closely linked to the successful completion of the Wright Medical acquisition. If the acquisition fails or is terminated before the specified date, investors in these notes will receive their principal back plus a small premium (101%), but without the potential for ongoing interest payments until maturity, and the funds might not be immediately reinvested at similar rates.