8-KMaterial AgreementsFinancial EventsExhibits & Filings

THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Sep 1, 2006)

Filed September 1, 2006For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO), formerly Thermo Electron Corporation, announced on August 29, 2006, the entry into a material definitive agreement for a new five-year unsecured revolving credit facility totaling up to $1 billion, with an option to increase by an additional $500 million. This new facility is a significant development as it is contingent upon the successful completion of the previously announced merger with Fisher Scientific International Inc. The credit facility is intended to refinance existing debt of both companies and provide ongoing financing for working capital, capital expenditures, and general corporate purposes. This new credit arrangement demonstrates the company's proactive approach to securing its financial future and ensuring liquidity post-merger. The substantial credit line, coupled with flexible borrowing options and competitive interest rates tied to debt ratings, positions Thermo Fisher for continued operational flexibility and strategic execution. Investors should note that the effectiveness of this agreement is directly tied to the merger's closing, which has a termination date of May 7, 2007, unless extended.

Key Highlights

  • 1Entry into a $1 billion, five-year unsecured revolving credit facility, with an optional $500 million increase, effective upon the consummation of the merger with Fisher Scientific.
  • 2The credit facility aims to refinance existing credit lines of both Thermo Fisher and Fisher Scientific, and fund working capital, capital expenditures, and general corporate needs.
  • 3Borrowings will bear interest at a rate tied to LIBOR or a prime rate, plus a margin that varies based on the company's long-term debt rating, offering potential cost savings.
  • 4The facility includes a $250 million sublimit for letters of credit.
  • 5The agreement has an outside termination date of May 7, 2007, if the merger is not completed by then.
  • 6The credit facility includes customary affirmative, negative, and financial covenants, such as debt-to-capital ratios and restrictions on liens and indebtedness.
  • 7Fisher Scientific will unconditionally guarantee the obligations under the credit agreement post-merger.

Frequently Asked Questions

The primary purpose of the new credit agreement is to refinance certain existing credit facilities of both Thermo Electron Corporation and Fisher Scientific International Inc., and to provide financing for working capital, capital expenditures, and other general corporate purposes.

Thermo Fisher can borrow up to $1 billion under the initial Aggregate Commitment, with an option to increase the facility by an additional $500 million.

The effectiveness of the credit agreement is conditioned upon the consummation of the merger between Thermo Electron Corporation and Fisher Scientific International Inc.

The credit facility matures on August 29, 2011, unless extended. However, the commitment terminates if the merger with Fisher Scientific is not consummated by May 7, 2007.