8-KMaterial AgreementsFinancial EventsExhibits & Filings

THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Jun 29, 2011)

Filed June 29, 2011For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) announced on June 23, 2011, the execution of two significant credit agreements designed to support its strategic growth initiatives. The company entered into a 364-day unsecured bridge credit facility totaling $2 billion, primarily intended to fund the acquisition of CB Diagnostics Holding AB (the "Phadia Acquisition"). This facility, which is contingent upon the successful completion of the acquisition by November 19, 2011, offers flexibility in loan types (Base Rate, Eurocurrency, EURIBOR) with interest rates and fees tied to the Company's debt ratings. In addition to the bridge facility, TMO also secured a 364-day unsecured revolving credit facility of up to $1 billion. The proceeds from this facility can be used for the Phadia Acquisition or for general corporate purposes, including backing commercial paper issuances. Both credit agreements include customary covenants, such as maintaining a consolidated indebtedness to consolidated EBITDA ratio of no greater than 3.50 to 1.00, and are guaranteed by its subsidiary, Fisher Scientific International Inc. These agreements underscore TMO's commitment to expanding its business through strategic acquisitions and ensuring robust financial flexibility.

Key Highlights

  • 1Thermo Fisher Scientific entered into a $2 billion, 364-day unsecured bridge credit agreement to finance the acquisition of CB Diagnostics Holding AB.
  • 2The bridge facility's funding is contingent upon the successful completion of the Phadia Acquisition by November 19, 2011.
  • 3A separate $1 billion, 364-day unsecured revolving credit facility was also established for the Phadia Acquisition or general corporate purposes.
  • 4Interest rates on both facilities vary based on loan type (Base Rate, Eurocurrency, EURIBOR) and TMO's debt ratings, with margins ranging from 0.00% to 1.50% plus applicable rates.
  • 5Both credit agreements include fees such as ticking fees, funding fees, and undrawn fees, indicating the cost of securing this financing.
  • 6Key financial covenants require TMO to maintain a consolidated indebtedness to consolidated EBITDA ratio of no greater than 3.50 to 1.00.
  • 7The obligations under both credit facilities are guaranteed by TMO's subsidiary, Fisher Scientific International Inc.

Frequently Asked Questions

The primary purpose of these new credit agreements is to provide financing for Thermo Fisher Scientific's acquisition of CB Diagnostics Holding AB (the 'Phadia Acquisition'). The $2 billion bridge facility is specifically earmarked for this acquisition, while the $1 billion revolving credit facility can also be used for this purpose or for general corporate needs.

The bridge credit agreement is a 364-day unsecured facility for $2 billion. It is designed to fund the Phadia Acquisition and includes various interest rate options (Base Rate, Eurocurrency, EURIBOR) with margins dependent on the company's debt ratings. It also involves several fees, including ticking fees, funding fees, and duration fees.

A significant financial covenant requires Thermo Fisher Scientific to maintain a consolidated indebtedness to consolidated EBITDA ratio of no greater than 3.50 to 1.00 at the end of each fiscal quarter. The agreements also include customary negative covenants restricting liens, indebtedness of subsidiaries, fundamental changes, and dispositions of property.

The obligations of Thermo Fisher Scientific under both the bridge credit agreement and the revolving credit agreement are guaranteed by its subsidiary, Fisher Scientific International Inc.