8-KMaterial AgreementsExhibits & Filings

THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Aug 22, 2012)

Filed August 22, 2012For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) announced on August 22, 2012, the issuance of $500 million in 1.850% Senior Notes due 2018 and $800 million in 3.150% Senior Notes due 2023, totaling $1.3 billion in aggregate principal amount. The primary purpose of this debt offering is to fund the cash consideration for its acquisition of One Lambda, Inc., an estimated $925 million transaction, along with associated costs. If the One Lambda acquisition does not close by December 31, 2012, the 2023 Notes will be subject to a special mandatory redemption at 101% of their principal amount. The company has outlined covenants that restrict its ability to incur certain secured debt, engage in sale-leaseback transactions, and sell substantially all of its assets. The Notes are general unsecured obligations, subordinated to secured debt and structurally subordinated to subsidiary liabilities. The filing also details conditions for potential mandatory repurchase offers upon a change of control coupled with a credit rating downgrade. Remaining proceeds, if any, after the acquisition are earmarked for general corporate purposes.

Key Highlights

  • 1Thermo Fisher Scientific issued a total of $1.3 billion in senior notes: $500 million due 2018 at 1.850% and $800 million due 2023 at 3.150%.
  • 2The primary use of proceeds is to finance the acquisition of One Lambda, Inc., for approximately $925 million in cash.
  • 3A specific provision mandates the redemption of the 2023 Notes at a premium (101%) if the One Lambda acquisition does not close by December 31, 2012.
  • 4The notes are general unsecured obligations, effectively subordinated to secured debt and structurally subordinated to liabilities of subsidiaries.
  • 5Covenants in the indenture restrict the company's ability to incur certain secured debt, engage in sale-leaseback transactions, and sell all or substantially all of its assets.
  • 6A 'change of control' event, combined with a significant credit rating downgrade, could trigger a mandatory offer to repurchase the notes at 101% of their principal amount.
  • 7Any proceeds remaining after the acquisition, or if the acquisition is not completed, will be used for general corporate purposes.

Frequently Asked Questions

The primary reason for issuing these senior notes is to fund the cash consideration for Thermo Fisher Scientific's acquisition of One Lambda, Inc., which is estimated to cost approximately $925 million.

If the One Lambda acquisition is not consummated by December 31, 2012, Thermo Fisher Scientific is obligated to redeem the $800 million of 3.150% Senior Notes due 2023 at a price of 101% of their principal amount, plus accrued interest. This redemption would occur on a 'Special Mandatory Redemption Date' by January 30, 2013.

The notes are general unsecured obligations of Thermo Fisher Scientific. This means they are effectively subordinated to any secured debt the company may have and structurally subordinated to the debt of its subsidiaries.

The company can redeem the notes at its option, subject to certain conditions and premium calculations based on treasury rates. Additionally, limited negative covenants restrict the company from incurring certain types of secured debt, engaging in sale-leaseback transactions, or selling substantially all of its assets without triggering potential events of default or mandatory repurchase offers.