8-KMaterial AgreementsExhibits & Filings

THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Aug 9, 2016)

Filed August 9, 2016For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) announced the issuance of €600 million in Floating Rate Senior Notes due 2018 through its wholly-owned finance subsidiary, Thermo Fisher Scientific (Finance I) B.V. The parent company, Thermo Fisher Scientific Inc., has provided a full and unconditional senior unsecured guarantee for these notes. The primary purpose of this debt issuance is to repay outstanding indebtedness related to the company's prior acquisition of Affymetrix, Inc., with any remaining proceeds allocated for general corporate purposes. This move signals a strategic financial maneuver to manage debt acquired during an acquisition and maintain financial flexibility. Investors should note that the notes are unsecured obligations and are structurally subordinated to the debt of other subsidiaries. Key covenants within the indenture restrict the company's ability to incur secured debt on principal properties or engage in sale-leaseback transactions, and also limit mergers or asset sales. The company expects to use approximately €597.4 million in net proceeds after expenses.

Key Highlights

  • 1Thermo Fisher Scientific Inc. (TMO) subsidiary issued €600 million in Floating Rate Senior Notes due 2018.
  • 2The notes are fully and unconditionally guaranteed by the parent company on a senior unsecured basis.
  • 3Proceeds will be used primarily to repay debt incurred for the Affymetrix, Inc. acquisition.
  • 4Any remaining proceeds are designated for general corporate purposes, including potential acquisitions or debt refinancing.
  • 5The notes mature on August 9, 2018, with quarterly interest payments.
  • 6Covenants restrict secured debt, sale-leaseback transactions, and major corporate restructurings (mergers/asset sales).
  • 7An event of default, including payment defaults or bankruptcy, can lead to acceleration of the principal amount of the notes.

Frequently Asked Questions

The net proceeds from the sale of these notes are intended to be used to repay all outstanding indebtedness under the company's term loan facility, which was originally used to fund the acquisition of Affymetrix, Inc. Any remaining funds will be used for general corporate purposes.

The Floating Rate Senior Notes due 2018 mature on August 9, 2018. Interest will be paid quarterly, and as indicated by the name, the interest rate will float.

The notes are general unsecured obligations of Thermo Fisher International and rank equally with other existing and future unsecured and unsubordinated indebtedness of Thermo Fisher International. They are effectively subordinated to any secured indebtedness and structurally subordinated to debt and liabilities of other subsidiaries.

The indenture contains limited covenants that restrict the company and its subsidiaries from incurring debt secured by liens on 'Principal Properties' or shares of 'Principal Subsidiaries,' and limits engaging in sale and lease-back transactions. It also restricts mergers, consolidations, or the sale of substantially all assets.