Summary
Thermo Fisher Scientific Inc. (TMO) announced on July 24, 2017, the successful issuance of €2.4 billion in aggregate principal amount of senior notes through a public offering. This debt issuance comprises €500 million in floating rate notes due 2019 and €1.9 billion in fixed-rate notes maturing in 2026, 2029, and 2037, with coupon rates ranging from 1.400% to 2.875%. The company intends to use the net proceeds, estimated at approximately $2.95 billion, to fund a portion of the acquisition of Patheon N.V., a significant strategic move expected to cost around $7.2 billion in total, including the repayment of Patheon's debt and associated costs.
Key Highlights
- 1Thermo Fisher Scientific issued €2.4 billion in senior notes across multiple maturities (2019, 2026, 2029, 2037).
- 2The proceeds are primarily intended to fund the acquisition of Patheon N.V., valued at approximately $7.2 billion.
- 3The debt issuance includes both floating rate notes (EURIBOR + 0.230%) and fixed-rate notes with varying coupon rates (1.400% to 2.875%).
- 4The notes are general unsecured obligations of the company, senior to subordinated debt but effectively subordinated to secured debt and structurally subordinated to subsidiary debt.
- 5A special mandatory redemption event is triggered if the Patheon acquisition is not consummated by February 15, 2018, or the purchase agreement is terminated, requiring redemption at 101% of principal plus accrued interest.
- 6The company has applied to list the notes on the New York Stock Exchange (NYSE).
Frequently Asked Questions
The primary purpose of this €2.4 billion debt issuance is to fund a portion of the acquisition of Patheon N.V., a significant strategic move for Thermo Fisher Scientific.
Thermo Fisher Scientific issued €500 million in floating rate senior notes due 2019 and €1.9 billion in fixed-rate senior notes due 2026, 2029, and 2037 with coupon rates of 1.400%, 1.950%, and 2.875%, respectively. Interest on the floating rate notes accrues at 3-month EURIBOR plus 0.230%.
If the Patheon acquisition is not completed by February 15, 2018, or if the purchase agreement is terminated before then, Thermo Fisher Scientific will be required to redeem all of the issued notes at a price of 101% of the principal amount plus accrued interest.
The notes are general unsecured obligations of Thermo Fisher Scientific. They rank equally with other unsecured and unsubordinated debt. However, they are effectively subordinated to any secured debt of the company and structurally subordinated to any debt or liabilities of its subsidiaries.