8-KMaterial AgreementsExhibits & Filings

THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Aug 14, 2017)

Filed August 14, 2017For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) announced on August 14, 2017, the issuance of $1.5 billion in aggregate principal amount of senior notes. This issuance comprises $750 million of 3.200% Senior Notes due 2027 and $750 million of 4.100% Senior Notes due 2047. The company intends to use the net proceeds from this offering to fund a portion of the consideration for its previously announced acquisition of Patheon N.V. The notes are general unsecured obligations of the company, ranking equally with existing unsecured and unsubordinated debt, but are effectively subordinated to secured debt and structurally subordinated to the debt of subsidiaries. The filing also outlines provisions for special mandatory redemption if the Patheon acquisition does not close by February 15, 2018, or if the purchase agreement is terminated. Additionally, redemption options and change of control provisions are detailed.

Key Highlights

  • 1Issued $1.5 billion in aggregate principal amount of senior notes: $750 million of 3.200% Senior Notes due 2027 and $750 million of 4.100% Senior Notes due 2047.
  • 2The net proceeds from the offering are intended to fund a portion of the acquisition of Patheon N.V.
  • 3The Patheon acquisition is expected to close around the end of Q3 2017, subject to customary closing conditions.
  • 4Notes are general unsecured obligations, senior to subordinated debt, but effectively subordinated to secured debt and structurally subordinated to subsidiary debt.
  • 5Special mandatory redemption required (at 101% of principal) if the Patheon acquisition does not close by February 15, 2018, or if the purchase agreement is terminated.
  • 6The company has call options to redeem the notes prior to maturity under specific conditions and pricing.
  • 7Change of control provisions require an offer to repurchase notes at 101% if accompanied by a rating downgrade by two major credit rating agencies.

Frequently Asked Questions

The primary purpose of issuing the $750 million in 2027 notes and $750 million in 2047 notes is to fund a portion of the cash consideration required for the acquisition of Patheon N.V.

The notes carry interest rates of 3.200% for the 2027 maturity and 4.100% for the 2047 maturity, with semi-annual interest payments. They are unsecured obligations, meaning they are subordinate to secured debt and the debt of subsidiaries. There's also a risk of mandatory redemption at a premium if the Patheon acquisition doesn't proceed as planned.

If the Patheon acquisition is not completed by February 15, 2018, or if the purchase agreement is terminated before that date, Thermo Fisher Scientific will be required to redeem all of the issued notes on a special mandatory redemption date at a price of 101% of their principal amount, plus accrued interest.

The notes are general unsecured obligations and rank equally with the company's other unsecured and unsubordinated indebtedness. However, they are effectively subordinated to any secured indebtedness to the extent of the collateral securing it, and they are structurally subordinated to all indebtedness and liabilities of Thermo Fisher's subsidiaries.