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THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Oct 18, 2021)

Filed October 18, 2021For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) announced on October 18, 2021, the issuance of €5.3 billion aggregate principal amount of senior notes through its indirect wholly-owned finance subsidiary, Thermo Fisher Scientific (Finance I) B.V. These notes are comprised of four tranches with varying interest rates and maturity dates, ranging from 0.800% due in 2030 to 2.000% due in 2051. The Company has provided a full and unconditional guarantee for these notes. The primary purpose of this substantial debt issuance is to fund a portion of the cash consideration for the previously announced acquisition of PPD, Inc. This strategic move underscores Thermo Fisher's commitment to its growth strategy, particularly in expanding its capabilities through significant acquisitions. Pending the closing of the PPD acquisition, the proceeds may be temporarily used for general corporate purposes, including other acquisitions, debt refinancing, working capital, capital expenditures, or equity repurchases.

Key Highlights

  • 1Thermo Fisher Scientific (Finance I) B.V. issued €5.3 billion in senior notes across four tranches.
  • 2The notes have coupon rates ranging from 0.800% to 2.000% and maturities from 2030 to 2051.
  • 3Thermo Fisher Scientific Inc. fully and unconditionally guarantees the issued notes.
  • 4The net proceeds are primarily intended to finance the acquisition of PPD, Inc.
  • 5The notes are general unsecured obligations, ranking equally with other senior unsecured debt but subordinated to secured debt.
  • 6The indenture includes limited covenants restricting liens on principal properties and sale-leaseback transactions.
  • 7A change of control event coupled with a credit rating downgrade could trigger a mandatory offer to repurchase the notes at 101% of the principal amount.

Frequently Asked Questions

The primary reason for this debt issuance is to fund a portion of the cash consideration for Thermo Fisher Scientific's previously announced acquisition of PPD, Inc. This acquisition is a significant strategic move to enhance the company's offerings and market position.

Thermo Fisher International issued €5.3 billion in senior notes with varying terms: €1.75 billion of 0.800% notes due 2030, €1.5 billion of 1.125% notes due 2033, €1.25 billion of 1.625% notes due 2041, and €0.75 billion of 2.000% notes due 2051. These notes are guaranteed by Thermo Fisher Scientific Inc. and are general unsecured obligations.

If the PPD acquisition is delayed or does not close, Thermo Fisher Scientific may use a portion of the net proceeds for general corporate purposes. These purposes could include other acquisitions, repayment and refinancing of debt, working capital, capital expenditures, or the repurchase of its outstanding equity securities. The proceeds may also be temporarily invested in short-term, liquid investments.

Yes, the indenture includes provisions for noteholders in the event of a change of control. If a change of control occurs and the notes are simultaneously downgraded below investment grade by at least two major rating agencies (Moody's, S&P, or Fitch), Thermo Fisher International will be required to make an offer to repurchase the notes at 101% of their principal amount, plus accrued interest.