UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01 Entry Into a Material Definitive Agreement.
On April 30, 2024, Haemonetics Corporation (the “Company”) entered into a second amended and restated credit agreement by and among the Company, as borrower, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Revised Credit Agreement”). The Revised Credit Agreement amends and restates the Company’s pre-existing credit agreement, dated as of July 26, 2022, by and among the Company, as borrower, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “2022 Credit Agreement”) to, among other things, refinance the credit facilities under the 2022 Credit Agreement and extend the maturity date of such credit facilities to April 2029.
The Revised Credit Agreement provides for a $250 million senior unsecured term loan, the proceeds of which have been used to retire the balance of the term loan under the 2022 Credit Agreement, and a $750 million senior unsecured revolving credit facility, which constitutes a $330 million increase from the revolving credit facility under the 2022 Credit Agreement. Loans under the Revised Credit Agreement will initially bear interest at an annual rate equal to the Adjusted Term SOFR Rate (as defined in the Revised Credit Agreement), which is subject to a floor of 0%, plus an applicable rate ranging from 1.125% to 1.750% based on the Company’s Consolidated Net Leverage Ratio (as defined in the Revised Credit Agreement) at the applicable measurement date. Adjusted Term SOFR Rate loans are also subject to a credit spread adjustment of 0% per annum. The revolving credit facility carries an unused fee that ranges from 0.125% to 0.250% annually based on the Company’s Consolidated Net Leverage Ratio at the applicable measurement date. The revolving credit facility and term loan facility also permit U.S. dollar borrowings at a base rate specified in the Revised Credit Agreement and the revolving credit facility permits borrowings denominated in other currencies which, if incurred, would bear interest at the respective rates set forth in the Revised Credit Agreement. The Revised Credit Agreement matures on April 30, 2029. The principal amount of the term loan under the Revised Credit Agreement amortizes quarterly through the maturity date at a rate of 2.5% for the first three years following the closing date, 5% for the fourth year following the closing date and 7.5% for the fifth year following the closing date, with the unpaid balance due at maturity.
The Revised Credit Agreement contains financial covenants that require that the Company maintain (i) a maximum Consolidated Net Leverage Ratio of 4.00x or, on up to two occasions during the term of the facility, 4.50x for the four consecutive fiscal quarters ended immediately following the consummation of a Qualifying Material Acquisition (meaning one or more Permitted Acquisition(s) (as defined in the Revised Credit Agreement) for which the aggregate consideration paid over a 12-month period exceeds $100 million) and (ii) a minimum Consolidated Interest Coverage Ratio (as defined in the Revised Credit Agreement) of 3.50x. The Consolidated Net Leverage Ratio is calculated based on earnings before interest, taxes, depreciation and amortization, as adjusted pursuant to the Revised Credit Agreement (“Consolidated EBITDA”). The Company is permitted to exclude from Consolidated EBITDA, among other things, (i) unusual or non-recurring charges or expenses, (ii) transaction costs related to the closing of Permitted Acquisitions or other permitted Investments (as defined in the Revised Credit Agreement) and (iii) restructuring charges, costs or expenses and expected cost savings and cost synergies not to exceed 25% of Consolidated EBITDA. In addition, the Company is generally permitted to deduct certain cash and cash equivalents maintained in the United States by the Company and its restricted subsidiaries from the Consolidated Total Debt (as defined in the Revised Credit Agreement) component of the Consolidated Net Leverage Ratio in an amount up to the greater of $200 million and 50% of Consolidated EBITDA. The Revised Credit Agreement also includes customary affirmative and negative covenants that include exceptions that permit the Company to, among other things, incur Indebtedness (as defined in the Revised Credit Agreement) up to the greater of $250 million and 67.5% of Consolidated EBITDA related to the acquisition, construction or improvement of any fixed or capital assets, including certain capital lease obligations, and places no fixed dollar limits on the Company’s ability to enter into operating leases or undertake non-hostile acquisitions or other investments, subject, in the case of acquisitions or investments, to the Company’s compliance with its financial covenants and so long as no Event of Default (as defined in the Revised Credit Agreement) has occurred and is continuing or would result from such actions by the Company.
A copy of the Revised Credit Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The foregoing description of the Revised Credit Agreement is qualified in its entirety by reference to the full text of the Revised Credit Agreement.
Item 1.02 Termination of a Material Definitive Agreement.
The information set forth under Item 1.01 is hereby incorporated by reference into this Item 1.02.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
(a)
The information set forth under Item 1.01 is hereby incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |
| 10.1 | Second Amended and Restated Credit Agreement, dated as of April 30, 2024, by and among the Company, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HAEMONETICS CORPORATION | |||
| May 1, 2024 | By: | /s/ Christopher A. Simon | |
| Name: | Christopher A. Simon | ||
| Title: | President and Chief Executive Officer | ||