Subsequent Events

12 Months Ended

Dec. 31, 2021

SUBSEQUENT EVENTS

Acquisition of Smiths Medical 2020 Limited

On January 6, 2022, we completed the acquisition of Smiths Medical, the holding company of Smiths Group plc's global medical device business, from Smiths Group International Holdings Limited (the “Seller”). In accordance with the Share Sale and Purchase Agreement (the "Purchase Agreement"), we purchased 100% of the equity interests of Smiths Medical for approximately $1.9 billion in cash and issued of 2.5 million of fully paid and non-assessable shares of our common stock, par value $0.10 per share. The Purchase Agreement also includes a potential contingent earn-out payment of $100.0 million in cash, which is to be based upon our common stock achieving a certain volume-weighted average price for certain periods from closing to the third or fourth anniversary of closing. The acquisition of Smiths Medical adds to and complements our current product portfolio and the combining of both businesses allows us to be a scaled U.S.-based global competitor that increases the stability of the medical supply chain and allows for future growth.

At closing, in connection with the issuance of the stock consideration to the Seller, we entered into a Shareholders Agreement (the “Shareholders Agreement”). The Shareholders Agreement imposes certain restrictions on the Seller including prohibiting certain transfers of the shares of our common stock issued (i) for 6 months following the closing of the acquisition transaction and (ii) to certain of our competitors and certain other parties, as well as customary standstill limitations. Under the Shareholders Agreement, the Seller has the right to designate one individual for election to our board of directors so long as the Seller beneficially owns at least 5.0% of the total outstanding shares of our common stock.

We expect to account for the Smiths acquisition as a business combination, however the initial accounting for the business combination is incomplete. We are unable to provide preliminary estimates of asset and liability fair market values as the external valuation of the assets acquired and liabilities assumed is incomplete. We plan to file the required historical financial statements and the required pro forma financial statements of the combined results of ICU and Smiths Medical in a Form 8-K/A to amend the Current Report on Form 8-K filed on January 7, 2022 by March 22, 2022.

Issuance of Senior Secured Credit Facilities

On January 6, 2022, to partially finance the acquisition of Smiths Medical, we entered into a credit agreement (the "Credit Agreement") with Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, Barclays Bank PLC and certain other financial institutions (the “Lenders”), pursuant to which, among other things, the Lenders provided us with credit facilities in the aggregate amount of $2.2 billion consisting of (i) a five-year term loan A of $850.0 million, (ii) a seven-year Term Loan B of $850.0 million and (iii) a five-year Revolving Credit Facility of $500.0 million.

Principal Payments

Principal payments on the term loan A and term loan B Facilities are due on the last day of each calendar quarter commencing on June 30, 2022. The term loan A Facility will amortize in an amount equal to 2.50% of the original principal amount in the first two years, 5.00% in the third and fourth years and 7.50% in the fifth year, with a final payment of the outstanding principal balance due on the respective maturity date. The term loan B Facility will mature in twenty-seven consecutive quarterly installments in an amount equal to 0.25% of the aggregate principal amount of the term loan B outstanding on the Closing Date, with a final payment of the outstanding principal balance due on the respective maturity date. All outstanding revolving loans over the term of the revolver are to be paid by the applicable maturity date.

Interest Rate Terms

In general, U.S. dollar revolving and term loans under the credit facilities may bear interest, at our option, on either (1) the Base Rate, as defined in the Credit Agreement, plus the applicable margin, as indicated below or (2) Adjusted Term secured overnight financing rate, as defined in the Credit Agreement, plus applicable margin as indicated below.

Revolving Credit Facility Commitment Fee

The revolving credit facility has a per annum commitment fee at an initial rate of 0.25% which is applied to the available amount of the revolving credit facility. The commitment fee after the quarter ending June 30, 2022 is calculated based on the leverage ratio as indicated below.

Applicable Interest Margins

The applicable interest margins with respect to revolving loans and the term loan A Facility shall initially be 1.75% for RFR Loans, as defined in the Credit Agreement. The following pricing grid for the revolving credit facility and the term loan A Facility will become effective after the quarter ending June 30, 2022 and will be based on changes in the Leverage Ratio as follows:


Leverage Ratio	Applicable Margin for RFR Loans	Applicable Margin for Base Rate Loans	Commitment Fee Rate
>4.00 to 1.0	2.25%	1.25%	0.35%
<4.00 to 1.0 but >3.00 to 1.0	2.00%	1.00%	0.30%
<3.00 to 1.0 but >2.50 to 1.0	1.75%	0.75%	0.25%
<2.50 to 1.0 but >2.00 to 1.0	1.50%	0.50%	0.20%
<2.00 to 1.0	1.25%	0.25%	0.15%

The applicable interest margins for the term loan B Facility shall initially be set at 2.50% for Eurocurrency Rate Loans. The following pricing grid will become effective on the Adjustment Date and will be based on changes in the Leverage Ratio as follows:


Leverage Ratio	Applicable Margin for Eurocurrency Rate Loans	Applicable Margin for Base Rate Loans
>2.75 to 1.0	2.50%	1.50%
<2.75 to 1.0	2.25%	1.25%

The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Loan Parties and the restricted subsidiaries of the Company, including, without limitation, restrictions on liens, indebtedness, investments, fundamental changes, dispositions, restricted payments and prepayment of junior indebtedness. The Credit Agreement contains financial covenants on the revolving credit facility and term loan A Facility that require the Loan Parties and the restricted subsidiaries of the Company to (i) not exceed a maximum secured net leverage ratio initially set at 4.50 to 1.00, with stepdowns to 4.00 to 1.00 on June 30, 2024 and (ii) a minimum interest coverage ratio of 3.00 to 1.00.

The Credit Agreement contains customary events of default, including, without limitation, payment defaults, covenant defaults, breaches of certain representations and warranties, cross defaults and cross-acceleration to certain material indebtedness, certain events of bankruptcy and insolvency, impairment of security, certain events under ERISA, material judgments and a change of control. If an event of default occurs and is not cured within any applicable grace period or is not waived, the administrative agent and the lenders are entitled to take various actions, including, without limitation, the acceleration of amounts due thereunder and termination of commitments under the Facilities.