Item 2.01.
Completion of an Acquisition or Disposition of Assets.
Completion of the Sale of the Semiconductor Cryogenics Business
On July 1, 2019, Brooks Automation, Inc. (“Brooks”) completed its previously disclosed sale of its semiconductor cryogenics business to Edwards Vacuum LLC (the “Purchaser”) (a member of the Atlas Copco Group) for $675 million in cash, subject to adjustments for working capital and other items (the “Disposition”). The semiconductor cryogenics business manufactures, markets, sells, distributes, services and refurbishes cryogenic vacuum pumps (including water pumps), chillers, coolers, compressors, refrigeration systems and spare parts relating to each of the foregoing, known as the “CTI Cryogenics” and the “Polycold” product lines (referred to herein as the “Cryogenics Business”). The Cryogenics Business also includes a 50% equity interest in Ulvac Cryogenics, Inc., a joint venture in Japan with Ulvac Inc.
In connection with the closing, Brooks and the Purchaser entered into certain other agreements, including a transition services agreement, leases to the Purchaser for certain of Brooks’ facilities in Chelmsford, Massachusetts, and a supply agreement. The transition service agreement outlines the information technology, people, and facility support the parties expect to provide each other for a period from 1 month to 6 months following the closing. The lease agreements provide facility space to the Purchaser free of charge for three years following the closing and provide the Purchaser with the option to renew each lease at the then current market rates after the initial three-year lease terms have ended. The supply agreement allows Brooks to purchase CTI and Polycold goods at cost from the Purchaser up to an aggregate amount equal to $1.0 million until the first anniversary of the closing.
Proceeds/Extinguishment of Debt
Brooks expects the net cash proceeds from the sale of the Cryogenics Business to be approximately $550 million, after adjustments and deducting taxes and other items. Brooks used $348.3 million of the proceeds from the Disposition to extinguish its outstanding balance at July 1, 2019 of the $350 million incremental term loan secured on November 15, 2018 under its senior secured term loan facility. In addition, Brooks used $147.0 million of the proceeds from the Disposition to extinguish a portion of the outstanding balance at July 1, 2019, of the $200 million term loan secured on October 4, 2017. Please refer to Item 9.01 included in this Current Report on Form 8-K for pro forma financial information related to the extinguishment of debt.
Amendment to Asset Purchase Agreement
In connection with the closing, on June 28, 2019, Brooks entered into Amendment No. 2 to Asset Purchase Agreement (the “Amendment”) with the Purchaser, and, solely for certain sections, Atlas Copco AB, amending the Asset Purchase Agreement, dated August 27, 2018, as amended, by and among Brooks, the Purchaser and solely for certain sections thereof, Atlas Copco AB (as amended, the “Purchase Agreement”), to, among other things, amend the mechanics of the working capital adjustment, assumed and excluded liabilities and amend certain of the covenants of the parties set forth in the Purchase Agreement. The foregoing description of
the Amendment does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Amendment, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
In connection with the Amendment, Brooks will revise its accounts payable balances on a continuing operations basis to exclude accounts payable related to the Cryogenics Business and its current liabilities held for sale balances to include accounts payable related to the Cryogenics Business for previously reported historical periods in the event those periods are presented in future filings. As of March 31, 2019, Brooks’ most recent quarter end period and September 30, 2018, Brooks’ most recent fiscal year end period, the accounts payable balance related to the Cryogenics Business was $8.8 million and $11.1 million, respectively.