Item 1.01. Entry into a Material Definitive Agreement.
On May 31, 2019, AngioDynamics completed the previously disclosed sale of its fluid management business (the “
Business
”) and all of the assets used primarily in connection with the Business (the “
Transaction
”) to Medline Industries, Inc. (“
Medline
”) pursuant to an asset purchase agreement dated April 17, 2019 (the “
Asset Purchase Agreement
”).
On June 3, 2019 and in connection with the completion of the Transaction, AngioDynamics repaid all amounts outstanding under its Existing Credit
Agreement (as defined below) and entered into a new Credit Agreement (the “
Credit Agreement
”) with the lenders party thereto, JPMorgan Chase Bank, N.A., as
administrative agent, and Bank of America, N.A. and KeyBank National Association, as co-syndication agents.
The Credit Agreement provides for a $125 million secured revolving credit facility, which includes an uncommitted expansion feature that allows
AngioDynamics to increase the total revolving commitments and/or add new tranches of term loans in an aggregate amount not to exceed $75 million (the “
Revolving Facility
”).
The proceeds of the Revolving Facility may be used to refinance certain existing indebtedness of AngioDynamics and its subsidiaries, to finance the working capital needs, and for general corporate purposes (including permitted acquisitions), of
AngioDynamics and its subsidiaries. The Revolving Facility has a five year maturity. Interest on the Revolving Facility will be based, at AngioDynamics’ option, on a base rate of LIBOR plus an applicable margin tied to AngioDynamics’ total
leverage ratio and having ranges of between 0.25% and 0.75% for base rate loans and between 1.25% and 1.75% for LIBOR loans. After default, the interest rate may be increased by 2.0%. The Revolving Facility will also carry a commitment fee of
0.20% to 0.25% per annum on the unused portion.
AngioDynamics’ obligations under the Revolving Facility are unconditionally guaranteed, jointly and severally, by AngioDynamics’ material direct and
indirect wholly-owned domestic subsidiaries (the “
Guarantors
”). All obligations of AngioDynamics and the Guarantors under the Revolving Facility are secured by first
priority security interests in substantially all of the assets of AngioDynamics and the Guarantors.
The Credit Agreement includes customary representations, warranties and covenants, and acceleration, indemnity and events of default provisions,
including, among other things, two financial covenants. One financial covenant requires AngioDynamics to maintain, as of the end of each of its fiscal quarters commencing with the fiscal quarter ended May 31, 2019, a fixed charge coverage ratio
of not less than 1.25 to 1.00. The other financial covenant requires AngioDynamics to maintain, as of the end of each of its fiscal quarters commencing with the fiscal quarter ended May 31, 2019, a total leverage ratio of not greater than 3.00 to
1.00 (which, during certain periods following material acquisitions, shall be increased to 3.50 to 1.00).
The above description is only a summary of the material terms of the Credit Agreement and is qualified in its entirety by the actual terms of the Credit
Agreement, a copy of
which is filed as
Exhibit 10.1
to this Current Report on Form 8-K and
incorporated herein by reference.
The information set forth under Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
On June 3, 2019, AngioDynamics used a portion of the proceeds received upon completion of the Transaction to repay all amounts owed under AngioDynamics’
existing Credit Agreement, dated as of November 7, 2016, with the lenders party thereto, JPMorgran Chase Bank, N.A., as administrative agent, Bank of America, N.A. and KeyBank National Association, as co-syndication agents, and JPMorgan Chase
Bank N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and KeyBank National Association, as joint bookrunners and joint lead arrangers (the “
Existing Credit Agreement
”),
and as a result, the Existing Credit Agreement was terminated. Pursuant to the terms of the Existing Credit Agreement, AngioDynamics had the option to repay this facility at any time prior to the maturity date without penalty.
The information set forth under Item 1.01 and Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.