Thermo Fisher gets 364-day $1.5 billion term loan for Patheon purchase

By Wendy Van Sickle

Columbus, Ohio, Aug. 11 – Thermo Fisher Scientific Inc. entered into a 364-day $1.5 billion unsecured term loan facility on Friday with Bank of America Merrill Lynch as lead arranger and bookrunner and Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Loans are available for seven days from the effective date and may be used to fund part of the company’s acquisition of Patheon, NV for about $7.2 billion in cash and stock.

Borrowings bear interest at Libor plus 87.5 basis points to 162.5 bps, depending on the company’s debt ratings.

The loan agreement requires the company to maintain a maximum ratio of consolidated debt to consolidated EBITDA of 5.0 to 1.0, with a step down to 4.5 to 1.0 for any fiscal quarter ended at least six months after the date the acquisition closes. Thermo Fisher must also maintain a minimum interest coverage ratio of 3.0 to 1.0 at the last day of any fiscal quarter.

Thermo Fisher also priced a $1.5 billion issue of senior notes in two equally sized parts on Thursday – a 10-year 3.2% tranche and a 30-year 4.1% tranche – to help fund the acquisition.

The acquisition is expected to close around the end of the third quarter of 2017.

Thermo Fisher is a Waltham, Mass.-based science technology company. Patheon is a pharmaceutical contract development and manufacturing organization with headquarters in Amsterdam.

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