Steris obtains term loans and revolver totaling $2.55 billion

By Rebecca Melvin

New York, March 23 – Steris plc and subsidiaries Steris Corp., Steris Ltd. and Steris Irish FinCo Unlimited Co. entered into a $750 million delayed draw term loan agreement on March 19, according to an 8-K filed with the Securities and Exchange Commission.

The delayed draw term loan was obtained in connection with Steris’ proposed acquisition of Cantel Medical Corp. and will be funded upon consummation of the acquisition. The proceeds are expected to be used, together with the proceeds from other new debt, to fund the cash consideration of the purchase.

The companies, each as borrower and guarantor, also obtained a $550 million five-year term loan and a $1.25 billion five-year revolving credit facility.

All of the lenders under the delayed draw term loan are also lenders under the company’s term loan and revolving credit agreement.

JPMorgan Chase Bank, NA, BofA Securities, Inc., Citibank, NA and PNC Capital Markets LLC are the joint lead arrangers and joint bookrunners for the delayed draw term loan and term loan with JPMorgan as administrative agent and BofA, Citibank and PNC Capital as syndication agents.

JPMorgan, BofA, Citibank and PNC Bank, NA are the joint lead arrangers and joint bookrunners for the revolver with JPMorgan as administrative agent and BofA, Citibank and PNC Bank as syndication agents.

Delayed draw loan

The $750 million delayed draw term loan matures five years after the acquisition closing date.

The loan will bear interest at Libor plus 100 basis points to 200 bps based on debt ratings.

No principal payments are due for the first year. Quarterly principal payments equal to 1.25% of the original principal amount are due in the next two years. At year four until maturity, quarterly principal payments of 1.875% of the original principal amount are due.

Term loan

The $550 million five-year term loan replaces an existing term loan agreement originating March 23, 2018.

The term loan will bear interest at Libor plus 100 bps to 200 bps, depending on debt ratings.

No principal payments are due for one year. Quarterly payments of 1.25% of the original principal amount are due for the following two years. And from year four until maturity, principal payments in the amount of 1.875% each, are due quarterly.

Revolver

The companies also entered into a $1.25 billion revolver that replaces the revolver under the 2018 credit agreement. The proceeds will be used to refinance the existing credit agreement, at the option of Steris, to finance the acquisition and for other general corporate purposes and working capital needs.

The revolver may be increased in some cases by up to $625 million at the discretion of the lenders.

The revolver includes a $100 million sublimit for swingline loans and a $150 million sublimit for letters of credit. There is also $500 million sublimit for loans denominated in other currencies, with the amount of Swedish kronor-denominated loans capped at the equivalent of $100 million.

Borrowings will bear interest at Libor plus 90 bps to 175 bps, based on ratings.

Steris is a Mentor, Ohio-based maker of contamination control and surgical support products.

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