Avanos Medical has left the New York Stock Exchange at $25.00 a share, and $675m of term loans was drawn against it on the closing day
Avanos Medical is no longer a listed company. Trading in its shares was suspended before the opening bell on Monday, and the 8-K recording why reached EDGAR at 16:05 on Thursday afternoon.
The buyer is A-AV Holdco I, Inc., which the filing states is affiliated with American Industrial Partners, described in the document as an operationally-oriented industrials investor. Each share outstanding immediately before the effective time was cancelled and converted into the right to receive $25.00 in cash, without interest. Avanos puts the aggregate merger consideration paid to stockholders at approximately $1,200 million, under a merger agreement dated 13 April.
The financing is agented by a private credit manager, not a bank
Item 1.01 is the part of this filing that repays reading twice.
On the closing date the merger subsidiary entered a credit agreement providing an initial term loan facility of $675.0 million, delayed draw term loan commitments of $100.0 million available for 24 months, and a priority revolving credit facility of $100.0 million. Golub Capital Markets LLC is term loan administrative agent and collateral agent. Ally Bank is revolving administrative agent, swingline lender and a letter of credit issuer. The initial term loans were borrowed on the closing date itself, and every loan matures on 27 July 2033.
The pricing is set out plainly. Term loans bear interest at a base rate or term SOFR plus a margin between 4.75 percent and 5.25 percent, stepping with the consolidated first lien net leverage ratio. The revolver runs at a base rate plus 2.50 percent or term SOFR plus 3.50 percent, with an unused commitment fee between 0.375 percent and 0.50 percent, and the undrawn delayed draw commitments carry a fee of 1.00 percent a year.
Set the term loan against the equity cheque. The $675.0 million drawn at closing is 56.25 percent of the $1,200 million paid to stockholders, arithmetic this desk performed on two figures the filing states rather than a ratio the filing gives. Avanos states only that the funds came from equity contributions received by Parent and from the proceeds of the debt financing, without splitting them.
The old bank facility went the same day
Concurrently with the closing, Avanos repaid all loans and terminated all commitments under the credit agreement dated 24 June 2022, under which JPMorgan Chase Bank was administrative agent.
Six directors out, the chief executive stays
Gary D. Blackford, Dr. Lisa Egbuonu-Davis, Indrani L. Franchini, Patrick J. O'Leary, David C. Pacitti and Julie Shimer all resigned from the board at the effective time, as the merger agreement required. Joel Rotroff, the sole director of the merger subsidiary, became a director of the surviving corporation and then resigned from it.
Pacitti was reappointed. He is a director of the surviving corporation and its President and Chief Executive Officer, alongside Scott M. Galovan as Chief Financial Officer and Treasurer and John S. Fischer, previously the company's head of legal, as General Counsel and Secretary. Every other officer serving before the effective time was removed.
The company has asked the New York Stock Exchange to file a Form 25 and says it intends to follow with a Form 15, which would suspend its reporting obligations. After that, the credit agreement described above stops being public.
