Business Context and Reporting Period
Company: The Clorox Company (CLX)
Filing Type: Form 8-K (Current Report)
Date of Report: March 6, 2026
Event: Entry into material definitive credit agreements to finance the acquisition of GOJO Industries, Inc. (maker of PURELL®).
Key Financial Metrics and Debt Structure
This filing details the establishment of new debt facilities rather than reporting operational financial results (revenue, profit, or cash flow). The key financial metrics relate to the new credit facilities:
- 364-Day Revolving Credit Agreement: $1,000,000,000 facility for general corporate purposes.
- Delayed Draw Term Credit Agreement: $1,250,000,000 facility intended to finance a portion of the GOJO acquisition consideration, related fees, and repayment of GOJO indebtedness.
- Total New Credit Capacity: $2,250,000,000.
- Debt Classification: Senior unsecured and unguaranteed indebtedness.
- Interest Rate Basis: Borrowings available in U.S. dollars based on Base Rate or Term SOFR plus an applicable margin tied to the Company's credit rating.
Material Changes and Covenants
The primary material change is the incurrence of significant new debt obligations to facilitate the GOJO acquisition. Key terms include:
- Financial Covenants: Both agreements contain a single financial covenant: a consolidated interest coverage ratio.
- Commitment Reduction: Commitments under the 364-Day Revolving Credit Agreement will automatically and permanently reduce by the amount of net cash proceeds from future debt or equity issuances (subject to exceptions) 90 days after receipt, provided the Delayed Draw Term Credit Agreement is fully terminated.
- Maturities:
- 364-Day Revolver: Available until March 5, 2027 (with an option to convert to a term loan maturing March 5, 2028).
- Delayed Draw Term Loan: Loans mature on March 5, 2027; commitments terminate by December 31, 2026, or upon acquisition consummation/termination.
- Restrictions: Standard negative covenants restricting liens, consolidations, mergers, and asset sales.
Outlook, Risks, and Management Commentary
Management Commentary: The Company entered these agreements specifically to fund the purchase of all issued and outstanding membership interests of GOJO Industries, Inc.
Risks and Contingencies:
- Events of Default: Include nonpayment, covenant defaults, breaches of representations, bankruptcy, insolvency, cross defaults, and change of control.
- Prepayment Triggers: Net cash proceeds from future debt or equity issuances may trigger automatic prepayment or commitment reduction.
- Acquisition Dependency: The Delayed Draw Term Credit Agreement is contingent on the closing of the GOJO acquisition and satisfaction of customary closing conditions.
Investor Verification Checklist
- Verify the final purchase price and total consideration for the GOJO Industries acquisition to assess the adequacy of the $2.25 billion credit facility.
- Review the specific "consolidated interest coverage ratio" thresholds in the attached Credit Agreements (Exhibits 10.1 and 10.2) to understand covenant compliance risks.
- Monitor the Company's credit rating, as interest margins and facility fees fluctuate based on this rating.
- Confirm whether the Delayed Draw Term Credit Agreement is fully drawn or if the Company utilizes alternative financing sources for the acquisition.
- Assess the impact of the new debt load on the Company's overall leverage and liquidity position post-acquisition.