Business Context and Reporting Period
This Form 8-K is filed by Greatbatch, Inc. (not Integer Holdings Corp) on October 13, 2015. The report details a material definitive agreement and a Regulation FD disclosure regarding a proposed senior notes offering and an acquisition.
Key Financial Metrics and Transactions
- Senior Notes Offering: Proposed issuance of $360 million aggregate principal amount of senior notes due 2023.
- Acquisition Financing: Net proceeds from the notes are intended to fund the acquisition of Lake Region Medical Holdings, Inc. The total financing package includes:
- $200 million revolving credit facility.
- $375 million term loan A facility.
- $1,025 million term loan B facility.
- Spin-off: The company plans to spin off its QiG Group, LLC subsidiary (to be named Nuvectra Corporation), along with subsidiaries Algostim LLC, PelviStim, LLC, and NeuroNexus Technologies, Inc.
- Financial Statements: The filing references unaudited pro forma condensed combined financial information and historical consolidated financial statements for Accellent Inc. (Lake Region's subsidiary) for periods ending January 3, 2015, and December 31, 2013 and 2012.
Material Changes
On October 13, 2015, Greatbatch Ltd. entered into Amendment No. 2 to its Second Amended and Restated Credit Agreement. This amendment modifies existing covenants specifically to permit the proposed senior notes offering. No other material terms of the Credit Agreement were changed.
Outlook, Risks, and Management Commentary
- Offering Structure: The notes will be offered privately to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S.
- Pro Forma Limitations: Management notes that the unaudited pro forma financial information is for illustrative purposes only and does not necessarily indicate actual future operating results or financial condition.
- Legal Disclaimer: The information provided in this report and its exhibits is not deemed "filed" under Section 18 of the Exchange Act and does not constitute an offer to sell securities.
Investor Verification Checklist
- Verify the final terms and interest rate of the $360 million senior notes due 2023.
- Confirm the closing date and final purchase price for the acquisition of Lake Region Medical Holdings, Inc.
- Review the unaudited pro forma financial information (Exhibit 99.2) to assess the combined entity's leverage and liquidity post-transaction.
- Monitor the status of the spin-off of the QiG Group subsidiary and the formation of Nuvectra Corporation.
- Examine the specific covenant changes in Amendment No. 2 to the Credit Agreement (Exhibit 10.1).