UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 30, 2017
LANTHEUS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36569 | 35-2318913 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
331 Treble Cove Road
North Billerica, Massachusetts 01862
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: (978) 671-8001
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry into a Material Definitive Agreement |
On March 30, 2017, our wholly-owned subsidiary Lantheus Medical Imaging, Inc. (“LMI”) refinanced its existing indebtedness with a new term loan facility and a new revolving credit facility (collectively, these transactions are referred to as the “Refinancing”).
In order to consummate the Refinancing, LMI entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) by and among JPMorgan Chase Bank, N.A., as administrative agent (in that capacity, the “Administrative Agent”) and collateral agent, each of the lenders from time to time party thereto (the “Lenders”) and Lantheus Holdings, Inc. (the “Company”). The Credit Agreement (i) amends and restates LMI’s existing $365.0 million seven-year term loan agreement (the facility thereunder, the “Old Term Facility”) and replaces it with a new five-year $275.0 million term loan facility (the “New Term Facility” and, the loans thereunder, the “Term Loans”), and replaces Credit Suisse AG, Cayman Islands Branch, as administrative agent, with the Administrative Agent and (ii) replaces the previous $50.0 million five-year asset based loan facility (the “Old ABL Facility”) with a new $75.0 million five-year revolving credit facility (the “New Revolving Facility” and, together with the New Term Facility, the “New Facility”).
The net proceeds of the New Term Facility, together with approximately $15.3 million of cash on hand, were used to refinance in full the aggregate remaining principal amount of the loans outstanding under the Old Term Facility and pay related interest, transaction fees and expenses. No amounts were outstanding under the Old ABL Facility.
New Term Facility
The Term Loans under the New Term Facility bear interest, with pricing based from time to time at LMI’s election at (i) LIBOR plus a spread of 4.50% or (ii) the Base Rate (as defined in the Credit Agreement) plus a spread of 3.50%. The Term Loans were issued at an original issue discount of 99.75%. The New Term Facility amortizes at 1% per year until its June 30, 2022 maturity date.
LMI is permitted to voluntarily prepay the Term Loans, in whole or in part, subject to a 1.00% prepayment premium applicable if, during the first 6 months of the New Term Facility, LMI makes any prepayment of the Term Loans in connection with a repricing transaction (as defined in the Credit Agreement). The New Term Facility requires LMI to make mandatory prepayments of the outstanding Term Loans in certain circumstances.
LMI has the right to request an increase to the New Term Facility or request the establishment of one or more new incremental term loan facilities, in an aggregate principal amount of up to $75.0 million, plus additional amounts in certain circumstances (collectively, the “Incremental Cap”).
New Revolving Facility
Under the terms of the New Revolving Facility, the Lenders thereunder may extend credit to LMI from time to time until March 30, 2022 (the “Revolving Termination Date”) consisting of revolving loans (the “Revolving Loans” and, together with the Term Loans, the “Loans”) in an aggregate principal amount not to exceed $75.0 million (the “Revolving Commitment”) at any time outstanding. The New Revolving Facility includes a $20.0 million sub-facility for the issuance of letters of credit (the “Letters of Credit”). The Letters of Credit and the borrowings under the New Revolving Facility are expected to be used for working capital and other general corporate purposes. The New Revolving Facility terminates on the Revolving Termination Date.
The Revolving Loans under the New Revolving Facility bear interest, with pricing based from time to time at LMI’s election at (i) LIBOR plus a spread of 3.50% or (ii) the Base Rate (as defined in the Credit Agreement) plus a spread of 2.50%. The New Revolving Facility also includes an unused line fee, which is set at 0.375% while LMI’s secured leverage ratio (as defined in the Credit Agreement) is greater than 3.00 to 1.00 and 0.25% when LMI’s secured leverage ratio is less than or equal to 3.00 to 1.00.
LMI is permitted to voluntarily prepay the Revolving Loans, in whole or in part, or reduce or terminate the Revolving Commitment, in each case, without premium or penalty. On any business day on which the total amount of outstanding Revolving Loans and Letters of Credit exceeds the total Revolving Commitment, LMI must prepay the Revolving Loans in an amount equal to such excess.
LMI has the right to request an increase to the Revolving Commitment in an aggregate principal amount of up to the Incremental Cap.
Other Terms
The New Facility contains a number of affirmative, negative and reporting covenants, as well as a financial maintenance covenant pursuant to which LMI is required to, among other things, be in quarterly compliance, measured on a trailing four quarter basis, with a consolidated leverage ratio (as defined in the Credit Agreement) of 5.00 to 1.00 through the quarter ending March 31, 2018, 4.75 to 1.00 through the quarter ending March 31, 2019 and 4.50 to 1.00 thereafter. Upon an event of default, the Administrative Agent will have the right to declare the Loans and other obligations outstanding immediately due and payable and all commitments immediately terminated or reduced.
The New Facility is guaranteed by the Company and Lantheus MI Real Estate, LLC (“LMI-RE”), and obligations under the New Facility are generally secured by first priorities liens over substantially all of the assets of each of the LMI, the Company and LMI-RE owned as of March 30, 2017 or thereafter acquired.
Certain of the Lenders and certain of their affiliates have performed investment banking, commercial lending and underwriting services for the Company, LMI, their subsidiaries and their respective affiliates, from time to time, for which they have received customary fees and expenses. These parties may, from time to time, engage in transactions with, and perform services for the Company, LMI, their subsidiaries or their respective affiliates in the ordinary course of their business.
| Item 1.02 | Termination of a Material Definitive Agreement. |
In connection with the Refinancing, effective as of March 30, 2017, LMI has satisfied and discharged all obligations, under, and terminated, the Old ABL Facility, except for obligations that pursuant to the express terms of the Old ABL Facility survive payment of the obligations.
The Old ABL Facility consisted of a $50.0 million five-year asset based loan facility that was scheduled to mature on June 30, 2020. As of March 30, 2017, there were no amounts outstanding under the Old ABL Facility, and LMI incurred no termination penalties in connection with the early termination of the Old ABL Facility.
Certain of the lenders under the Old ABL Facility and certain of their affiliates have performed investment banking, commercial lending and underwriting services for the Company, LMI, their subsidiaries and their respective affiliates, from time to time, for which they have received customary fees and expenses. These parties may, from time to time, engage in transactions with, and perform services for the Company, LMI, their subsidiaries or their respective affiliates in the ordinary course of their business.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 is incorporated by reference into this Item 2.03.
| Item 8.01 | Other Events |
A copy of the Company’s press release, dated March 30, 2017, announcing the closing of the Refinancing is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
| Exhibit No. |
Description | |
| 99.1 | Press release of Lantheus Holdings, Inc., dated March 30, 2017. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LANTHEUS MEDICAL IMAGING, INC. | ||
| By: | /s/ Michael P. Duffy | |
| Name: | Michael P. Duffy | |
| Title: | Senior Vice President, General Counsel and Secretary | |
Date: March 30, 2017
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Press release of Lantheus Holdings, Inc., dated March 30, 2017. | |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Lantheus Announces Refinancing of its Debt Facility
Increases available liquidity; positive impact on cash flow projected to be approximately $5 million per year
NORTH BILLERICA, Mass., March 30, 2017 – Lantheus Holdings, Inc. (NASDAQ: LNTH), parent company of Lantheus Medical Imaging, Inc. (collectively, “Lantheus” or “the Company”), today announced the closing of a new $275 million term loan facility (the “new term loan”) and a new $75 million five-year cash-flow revolver facility (the “CFR”).
Net proceeds from the new term loan, together with approximately $15 million of cash on hand, were used to retire the remaining outstanding principal balance on the Company’s previous $365 million term loan facility and pay accrued interest and related fees and expenses attributable to the transaction.
The new term loan has an interest rate of LIBOR + 4.50% and retains the prior term loan’s maturity date of June 2022 as well as its 1% mandatory amortization per year, adjusted to reflect the new principal amount. The new term loan was issued at an original issue discount of 99.75%.
The CFR is priced at LIBOR + 3.50% and replaces the $50 million asset backed loan (“ABL”) facility, which was undrawn at the time of closing of the refinancing. The CFR carries the same 0.375% unused line fee as the ABL and has an extended maturity date of March 2022. Funds available under the CFR may be used for working capital and other general corporate purposes.
“We remain committed to enhancing the Company’s capital structure,” commented Jack Crowley, Chief Financial Officer of Lantheus. “This transaction improves our credit profile, provides additional liquidity and gives the flexibility needed to effectively capitalize upon our strategic initiatives. As of closing, our leverage ratio continues to improve, and we believe the reduction in interest rate and amortization payments will provide a positive impact on cash flow of approximately $5 million per year over the life of the facility.”
The transaction was led by JPMorgan Chase Bank, N.A., with Citizens Bank, N.A. and Wells Fargo Securities, LLC acting as joint lead arrangers.
About Lantheus Holdings, Inc. and Lantheus Medical Imaging, Inc.
Lantheus Holdings, Inc. is the parent company of Lantheus Medical Imaging, Inc. (“LMI”), a global leader in the development, manufacture and commercialization of innovative diagnostic imaging agents and products. LMI provides a broad portfolio of products, including the echocardiography contrast agent DEFINITY® Vial for (Perflutren Lipid Microsphere) Injectable Suspension; TechneLite® (Technetium Tc99m Generator), a technetium-based generator that provides the essential medical isotope used in nuclear medicine procedures; and Xenon (Xenon Xe 133 Gas), an inhaled radiopharmaceutical imaging agent used to evaluate pulmonary function and for imaging the lungs. The Company is
headquartered in North Billerica, Massachusetts with offices in Puerto Rico and Canada. For more information, visit www.lantheus.com.
Safe Harbor for Forward-Looking and Cautionary Statements
This press release contains “forward-looking statements” as defined under U.S. federal securities laws. Forward-looking statements may be identified by their use of terms such as anticipate, believe, confident, could, should, estimate, expect, intend, may, plan, predict, project, target, will and other similar terms. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to materially differ from those described in the forward- looking statements. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. Risks and uncertainties that could cause our actual results to materially differ from those described in the forward-looking statements are discussed in our filings with the Securities and Exchange Commission (including those described in the Risk Factors section in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q).
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CONTACTS:
Investors
Gary Santo
Head of Capital Markets & Investor Relations
978-671-8960
Media
Meara Murphy
Director, Investor Relations & Corporate Communications
978-671-8508