| Item 1.01 | Entry into a Material Definitive Agreement. |
On May 6, 2021, MKS Instruments, Inc., a Massachusetts corporation (the “Company”), entered into Amendment No. 7 to Term Loan Credit Agreement (the “Term Loan Agreement Amendment”), by and among the Company, the other loan parties party thereto, each lender party thereto and Barclays Bank PLC (“Barclays”), as administrative agent, which amends the Term Loan Credit Agreement, dated as of April 29, 2016, by and among the Company, the lenders party thereto from time to time, and Barclays, as administrative agent and collateral agent for the lenders (as amended from time to time, including by Amendment No. 1, dated June 9, 2016, Amendment No. 2, dated December 14, 2016, Amendment No. 3, dated July 6, 2017, Amendment No. 4, dated April 11, 2018, Amendment No. 5, dated February 1, 2019, Amendment No. 6, dated September 27, 2019, and the Term Loan Agreement Amendment, the “Term Loan Credit Agreement”). The Term Loan Agreement Amendment makes certain changes to the Term Loan Credit Agreement, including, among other things, (i) increasing the Company’s capacity to elect to incur additional incremental debt facilities without further consent by the Required Lenders (as defined in the Term Loan Agreement Amendment) by (x) increasing the fixed-dollar cap for incremental debt facilities from $250 million to the greater of $600 million and Consolidated EBITDA (as defined in the Term Loan Agreement Amendment) for the most recently ended four fiscal quarter period as of the date of incurrence of such incremental debt facilities and (y) increasing the consolidated secured leverage ratio test for additional incremental debt facilities from 2.75x to 3.25x, (ii) allowing the Company to reclassify the incurrence of incremental debt facilities between the fixed dollar and ratio-based baskets, subject to compliance with the consolidated secured leverage ratio test, and (iii) increasing the Company’s flexibility under certain debt, lien, investment, restricted payment and disposition baskets.
Also on May 6, 2021, the Company entered into Amendment No. 2 to ABL Credit Agreement (the “ABL Agreement Amendment”), dated as of February 1, 2019, by and among the Company, the other loan parties party thereto, each lender party thereto and Barclays, as administrative agent, which amends the ABL Credit Agreement, dated as of February 1, 2019, by and among the Company, the other borrowers party thereto, the lenders and letters of credit issuers from time to time party thereto and Barclays, as administrative agent and collateral agent for the lenders (as amended from time to time, including by Amendment No. 1, dated April 26, 2019, and the ABL Agreement Amendment, the “ABL Credit Agreement”). The ABL Agreement Amendment makes certain changes to the ABL Credit Agreement, including, among other things, increasing the Company’s flexibility under certain debt, lien, investment, restricted payment and disposition baskets.
In connection with the Term Loan Agreement Amendment, the Company paid certain customary lender consent fees upon the effectiveness of the Term Loan Agreement Amendment. In addition, in connection with each of the Term Loan Agreement Amendment and the ABL Agreement Amendment, the Company will reimburse fees and expenses of Barclays in its capacity as administrative agent.
The foregoing descriptions of the Term Loan Agreement Amendment and the ABL Agreement Amendment do not purport to be complete and are qualified in their entirety by reference to the full text of the Term Loan Agreement Amendment and the ABL Agreement Amendment, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
On May 10, 2021, the Company issued a press release announcing that it has entered into a definitive agreement pursuant to which the Company will acquire Photon Control Inc. (“Photon Control”) for CAD$3.60 per share, in an all-cash transaction valued at approximately CAD$387 million. The transaction is subject to customary closing conditions, including approval by Photon Control’s securityholders and court approval in the Province of British Columbia, Canada, and is expected to close in the third quarter of 2021.
