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): February 22, 2020
NUVASIVE, INC.
(Exact name of registrant as specified in its charter)
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Delaware | | 000-50744 | | 33-0768598 |
(State or Other Jurisdiction of Incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification Number) |
7475 Lusk Boulevard, San Diego, California 92121
(Address of principal executive offices) (Zip Code)
(858) 909-1800
(Registrant’s telephone number, including area code)
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)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Common Stock, par value $0.001 per share | | NUVA | | The Nasdaq Stock Market LLC (Nasdaq Global Select Market) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. |
On February 24, 2020, NuVasive, Inc. (the “Company”) and certain of its material subsidiaries, as guarantors, entered into a Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) with Bank of America, N.A., as administrative agent, and the other lenders party thereto, evidencing a revolving senior credit facility (the “Facility”) that provides for secured revolving loans, multicurrency loan options and letters of credit in an aggregate amount of up to $550.0 million. The Second Amended and Restated Credit Agreement amends and restates the Amended and Restated Credit Agreement, dated as of April 25, 2017, among the Company, Bank of America, N.A., and the other lenders party thereto (the “Prior Credit Agreement”), such that the terms and conditions of the Prior Credit Agreement have been replaced in their entirety by the terms and conditions of the Second Amended and Restated Credit Agreement.
The Second Amended and Rested Credit Agreement includes changes from the Prior Credit Agreement including, among others, an increase in the expansion feature to $275 million, a netting of certain cash amounts from the consolidated total leverage ratio, an unsecured debt basket of $650 million and an increase in flexibility to make intercompany and third party investments.
Similar to the Prior Credit Agreement, the Second Amended and Restated Credit Agreement contains an expansion feature, which allows the Company to increase the aggregate principal amount of the Facility, provided the Company remains in compliance with the underlying financial covenants on a pro forma basis, including but not limited to, compliance with the consolidated interest coverage ratio and certain consolidated leverage ratios. The Facility matures on February 24, 2025 (subject to an earlier springing maturity date), and includes a sublimit of $50.0 million for standby letters of credit, a sublimit of $250.0 million for multicurrency borrowings, and a sublimit of $5.0 million for swingline loans. All assets of the Company and its material domestic subsidiaries continue to be pledged as collateral under the Facility (subject to customary exceptions) pursuant to the terms set forth in the Second Amended and Restated Security and Pledge Agreement (the “Second Amended and Restated Security Agreement”) executed in favor of the administrative agent by the Company. Each of the Company’s material domestic subsidiaries guarantee the Facility. Borrowings under the Facility are used by the Company to provide financing for working capital and other general corporate purposes, including potential mergers and acquisitions and to refinance indebtedness.
Borrowings under the Facility bear interest, at the Company’s option, at a rate equal to an applicable margin plus: (a) the applicable Eurocurrency Rate (as defined in the Second Amended and Restated Credit Agreement), or (b) a base rate determined by reference to the highest of (1) the federal funds effective rate plus 0.50%, (2) the Bank of America prime rate, and (3) the Eurocurrency Rate for an interest period of one month plus 1.00%. The margin for the Facility ranges, based on the Company’s consolidated total net leverage ratio, from 0.00% to 0.75% in the case of base rate loans and from 1.00% to 1.75% in the case of Eurocurrency Rate loans. The Facility includes an unused line fee ranging, based on the Company’s consolidated total net leverage ratio, from 0.20% to 0.35% per annum on the revolving commitment.
The terms of the Facility include certain affirmative and negative covenants as set forth in the Second Amended and Restated Credit Agreement, that, among other things, may restrict the Company’s ability to: create liens on assets; incur additional indebtedness; make investments; make acquisitions and other fundamental changes; sell and dispose of property or assets; pay dividends and other distributions; change the business conducted; engage in certain transactions with affiliates; enter into burdensome agreements; limit certain use of proceeds; amend organizational documents; change accounting policies or reporting practices; modify or terminate documents related to certain indebtedness; enter into sale and leaseback transactions; fund any person or business that is the subject of sanctions; and use proceeds for any breach of anti-corruption laws. The Second Amended and Restated Credit Agreement also requires the Company to satisfy certain reporting and financial covenants, such as maintaining a consolidated interest coverage ratio and consolidated leverage ratios, which are measured on a quarterly basis.
The Second Amended and Restated Credit Agreement contains certain representations and warranties and events of default, including, among other things, nonpayment of principal, interest, fees or other amounts; failure to perform or observe covenants, any representation or warranty proving to have been incorrect when made or confirmed in any material respect; cross-default to other indebtedness in an amount more than $30.0 million; bankruptcy and insolvency defaults (with a grace period for involuntary proceedings); inability to pay debts as they become due (with a grace period); monetary judgment defaults in an amount exceeding $50.0 million and material nonmonetary judgment defaults, subject to certain exceptions; customary ERISA events; actual or asserted invalidity or impairment of the loan documents associated with the Facility; any collateral document related to the Facility ceases to create a valid and perfected lien on a material portion of such collateral; and change of control of the Company.
As of February 25, 2020, the Company had no outstanding borrowings under the Facility.
The foregoing is a summary description of certain terms of the Facility and does not purport to be complete, and it is qualified in its entirety by reference to the full text of the Second Amended and Restated Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and the Second Amended and Restated Security Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K, each of which is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
On February 24, 2020, the Company and certain of its material subsidiaries, as guarantors, entered into a the Second Amended and Restated Credit Agreement with Bank of America, N.A., as administrative agent, and the other lenders party thereto.
The information set forth in Item 1.01 of this Current Report on Form 8-K related to the Second Amended and Restated Credit Agreement is incorporated by reference into this Item 2.03.
On February 26, 2020, the Company announced a proposed offering of $450 million aggregate principal amount of Convertible Senior Notes due 2025 (the “Notes”) in a private offering to qualified institutional buyers that is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance upon Rule 144A under the Securities Act. In addition, the Company announced its intention to enter into privately negotiated convertible note hedge transactions and warrant transactions in connection with the offering of the Notes with one or more dealers, which may include the initial purchasers of the Notes and/or their respective affiliates (together, the “Convertible Note Hedge and Warrant Transactions”). The Company’s press release announcing the launch of the offering of the Notes and potential Convertible Note Hedge and Warrant Transactions, as well as the expected use of proceeds thereof, is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
On February 22, 2020, the Company’s Board of Directors approved an increase in the size of the Company’s previously announced stock repurchase program and an extension of the program repurchase period. The Board had previously authorized a program to purchase up to $100.0 million of the Company’s common stock over a three-year period ending October 2020. The Company is now authorized to purchase up to $150.0 million of the Company’s common stock through December 31, 2021. Under this program, the Company may repurchase stock from time to time, in amounts, at prices, and at such times the Company deems appropriate, subject to market conditions, legal requirements and other considerations.
| Item 9.01. | Financial Statements and Exhibits. |
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| | 10.1 | | | Second Amended and Restated Credit Agreement, dated as of February 24, 2020, by and among the Company, certain material subsidiaries of the Company, as guarantors, Bank of America, N.A. and each of those additional Lenders that are a party to such agreement. |
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| | 10.2 | | | Second Amended and Restated Security Agreement, dated as of February 24, 2020, by and among the Company, certain material subsidiaries of the Company, as guarantors, and Bank of America, N.A. |
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| | 99.1 | | | Press Release of NuVasive, Inc., dated February 26, 2020. |
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| | 104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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.
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NUVASIVE, INC. |
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By: | | /s/ Matthew K. Harbaugh |
| | Matthew K. Harbaugh |
| | Executive Vice President and Chief Financial Officer |
Date: February 26, 2020
