Item 1.01 Entry into a Material Definitive Agreement.
The information set forth in Item 8.01 below with respect to the Purchase Agreement (as defined below) is hereby incorporated by reference into this Item 1.01.
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 8.01 below with respect to the Notes and the Indenture (each as defined below) is hereby incorporated by reference into this Item 2.03, insofar as it relates to the creation of a direct financial obligation.
Item 8.01 Other Events.
Purchase Agreement
On August 9, 2021, Ecolab Inc. (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with J.P. Morgan Securities LLC, Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. LLC, as Representatives of the several initial purchasers (the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers $300,000,000 aggregate principal amount of its 2.750% Notes due 2055 (the “Notes”). The Purchase Agreement contains customary representations, warranties and covenants made by the Company. It also provides for customary indemnification by each of the Company and the Purchasers against certain liabilities and customary contribution provisions in respect of those liabilities.
On August 18, 2021, the Company completed the offering of the Notes, and the Notes were issued pursuant to an Indenture (the “Base Indenture”), dated January 12, 2015, between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as amended by the Tenth Supplemental Indenture, dated August 18, 2021 (the “Tenth Supplemental Indenture” and together with the Base Indenture, the “Indenture”), between the Company and the Trustee. The Notes were issued in a transaction exempt from registration under the Securities Act of 1933, as amended.
The Notes bear interest at a rate of 2.750% per annum, payable semi-annually in arrears on February 18 and August 18 of each year, beginning on February 18, 2022. The Notes will mature on August 18, 2055 and are redeemable at the Company’s option in whole at any time or in part from time to time, at the redemption prices specified in the Indenture.
Upon the occurrence of certain change of control events with respect to the Notes, as described in the Indenture, the Company will be required to offer to repurchase the Notes at a price equal to 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest to, but excluding, the date of repurchase.
The Indenture contains covenants that limit, among other things, the ability of the Company and its subsidiaries to incur liens on certain properties to secure debt, to engage in sale and leaseback transactions and to transfer certain property, stock or debt of any restricted subsidiary to any unrestricted subsidiary (each as defined in the Indenture).
The offering price of the Notes was 98.778% of the principal amount of the Notes. The Company received net proceeds (after deducting underwriting discounts and the Company’s offering expenses) of approximately $293 million and intends to use such net proceeds, together with available cash, to redeem its 2.375% Notes due 2022 and 3.250% Notes due 2023.
The above description of the Purchase Agreement, the Base Indenture, the Tenth Supplemental Indenture and the form of Notes is qualified in its entirety by reference to the Purchase Agreement, the Base Indenture, the Tenth Supplemental Indenture and the Notes, each of which is incorporated herein by reference and are included in this Current Report on Form 8-K as Exhibits 1.1, 4.1, 4.2 and 4.3, respectively.
In the ordinary course of their respective business, the Purchasers or their affiliates have performed from time to time, and may in the future perform, various investment banking, commercial lending, financial advisory and other services for the Company for which they received, or will receive, customary fees and expenses. An affiliate of the Trustee acted as a Purchaser in connection with the issuance of the Notes.
