Item 7.01 Regulation FD Disclosure.
On November 7, 2018, Bausch Health Companies Inc. (the “Company”) announced that it is seeking to enter into an incremental term loan facility amendment to its existing credit agreement, pursuant to which Valeant Pharmaceutical International (“VPI”), a Delaware corporation and an indirect wholly-owned subsidiary of the Company, is expected to borrow $750 million of new term loans (the “New Term B Loans”) and that VPI is expected to issue up to $750 million of secured debt securities (the “New Notes”), subject to market conditions.
The Company is disclosing under Item 7.01 of this Current Report on Form8-K certain information provided to its lenders in connection with the New Term B Loans. Certain recent divestitures, including the sale of the Company’s Sprout Pharmaceuticals, Inc. and Obagi Medical Products, Inc. businesses (which were completed on December 20, 2017 and November 9, 2017, respectively), had the effect of increasing adjusted EBITDA by approximately $10 million for the twelve months ended September 30, 2018.
To supplement the disclosure of our financial measures prepared in accordance with GAAP, we use certainnon-GAAP financial measures, including Adjusted EBITDA. Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, as further adjusted to exclude certainnon-recurring and/or unusual items. The Company does not provide reconciliations of Adjusted EBITDA(non-GAAP) to GAAP net income (loss) for the assets described above because they were parts of larger businesses of the registrant and were not managed on a GAAP basis. We believe thesenon-GAAP measures are useful to investors in their assessment of our operating performance. In addition, thesenon-GAAP measures address questions we routinely receive from analysts and investors and, in order to ensure that all investors have access to similar data, we have determined that it is appropriate to make this data available to all investors. However,non-GAAP financial measures are not prepared in accordance with GAAP, as they exclude certain items as described above. Therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, measures calculated in accordance with GAAP.
The information contained in this Item 7.01 is being furnished, not filed, pursuant to Item 7.01. Accordingly, this information will not be incorporated by reference into any registration statement filed by the Company under the Securities Act, unless specifically identified therein as being incorporated by reference.
Item 8.01 Other Events.
Credit Agreement Amendment
On November 7, 2018, the Company issued a press release relating to the New Term B Loans. The net proceeds of the New Term B Loans to be drawn under the incremental term loan facility amendment and from the issuance of the New Notes, along with cash on hand, are expected to be used to refinance the Company’s outstanding 7.500% Senior Notes due 2021 (the “Old Notes”).
The press release was issued pursuant to Rule 135c under the Securities Act of 1933, as amended (the “Securities Act”), relating to the offering of the New Notes. In accordance with Rule 135c(d) under the Securities Act, a copy of the press release is attached hereto as Exhibit 99.1 to this Current Report on Form8-K, which is incorporated herein by reference.
The foregoing is qualified by reference to the press release that is attached as Exhibit 99.1 to this Current Report on Form8-K, which is incorporated herein by reference.
This Current Report on Form8-K and the press release attached hereto as Exhibit 99.1 does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any offer, solicitation or sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. These securities will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. The New Notes have not been and will not be qualified for sale to the public by prospectus under applicable Canadian securities laws and, accordingly, any offer and sale of the securities in Canada will be made on a basis which is exempt from the prospectus requirements of such securities laws.
