13 December 2021
II-VI Inc completes $990m offering of notes
Engineered materials and optoelectronic component maker II-VI Inc of Saxonburg, PA, USA has completed its offering of $990m aggregate principal amount of 5.000% senior notes due 2029 in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended. The notes are guaranteed by each of the company’s domestic subsidiaries that guarantee its existing credit agreement.
The notes are unsubordinated, unsecured obligations of the company and bear interest at a rate of 5.000% per year. The firm will pay interest on the notes on 15 December and 15 June of each year, commencing 15 June 2022. The notes will mature on 15 December 2029.
The firm also says that the lead arrangers for its proposed senior secured credit facilities have allocated and priced its $850m term loan A credit facility, $2800m term loan B credit facility, and $350m revolving credit facility. The term A facility and revolving credit facility borrowings in US dollars will each bear interest at LIBOR (subject to a 0.00% floor) plus a range of 1.75-2.50%, depending on the firm’s total net leverage ratio. The term A facility and the revolving credit facility borrowings are initially expected to bear interest at LIBOR plus 2.00%. The term loan B facility will bear interest at LIBOR (subject to a 0.50% floor) plus 2.75%.
II-VI intends to borrow the term facilities in connection with the closing of its pending business combination with Coherent Inc of Santa Clara, CA (which provides lasers and laser-based technology for scientific, commercial and industrial applications), pursuant to an agreement and plan of merger of 25 March, by and among the company, Coherent and Watson Merger Sub Inc (a subsidiary of the company).
The revolving credit facility is expected to be available concurrently with the closing of the acquisition. II-VI intends to use the proceeds from the offering of the notes and the term facilities, together with other financing sources and cash on hand to fund the cash consideration, the repayment of certain indebtedness and certain fees, and expenses in connection with the acquisition.