Cencora, Inc. Secures Term Loan Facility and Revolving Credit Facility for Retina Consultants of America Acquisition

Cencora, Inc. has recently announced the entry into a Term Credit Agreement for the proposed acquisition of Retina Consultants of America, according to a Form 8-K filing with the Securities and Exchange Commission on November 26, 2024. The Term Credit Agreement involves a senior unsecured term facility of $1.5 billion, which will mature three years from the date the Term Loan is drawn under the Agreement, also known as the Closing Date.

The funding from the Term Loan will be utilized to fulfill a portion of the cash consideration for the acquisition and to cover expenses related to it, subject to closing conditions like the consummation of the Acquisition. The Term Loan comes with interest rates based on the Company’s public debt ratings, with margins over the adjusted Term SOFR rate or an alternate base rate. Furthermore, an undrawn commitment fee will begin accruing on the unused commitments under the Term Credit Agreement commencing March 5, 2025.

Moreover, Cencora, Inc. has entered into a Credit Agreement for a $1.0 billion senior unsecured revolving credit facility known as the Revolving Credit Facility, which will be available post the Closing Date and will mature 364 days after that, with the option for an extension. Borrowings under this facility will also bear interest rates based on the Company’s public debt ratings.

The Term Credit Agreement and Revolving Credit Facility come with certain affirmative and negative covenants, including restrictions on indebtedness of subsidiaries, liens, fundamental changes, and a financial leverage ratio compliance requirement not to exceed 3.75 to 1.00. The covenants in these agreements are akin to those in the Company’s existing $2.4 billion multi-currency senior unsecured revolving credit facility.

It was disclosed that in connection with the Acquisition, the Company had secured $3.3 billion in bridge financing commitments, with $1.5 billion being offset by the Term Credit Agreement, leading to $1.8 billion in bridge financing commitments remaining.

Disclaimer: The above description of the Term Credit Agreement and Revolving Credit Facility is not exhaustive, and the complete terms are detailed in Exhibit 10.1 and Exhibit 10.2, respectively, of the Form 8-K filing made by Cencora, Inc.

Additionally, certain lenders under these facilities have affiliations with the Company and have provided or may provide investment banking, commercial banking, and financial advisory services in the past or future.

This filing was made under Item 2.03 of the Form 8-K, indicating the creation of direct financial obligations or obligations under off-balance sheet arrangements by the registrant, Cencora, Inc.

The Company’s efforts to secure financing facilities for the Acquisition highlight its strategic planning and commitment to expanding its operations in the designated market sector.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Cencora’s 8K filing here.

Cencora Company Profile

Cencora, Inc sources and distributes pharmaceutical products. The company's U.S. Healthcare Solutions segment distributes pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, and other customers; provides pharmacy management, staffing, and other consulting services; supply management software to retail and institutional healthcare providers; packaging solutions to various institutional and retail healthcare providers; clinical trial support, product post-approval, and commercialization support services; data analytics, outcomes research, and additional services for biotechnology and pharmaceutical manufacturers; pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and other products to the companion animal and production animal markets; and sales force services to manufacturers.