ENVISION HEALTHCARE HOLDINGS,INC. (NYSE:EVHC) Files An 8-K Entry into a Material Definitive Agreement
Item1.01. Entry into a Material Definitive Agreement.
Term Loan Credit Agreement
On May25, 2011, the company formerly known as Envision Healthcare
Corporation (the Prior Envision Borrower), a wholly owned
subsidiary of Envision Healthcare Holdings, Inc. (Holdings) prior
to the consummation of the Mergers (as defined below), entered
into a Term Loan Credit Agreement (as amended from time to time,
the Term Loan Credit Agreement) with Deutsche Bank AG New York
Branch, as administrative agent and collateral agent, and the
other financial institutions and lenders from time to time party
thereto, providing for a senior secured term loan facility (the
Term Loan Facility). In connection with the consummation of the
Mergers, Envision Healthcare Corporation (formerly known as New
Amethyst Corp., the Company) became the Borrower (as defined in
the Term Loan Credit Agreement) under the Term Loan Facility. The
Term Loan Facility consists of a senior secured term loan credit
facility in the aggregate principal amount of up to $3,495
million. Immediately prior to the Mergers, on December1, 2016,
the Term Loan Facility was comprised of (i)a term loan tranche in
the aggregate principal amount of $1,266 million that was
scheduled to mature on May25, 2018 (the Initial Term Loans) and
(ii)a term loan tranche in the aggregate principal amount of $993
million that was scheduled to mature on November12, 2022 the (the
Tranche B-2 Term Loans). On December1, 2016, the Borrower entered
into a Seventh Amendment to Term Loan Credit Agreement (the
Seventh Amendment), to which it incurred a term loan tranche in
the aggregate principal amount of $3,495 million that matures on
December1, 2023 (the Tranche C Term Loans), made certain other
modifications to terms of the Term Loan Facility and JPMorgan
Chase Bank, N.A. replaced Deutsche Bank AG New York Branch as
administrative agent and collateral agent. The Term Loan Credit
Agreement provides the right for individual lenders to extend the
maturity date of their loans upon the request of the Borrower and
without the consent of any other lender. The proceeds of the
Tranche C Term Loans were used to repay in full the Initial Term
Loans and the Tranche B-2 Term Loans.
Subject to specified conditions, without the consent of the then
existing lenders (but subject to the receipt of commitments), the
Term Loan Facility may be expanded (or a new term loan facility
or revolving credit facility added) by up to (i)$1,300 million
plus (ii)an additional amount as will not cause the net first
lien leverage ratio after giving effect to the incurrence of such
additional amount to exceed 4.0:1.0, as calculated to the Term
Loan Facility.
The Tranche C Term Loans under the Term Loan Facility bear
interest initially at a rate equal to (i)LIBOR, plus 3.00%per
annum, or (ii)the alternate base rate, which will be the highest
of (w)the prime rate established by the administrative agent from
time to time, (x)0.50% in excess of the greater of (1)the
overnight federal funds rate or (2)the composite overnight
federal funds and overnight LIBOR rate, (y)the one-month LIBOR
rate (adjusted for maximum reserves) plus 1.0%per annum and
(z)1.75% per annum, plus, in each case, 2.00%per annum.
The Term Loan Facility contains customary representations and
warranties and customary affirmative and negative covenants. The
negative covenants contain limitations on the following, subject
to customary exceptions: the incurrence of additional
indebtedness; payment of dividends on, redemption or repurchase
of stock or making of other distributions in respect of our
capital stock; making investments; repurchase, prepayment or
redemption of junior indebtedness; agreeing to payment
restrictions affecting the ability of our restricted subsidiaries
to pay dividends to us or make other intercompany transfers;
incurrence of additional liens; transfer or sale of assets;
consolidation, merger, sale or other disposition of all or
substantially all of our assets; entering into certain
transactions with affiliates; designating any of our subsidiaries
as unrestricted subsidiaries; and making of negative pledges.
There are no financial covenants included in the Term Loan Credit
Agreement.
The foregoing description of the Seventh Amendment does not
purport to be a complete description and is qualified in its
entirety by reference to the full text thereof, which is attached
as Exhibit 10.1 to this report and is incorporated herein by
reference.
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ABL Credit Agreement
On May25, 2011, the Prior Envision Borrower entered into an ABL
Credit Agreement (as amended from time to time, the ABL Credit
Agreement) with Deutsche Bank AG New York Branch, as
administrative agent and collateral agent and the other financial
institutions and lenders from time to time party thereto,
providing for an asset-based revolving credit facility (the ABL
Facility and, together with the Term Loan Facility, the Credit
Facilities). In connection with completion of the Mergers, on
December1, 2016, the Company became and, at the option of the
Company, any of the Companys domestic wholly-owned subsidiaries
may be, a borrower (collectively, the ABL Borrower) under the ABL
Facility. On December1, 2016, the ABL Borrower entered into a
Third Amendment to ABL Credit Agreement (the Third Amendment), to
which all outstanding loans under the ABL Facility were repaid,
the ABL Facility was increased to provide for an asset-based
revolving credit facility in the amount of up to $850.0 million,
subject to borrowing base availability, and letter of credit and
swingline sub-facilities and JPMorgan Chase Bank, N.A. became
co-collateral agent. Amounts are available under the ABL Facility
in U.S. dollars. In addition, subject to certain terms and
conditions, the ABL Borrower is entitled to request additional
revolving credit commitments or term loans under the ABL
Facility, which share in the borrowing base, up to an amount such
that the aggregate amount of ABL commitments does not exceed
$1,350 million. The final maturity date of the ABL Facility is
December1, 2021. The ABL Credit Agreement provides the right for
individual lenders to extend the maturity date of their
commitments and loans upon the request of the ABL Borrower and
without the consent of any other lender.
The borrowing base is defined in the ABL Credit Agreement as, at
any time, the sum of (i)85% of the eligible accounts receivable
of each ABL Borrower and each guarantor (the A/R Amount); plus
(ii)the lesser of (x)50% of the lower of cost and fair market
value of the eligible inventory of the ABL Borrower and each
guarantor and (y)5% of the A/R Amount; plus (iii)the lesser of
(x)accounts receivable of the ABL Borrower and each guarantor
aged 180360 days that are otherwise eligible accounts receivable
and (y)5% of the A/R Amount; minus (iv)such availability reserves
as the administrative agent, in its permitted discretion, deems
appropriate at such time; minus (v)the outstanding principal
amount of any future term loans (if any) incurred to the ABL
Credit Agreement. As of October31, 2016, the borrowing base was
approximately $657 million.
The revolving credit loans under the ABL Facility bear interest
initially at a rate equal to (i)LIBOR plus, an applicable margin,
which shall be determined based on the average daily excess
availability, or (ii)the alternate base rate, which will be the
highest of (x)the prime rate established by the administrative
agent from time to time, (y)0.50% in excess of the greater of
(1)the overnight federal funds rate or (2)the composite overnight
federal funds and overnight LIBOR rate, (z)the one-month LIBOR
rate (adjusted for maximum reserves) plus 1.0%per annum, plus, in
each case, an applicable margin, which shall be determined based
on the average daily excess availability. The ABL Facility bears
a commitment fee that is payable quarterly in arrears, based on
the utilization of the ABL Facility, and customary letter of
credit fees.
The ABL Facility contains customary representations and
warranties and customary affirmative and negative covenants. The
negative covenants contain limitations on the following:
incurrence of additional indebtedness or issuance of certain
preferred shares; payment of dividends on, redemption or
repurchase of stock or making of other distributions in respect
of our capital stock; making investments; repurchase, prepayment
or redemption of junior indebtedness; agreeing to payment
restrictions affecting the ability of our restricted subsidiaries
to pay dividends to us or make other intercompany transfers;
incurrence of additional liens; transfer or sale of assets;
consolidation, merger, sale or other disposition of all or
substantially all of our assets; entering into certain
transactions with our affiliates; designation of any of our
subsidiaries as unrestricted subsidiaries; and making of negative
pledges. The negative covenants are subject to the customary
exceptions and also permit the payment of dividends and
distributions, investments, permitted acquisitions, payments or
redemptions of junior indebtedness, asset sales and mergers,
consolidations and sales of all or substantially all assets
involving subsidiaries upon satisfaction of a payment condition.
The payment condition is deemed satisfied upon 30-day specified
availability and specified availability exceeding agreed upon
thresholds and, in certain cases, the absence of specified events
of default or known events of default and pro forma compliance
with a fixed charge coverage ratio of 1.0 to 1.0.
There are no financial covenants included in the ABL Credit
Agreement, other than a springing minimum fixed charge coverage
ratio of at least 1.0 to 1.0, which is tested only when specified
availability is less than the greater of (A)$85 million and
(B)10.0% of the lesser of (x)the then applicable borrowing base
and (y)the then total effective commitments under the ABL
Facility, and continuing until such time as specified
availability has been in excess of such threshold for a period of
30 consecutive calendar days.
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The foregoing description of the Third Amendment does not purport
to be a complete description and is qualified in its entirety by
reference to the full text thereof, which is attached as Exhibit
10.2 to this report and is incorporated herein by reference.
Supplemental Indentures to the Envision 2022 Indenture
On June18, 2014, the Prior Envision Borrower issued $750 million
aggregate principal amount of its 5.125% senior unsecured notes
due 2022 (the Envision 2022 Notes). The Envision 2022 Notes were
issued to the Indenture, dated as of June18, 2014 (as
supplemented from time to time, the Envision 2022 Indenture),
among the Prior Envision Borrower, certain of its domestic
subsidiaries (the Envision Guarantors) and Wilmington Trust,
National Association, as trustee (the Trustee). On November30,
2016, the Prior Envision Borrower entered into a sixth
supplemental indenture (the Sixth Supplemental Indenture) with
the additional Subsidiary Guarantors (as defined therein) party
thereto and the Trustee, to which the Subsidiary Guarantors
guaranteed the Envision 2022 Notes. On December1, 2016, in
connection with the Mergers, Envision Healthcare Intermediate
Corporation (Intermediate) entered into a seventh supplemental
indenture (the Seventh Supplemental Indenture) with the Envision
Guarantors and the Trustee, to which Intermediate assumed the
obligations under the Envision 2022 Notes. On December1, 2016, in
connection with the Mergers, Holdings entered into an eighth
supplemental indenture (the Eighth Supplemental Indenture) with
the Envision Guarantors and the Trustee, to which Holdings
assumed the obligations under the Envision 2022 Notes. On
December1, 2016, in connection with the Mergers, the Company
assumed the obligations under the Envision 2022 Notes and certain
of the domestic subsidiaries (the AmSurg Guarantors) of AmSurg
Corp. (AmSurg) executed a ninth supplemental indenture (the Ninth
Supplemental Indenture and, together with the Sixth Supplemental
Indenture, the Seventh Supplemental Indenture and the Eighth
Supplemental Indenture, the Supplemental Indentures) with the
Trustee, to which they guaranteed the Envision 2022 Notes. The
Envision 2022 Notes mature on July1, 2022.
The foregoing description of the Supplemental Indentures does not
purport to be a complete description and is qualified in its
entirety by reference to the full texts thereof, which are
attached as Exhibits 4.1 through 4.4 and are incorporated herein
by reference.
Item2.01. Completion of Acquisition or Disposition of
Assets.
On December1, 2016, to the Agreement and Plan of Merger, dated as
of June15, 2016 (the Merger Agreement), by and among Holdings,
AmSurg and the Company, Holdings and AmSurg completed the
combination of their businesses through a merger of equals. to
the Merger Agreement, AmSurg merged with and into the Company,
with the Company surviving (Merger 1). Immediately following
Merger 1, Holdings merged with and into the Company, with the
Company surviving (Merger 2 and, together with Merger 1, the
Mergers).
Under the terms of the Merger Agreement, upon completion of the
Mergers, each share of AmSurg common stock was converted into one
share of Company common stock, each share of AmSurg 5.250%
mandatory convertible preferred stock, Series A-1 was converted
into one share of Company 5.250% mandatory convertible preferred
stock, Series A-1 (Company Preferred Stock), and each share of
Holdings common stock was converted into 0.334 shares of Company
common stock. to the Mergers, the Company issued 117,460,473
shares of common stock and 1,725,000 shares of Company Preferred
Stock. The shares of Holdings common stock were suspended from
trading on the New York Stock Exchange (the NYSE) prior to the
open of trading on December2, 2016.
The description of the Mergers contained herein does not purport
to be complete and is qualified in its entirety by reference to
the Merger Agreement, a copy of which is filed as Exhibit 2.1 to
this report and incorporated herein by reference.
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Item2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information set forth in Item1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item2.03.
Item3.01. Notice of Delisting or Failure to Satisfy a
Continued Listing Rule or Standard; Transfer of Listing.
Prior to the Mergers, shares of Holdings common stock were
registered to Section12(b) of the Exchange Act and listed on the
NYSE. As a result of the Mergers, on December2, 2016, at Holdings
request, the NYSE filed a Form 25 to withdraw the shares of
Holdings common stock from listing on the NYSE. The shares of
Holdings common stock were suspended from trading on the NYSE
prior to the open of trading on December2, 2016. Holdings expects
to file a Form 15 with the SEC to terminate the registration
under the Exchange Act of the shares of Holdings common stock and
suspend the reporting obligations of Holdings under the Exchange
Act.
Item3.03. Material Modification to Rights of Security
Holders.
In connection with the Mergers, on December1, 2016, each share of
Holdings common stock was converted into 0.334 shares of Company
common stock. The certificate of incorporation and the bylaws of
the Company went into effect on December1, 2016 upon consummation
of the Mergers. As previously reported in the Description of
Newco Capital Stock and Comparison of Rights of AmSurg
Shareholders, Envision Stockholders and Newco Stockholders
sections of the Registration Statement on Form S-4 filed by the
Company on August4, 2016 and declared effective, as subsequently
amended, on October19, 2016 (the Joint Proxy
Statement/Prospectus), certain of the rights associated with
Company common stock are different from the rights associated
with AmSurg and Holdings common stock. The information set forth
in the Description of Newco Capital Stock and Comparison of
Rights of AmSurg Shareholders, Envision Stockholders and Newco
Stockholders sections of the Joint Proxy Statement/Prospectus is
incorporated by reference into this Item3.03.
As provided in the Merger Agreement, at the effective time of
Merger 2, after giving effect to appropriate adjustments to
reflect Merger 2, each (i)Holdings stock unit that was
outstanding immediately prior to the consummation of the Mergers
was assumed by the Company and converted into an award of stock
units of the Company and continued to have, and be subject to,
the same terms and conditions as applied to the Holdings stock
unit immediately prior to the consummation of Merger 2 and
(ii)Holdings stock option that was outstanding immediately prior
to the completion of Merger 2 was assumed by the Company and
converted into an option to acquire Company common stock.
The information set forth in Items 1.01, 2.01, 3.01 and 5.03 of
this Current Report on Form 8-K is incorporated by reference into
this Item3.03.
Item5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
At the effective time of Merger 2, on December1, 2016, each of
Holdings directors and executive officers ceased serving as a
director or executive officer, respectively, of Holdings, as
Holdings ceased to exist as a separate legal entity when it
merged with and into the Company. Following consummation of the
Mergers, William A. Sanger, Carol J. Burt, Leonard M. Riggs, Jr.
M.D., Richard J. Schnall, James D. Shelton, Michael L. Smith and
Ronald A. Williams, who previously served as members of Holdings
board of directors, were appointed to the board of directors of
the Company effective as of December1, 2016. On December1, 2016,
following the consummation of the Mergers, Mr.Sanger, Randel G.
Owen and Craig A. Wilson, who previously served as executive
officers of Holdings, were appointed as executive officers of the
Company in the following capacities: Mr.Sanger was appointed as
Executive Chairman; Mr.Owen was appointed as Executive Vice
President, PresidentAmbulatory Services Group; and Mr.Wilson was
appointed as Senior Vice President, General Counsel and
Secretary.
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Employment Agreement with William A. Sanger
On December1, 2016, Holdings and William A. Sanger entered into
an employment agreement (the Employment Agreement) relating to
Mr.Sangers service as Executive Chairman of the Board of
Directors of the Company following the completion of the Mergers.
The terms of Mr.Sangers employment agreement are substantially
the same as those set forth in the letter agreement and related
term sheet entered into on June15, 2016, between Holdings and
Mr.Sanger, and as previously reported in the Current Report filed
on Form 8-K by Holdings on June16, 2016, except that Mr.Sanger
has agreed that following the Mergers, he will no longer receive
personal use of the Companys corporate aircraft, to which he was
previously entitled on a limited basis. In consideration for the
loss of this benefit, the Company has agreed to pay Mr.Sanger
approximately $420,000 representing the cash value of the accrued
but unused hours of personal use to which he was entitled under
the terms of his previous employment agreement, as well as for
those hours of personal use to which he would have been entitled
in 2017.
The foregoing description of the Employment Agreement does not
purport to be a complete description and is qualified in its
entirety by reference to the full text thereof, which is attached
as Exhibit 10.3 to this report and is incorporated herein by
reference.
Item5.03. Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year.
As of the effective time of Merger 2, the Second Amended and
Restated Charter and the Second Amended and Restated Bylaws of
Holdings ceased to be in effect by operation of law and, in
connection with the Mergers, the Company amended and restated its
Certificate of Incorporation and Bylaws to reflect the changes
contemplated by the Merger Agreement and as previously reported
in the Description of Newco Capital Stock and Comparison of
Rights of AmSurg Shareholders, Envision Stockholders and Newco
Stockholders sections of the Joint Proxy Statement/Prospectus.
The information set forth in the Description of Newco Capital
Stock and Comparison of Rights of AmSurg Shareholders, Envision
Stockholders and Newco Stockholders sections of the Joint Proxy
Statement/Prospectus is incorporated by reference into this
Item5.03.The information regarding the Merger and the Merger
Agreement set forth under Item2.01 of this Current Report on Form
8-K is incorporated by reference into this Item5.03.
The Second Amended and Restated Certificate of Incorporation of
the Company and the Amended and Restated Bylaws of the Company
are filed as Exhibits 3.1 and 3.2, respectively, to this Current
Report on Form 8-K and are incorporated herein by reference.
Item9.01. Financial Statements and Exhibits.
| (d) |
Exhibits.
|
ExhibitNo. |
Description of Exhibit |
|
| 2.1 |
Agreement and Plan of Merger, dated as of June 15, 2016, by and among Holdings, AmSurg Corp. and the Company (incorporated by reference to Annex A of the Companys Registration Statement on Form S-4 initially filed with the SEC on August 4, 2016). |
|
| 3.1 |
Second Amended and Restated Certificate of Incorporation of the Company. (Incorporated by reference to Exhibit 3.1 to the Companys Form 8-K, dated December 7, 2016). |
|
| 3.2 |
Amended and Restated Bylaws of the Company. (Incorporated by reference to Exhibit 3.2 to the Companys Form 8-K, dated December 7, 2016). |
|
| 4.1 |
Sixth Supplemental Indenture, dated as of November30, 2016, by and among the Prior Envision Borrower, the Subsidiary Guarantors party thereto and Wilmington Trust, National Association (Incorporated by reference to Exhibit 4.10 to the Companys Form 8-K, dated December7, 2016). |
6
|
ExhibitNo. |
Description of Exhibit |
|
| 4.2 |
Seventh Supplemental Indenture, dated as of December 1, 2016, by and among Intermediate, the Subsidiary Guarantors party thereto and Wilmington Trust, National Association (Incorporated by reference to Exhibit 4.11 to the Companys Form 8-K, dated December 7, 2016). |
|
| 4.3 |
Eighth Supplemental Indenture, dated as of December 1, 2016, by and among Holdings, the Subsidiary Guarantors party thereto and Wilmington Trust, National Association (Incorporated by reference to Exhibit 4.12 to the Companys Form 8-K, dated December 7, 2016). |
|
| 4.4 |
Ninth Supplemental Indenture, dated as of December 1, 2016, by and among the Company, the Subsidiary Guarantors party thereto and Wilmington Trust, National Association (Incorporated by reference to Exhibit 4.13 to the Companys Form 8-K, dated December 7, 2016). |
|
| 10.1 |
Seventh Amendment, dated as of December 1, 2016, to the Term Loan Credit Agreement, dated as of May 25, 2011, by and among the Prior Envision Borrower, Deutsche Bank AG New York Branch, as existing administrative agent and existing collateral agent and JPMorgan Chase Bank, N.A., as administrative agent under the Restated Credit Agreement and as collateral agent under the Restated Credit Agreement, and the several lenders from time to time party thereto (Incorporated by reference to Exhibit 10.8 to the Companys Form 8-K, dated December 7, 2016). |
|
| 10.2 |
Third Amendment, dated as of December 1, 2016, to the ABL Credit Agreement, dated as of May 25, 2011, by and among the Prior Envision Borrower, Deutsche Bank AG New York Branch, as swingline lender, as an issuing lender, as administrative agent for the lenders and as collateral agent for the Secured Parties and JPMorgan Chase Bank, N.A., as co-collateral agent under the Restated Credit Agreement, and the several lenders from time to time party thereto (Incorporated by reference to Exhibit 10.12 to the Companys Form 8-K, dated December 7, 2016). |
|
| 10.3 |
Amended and Restated Employment Agreement, dated as of December 1, 2016, by and between Holdings and William A. Sanger (Incorporated by reference to Exhibit 10.15 to the Companys Form 8-K, dated December 7, 2016). |
| Identifies each management compensation plan or arrangement. |
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About ENVISION HEALTHCARE HOLDINGS, INC. (NYSE:EVHC)
Envision Healthcare Holdings, Inc., formerly CDRT Holding Corporation, is a holding company. The Company, through its subsidiary, provides physician-led medical services in the United States. It operates in two segments: EmCare Holdings, Inc. (EmCare) and American Medical Response, Inc. (AMR). Its EmCare segment is a provider of integrated facility-based and post-acute care physician services to healthcare facilities in the United States. Its AMR segment has developed a network of ambulance services and other healthcare transportation services in the United States. It provides Emergency Department (ED) physician services to hospitals and other facilities. Its hospitalist services include inpatient physician services. It provides anesthesiology services to hospitals, free-standing ambulatory surgery centers and physician offices. It provides radiology, including tele-radiology services to hospitals. It offers management, oversight and surgeon staffing for trauma surgery services. ENVISION HEALTHCARE HOLDINGS, INC. (NYSE:EVHC) Recent Trading Information
ENVISION HEALTHCARE HOLDINGS, INC. (NYSE:EVHC) closed its last trading session down -2.48 at 69.19 with 15,955,934 shares trading hands.