PRA Health Sciences,Inc. (NASDAQ:PRAH) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
The information set forth in Item 2.01 of this Current Report on Form8-K is incorporated by reference into this Item 1.01.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On September6, 2017, Pharmaceutical Research Associates,Inc., a Virginia corporation (“PRA”) and a wholly-owned subsidiary of PRA Health Sciences,Inc. (the “Company”), completed the previously announced acquisition of Symphony Health Solutions Corporation, a Delaware corporation (“Symphony Health”), to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of August3, 2017, by and among PRA, Symphony Health, Skyhook Merger Sub,Inc., a Delaware corporation and a wholly-owned subsidiary of PRA (“Merger Sub”), and STG III, L.P., a Delaware limited partnership, solely in its capacity as the representative (the “Sellers Representative”) of holders of Symphony Health’s capital stock and stock options. to the Merger Agreement, Merger Sub merged with and into Symphony Health on September6, 2017 (the “Merger”), with Symphony Health continuing as the surviving corporation and a wholly-owned subsidiary of PRA.
to the Merger Agreement, PRA paid approximately $530 million in cash for the outstanding equity of Symphony Health, which amount is subject to customary post-closing adjustment. Under the Merger Agreement, PRA may be required to make additional payments to the prior equity holders of Symphony Health to an earnout provision that is based on Symphony Health exceeding financial targets for the twelve month periods ending December2017 and December2018.
The Company funded the cash consideration for the Merger with proceeds from borrowings under the Joinder (as defined below). PRA, certain domestic subsidiaries of PRA, as grantors and guarantors, the lenders party thereto and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent and collateral agent, entered into the Joinder Agreement (the “Joinder”) on September6, 2017, which amended the Credit Agreement, dated as of December6, 2016 (the “Credit Agreement” and, as amended by the Joinder, the “Amended Credit Agreement”), by and among the Company, PRA, as the borrower, each lender from time to time party thereto and Wells Fargo, as administrative agent, collateral agent, letter of credit issuer and swingline lender. to the terms of the Joinder, PRA exercised its right under the Credit Agreement to establish an additional tranche of term loans (the “New Term Loan”), to which, on September6, 2017, PRA borrowed an aggregate principal amount of $550 million to be used to finance the Merger and for general corporate purposes.
The New Term Loan matures on December6, 2021 and bears interest at a rate equal to LIBOR or the adjusted base rate (“ABR”), plus a margin based on the ratio of total indebtedness to EBITDA, ranging from 1.25% to 2.00%, in the case of LIBOR rate loans, and 0.25% to 1.00%, in the case of ABR rate loans. Under the terms of the Joinder, the New Term Loan will amortize in equal quarterly installments of an aggregate annual amount equal to 2.5% of the original principal amount of the New Term Loan, with any remaining balance payable at maturity. Other than with respect to the applicable interest rate and amortization schedule, all terms and conditions applicable to the New Term Loan, including provisions governing mandatory and voluntary prepayments, affirmative and negative covenants and events of default and related penalties, are substantially the same as the terms and conditions contained in the Credit Agreement, as previously disclosed in the Company’s Current Report on Form8-K filed with the SEC on December6, 2016 (the “December2016 8-K”).
On September6, 2016, in connection with the Joinder, Symphony Health, Source Healthcare Analytics, LLC, a wholly-owned subsidiary of Symphony Health, Parallel 6,Inc., a wholly-owned subsidiary of PRA (collectively, the “New Subsidiary Guarantors”) and Wells Fargo, in its capacity as collateral agent (the “Collateral Agent”), entered into a supplement (the “Guarantee Supplement”) to the Guarantee, dated as of December6, 2016 (the “Guarantee”), by and among the Company, PRA and certain subsidiaries of PRA (collectively, the “Existing Guarantors”), in favor of the Collateral Agent. to the Guarantee Supplement, the New Subsidiary Guarantors unconditionally guarantee the obligations under the Amended Credit Agreement, on substantially the same terms as set forth in the Guarantee, as previously disclosed in the December2016 8-K.
