PRA Health Sciences,Inc. (NASDAQ:PRAH) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k
-
0

PRA Health Sciences,Inc. (NASDAQ:PRAH) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

Credit Agreement

On December 6, 2016, the registrant, PRA Health Sciences, Inc. (“Holdings”), and Pharmaceutical Research Associates, Inc. (the “Borrower”), a wholly owned subsidiary of Holdings, entered into a Credit Agreement (the “Credit Agreement”) among the Borrower, Holdings, each lender from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent, collateral agent, letter of credit issuer and swingline lender (the “Agent”).

to the Credit Agreement, the Borrower refinanced the credit agreement, dated as of September 23, 2013, among PRA Holdings, Inc., the Borrower’s affiliates party thereto, the lenders from time to time party thereto and UBS AG, Stamford Branch, as agent. The new facility is comprised of (i) a $625 million term loan facility and (ii) a revolving credit facility in a maximum amount of up to $125 million, in each case with an ultimate maturity date of December 6, 2021.

Interest Rates. The interest rate applicable to the term loans and revolving loans under the Credit Agreement is a rate equal to LIBOR or the adjusted base rate (“ABR”) rate, at the election of Holdings, plus a margin based on the ratio of total indebtedness to EBITDA (the “Leverage Ratio”) and ranges from 1.25% to 2.25%, in the case of LIBOR rate loans, and 0.25% to 1.25%, in the case of ABR rate loans.

Mandatory Prepayments. The Credit Agreement requires the Borrower to pay, subject to certain exceptions, outstanding term loans with:

· 50% of the net cash proceeds of the incurrence or issuance of certain debt; and

· 50% of the net cash proceeds in excess of $5 million of certain non-ordinary course asset sales and casualty and condemnation events, subject to reinvestment rights and certain other exceptions.

Voluntary Prepayments. The Borrower is permitted to voluntarily prepay any outstanding loans under the Credit Agreement at any time without premium or penalty, other than customary “breakage” costs with respect to LIBOR loans.

Amortization and Final Maturity. The Credit Agreement requires the Borrower to repay 5% of the original aggregate principal amount of the term loans in year 1, 7.5% in each of years 2 and 3, 10% in year 4, 12.5% in year 5, with the balance due at maturity. These amortization payments will be made on a quarterly basis.

Certain Other Provisions. The Credit Agreement contains certain covenants that, among other things (and subject to certain exceptions), restrict the ability of Holdings, the Borrower and their subsidiaries to:

· create any liens;

· make investments and acquisitions;

· incur or guarantee additional indebtedness;

· enter into mergers or consolidations and other fundamental changes;

· conduct sales and other dispositions of property or assets;

· enter into sale-leaseback transactions or hedge agreements;

· prepay subordinated debt;

· pay dividends or make other payments in respect of capital stock;

· change the line of business;

· enter into transactions with affiliates;

· enter into burdensome agreements with negative pledge clauses and clauses restriction; and

· subsidiary distributions.

In addition, the Credit Agreement contains financial covenants that will require Holdings to maintain a Leverage Ratio below a specified level (which may be temporarily increased following a material acquisition) and an interest coverage ratio above a specified level as of the last day of any four fiscal quarter period.

In addition to the foregoing negative covenants, the Credit Agreement also contains certain customary representations and warranties and affirmative covenants and customary events of default (including upon a change of control), which would permit the Agent, with the consent of the required lenders, to accelerate all amounts outstanding under the Credit Agreement following such events of default.

Guarantee

On December 6, 2016, Holdings, the Borrower and certain subsidiaries of Holdings (the “Subsidiary Guarantors” and, together with Holdings and the Borrower, the “Guarantors”) entered into a Guarantee (the “Guarantee”) in favor of the Agent. The Subsidiary Guarantors include each material, wholly owned U.S. restricted subsidiary of Holdings with customary exceptions, including where providing such guarantees is not permitted by law, regulation or contract or would result in material adverse tax consequences. to the Guarantee, the Guarantors unconditionally guarantee the obligations under the Credit Agreement.

Security Agreement

On December 6, 2016, in connection with the Credit Agreement, each Guarantor entered into a Security Agreement (the “Security Agreement”) with the Agent to which all obligations of the Borrower under the Credit Agreement, and the guarantees of such obligations to the Guarantee, are secured, subject to permitted liens and other exceptions, by substantially all of the assets of the Borrower and each Guarantor, including but not limited to: (i) a perfected pledge of all of the capital stock issued by the Borrower and each Guarantor and (ii) perfected security interests in substantially all other tangible and intangible assets of the Borrower and the Guarantors (subject to certain exceptions and exclusions).

The descriptions of the Credit Agreement, Security Agreement and Guarantee are qualified in their entirety by the terms of such agreements, which are incorporated herein by reference and attached to this report as Exhibits 10.1, 10.2 and 10.3, respectively.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

See the Exhibit Index immediately following the page hereto, which is incorporated herein by reference.


About PRA Health Sciences, Inc. (NASDAQ:PRAH)

PRA Health Sciences, Inc. is a contract research organization (CRO). The Company provides outsourced clinical development services to the biotechnology and pharmaceutical industries. The Company offers therapeutic services in areas of pharmaceutical development, including oncology, central nervous system, inflammation and infectious diseases. The Company’s integrated services include data management, statistical analysis, clinical trial management, and regulatory and drug development consulting. The Company’s service offerings include Product Registration Services, which includes Phase IIb through III product registration trials and Phase IV trials, inclusive of post-marketing commitments and registries; Strategic Solutions, which provides Embedded Solutions and functional outsourcing services, and Early Development Services, which includes Phase I through Phase IIa clinical trials and bioanalytical laboratory services.

PRA Health Sciences, Inc. (NASDAQ:PRAH) Recent Trading Information

PRA Health Sciences, Inc. (NASDAQ:PRAH) closed its last trading session 00.00 at 54.12 with 739,660 shares trading hands.