Vontier lines up $2.55 billion credit facility ahead of spin-off

By Wendy Van Sickle

Columbus, Ohio, Sept. 30 – Fortive Corp.’s wholly owned subsidiary Vontier Corp. entered into a $2.55 billion senior unsecured credit agreement on Tuesday with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The facility consists of a three-year $800 million delayed draw term loan, a two-year $1 billion delayed draw term loan and a three-year $750 million multi-currency revolver, which has a $25 million sublimit for swingline loans and a $75 million sublimit for letters of credit.

Borrowing of any amounts under the credit facilities is subject to the consummation of the proposed separation of Vontier from Fortive, which separation would be effected by the distribution to Fortive’s stockholders of 80.1% of the shares of Vontier common stock held by Fortive. At closing, Vontier did not borrow any funds under the credit facilities.

Borrowings bear interest at Libor plus a margin ranging from 125 basis points to 200 bps, and there is a revolving commitment fee ranging from 12.5 bps to 32.5 bps, both depending on either leverage ratio or debt rating.

An accordion feature allows Vontier to expend the revolver by up to an additional $250 million.

The company must maintain a maximum consolidated net leverage ratio of 3.75x, with a step-up to 4.25x for the four fiscal quarters after an acquisition that has a purchase price over $250 million. Vontier must also maintain a minimum interest coverage ratio of 3.5x.

BofA Securities, Inc., Citibank, N.A., Wells Fargo Securities, LLC, PNC Capital Markets LLC, JPMorgan Chase Bank, NA, U.S. Bank NA, Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc., Bank of Nova Scotia, BNP Paribas, UBS Securities LLC, Truist Securities, Inc., TD Securities (USA) LLC, Sumitomo Mitsui Banking Corp. and Credit Suisse Loan Funding LLC are the joint lead arrangers and bookrunners.

Citi, Wells Fargo, PNC, JPMorgan, U.S. Bank, Goldman Sachs, Morgan Stanley, Scotia, BNP Paribas, UBS AG, Stamford Branch, Truist, Toronto-Dominion Bank, New York Branch, Sumitomo Mitsui and Credit Suisse are the syndication agents.

Vontier intends to use the net proceeds from the term loans in part to fund a cash distribution to Fortive as partial consideration for the transfer of the assets and liabilities of Fortive’s Industrial Technologies business to Vontier.

The revolver and remaining term loans may be used for working capital and for general corporate purposes.

Fortive is an industrial growth company based in Everett, Wash. Vontier is a global industrial technology company focused on transportation and mobility solutions.

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