MKS cancels previously syndicated term loans, plans new financing

By Sara Rosenberg

New York, April 1 – MKS Instruments Inc. is terminating the commitment for its $4.7 billion seven-year covenant-lite term loan and €500 million seven-year covenant-lite term loan that allocated in October 2021 as it needs more time to complete its acquisition of Atotech Ltd., according to an 8-K filed with the Securities and Exchange Commission on Friday.

No early termination penalties were incurred by the company in connection with the termination.

The company has entered into a new commitment for $5.75 billion of senior secured credit facilities consisting of a $4.25 billion seven-year covenant-lite term loan B, a $1 billion five-year term loan A and a $500 million five-year revolver to fund the acquisition.

JPMorgan Chase Bank and Barclays are the joint lead arrangers and bookrunners on the new financing.

The new term loan B is expected to have 101 soft call protection for one year, based on the commitment letter.

CSA is 10 basis points one-month rate, 15 bps three-month rate and 25 bps six-month rate.

Amortization on the term loan B is 1% per annum, and amortization on the term loan A is 5% in years one and two, 7.5% in years three and four, and 10% in year five.

Through an amendment of the acquisition agreement, the required closing date of the acquisition was extended to Sept. 30, 2022 from March 31, 2022 to allow additional time for the regulatory approval from China’s State Administration for Market Regulation.

The transaction has received approval from the 12 other global antitrust regulatory authorities for which approval is a condition to closing.

Atotech is being acquired for $16.20 in cash and 0.0552 of a share of MKS common stock for each Atotech common share.

The canceled $4.7 billion term loan was priced at Libor plus 225 bps with a 0.5% Libor floor and an original issue discount of 99.75 and the canceled €500 million term loan was priced at Euribor plus 275 bps with a 0% floor and a discount of 99.75. Both term loans included 101 soft call protection for six months.

Under the original financing, the company was also getting a $500 million five-year asset-based revolving credit facility.

JPMorgan Chase Bank, Barclays, BofA Securities Inc., HSBC Securities, Citigroup Global Markets Inc. and Mizuho led the original credit facilities.

MKS is an Andover, Mass.-based provider of technologies that enable advanced processes and improve productivity. Atotech is a Berlin-based specialty chemicals technology company.

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