Cantel Medical gets $150 million amended and restated credit facility

By Marisa Wong

Madison, Wis., Aug. 5 - Cantel Medical Corp. entered into a $150 million second amended and restated credit agreement on Aug. 1, according to an 8-K filed Friday with the Securities and Exchange Commission.

The new credit agreement amends and restates the company's existing credit agreement dated Aug. 1, 2005. The new agreement includes a five-year $100 million revolving credit facility with sublimits of up to $20 million for letters of credit and up to $5 million for swing line loans and a $50 million term loan facility that matures on Aug. 1, 2016.

The company may from time to time increase the revolving credit facility by a total amount of up to $50 million without the consent of the lenders.

The senior lenders include Bank of America, NA, which is the lead bank and administrative agent, PNC Bank, NA and Wells Fargo Bank, NA. Bank of America Merrill Lynch is the lead arranger and bookrunner.

Borrowings bear interest at rates ranging from 25 basis points to 200 bps above Bank of America's prime rate for base rate borrowings or at rates ranging from Libor plus 125 bps to Libor plus 300 bps for Libor-based borrowings, depending on leverage. The current rates applicable to the outstanding borrowings are at the prime rate plus 125 bps or Libor plus 225 bps.

The principal amounts of the term loan are to be paid in 20 consecutive quarterly installments of $2.5 million each beginning on Sept. 30, 2012. Cantel may make optional prepayments of loans at any time without premium or penalty.

The company is required to make mandatory prepayments of amounts outstanding under the new credit agreement of the following:

• 100% of the net proceeds received from certain sales of all or any of the company and its subsidiaries' assets;

• 100% of certain insurance and condemnation proceeds received by the company or any of its subsidiaries;

• 100% of the net cash proceeds received by the company or any of its subsidiaries from the issuance of new debt, subject to exceptions; and

• 100% of the net proceeds of the sale of certain equity, subject to exceptions.

According to the new credit agreement, Cantel must not allow its consolidated fixed-charge coverage ratio to be less than 1.25:1.00, its consolidated leverage ratio to exceed 3.00:1.00 and consolidated EBITDA for any four consecutive fiscal quarter periods to be less than $45 million.

The new facilities are secured by substantially all assets of Cantel and its U.S.-based subsidiaries, including Minntech, Mar Cor Purification, Inc., Crosstex International, Inc. and Strong Dental Products, Inc., and a pledge of all of the outstanding shares of Minntech, Mar Cor, Crosstex and Strong Dental owned by the company and 65% of the outstanding shares of Cantel's foreign-based subsidiaries.

Proceeds will be used to fund the acquisition of Byrne Medical, Inc. and to refinance the company's working capital credit facilities under its 2005 credit agreement.

Cantel Medical is a Little Falls, N.J.-based provider of infection prevention and control products as well as technical maintenance services.

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