Cantel Medical says it will use upsized credit facility ‘prudently’

By Devika Patel

Knoxville, Tenn., Sept. 11 – Cantel Medical Corp. recently renegotiated its credit facility, lifting the size to $650 million, which it will use “prudently,” according to its executive vice president and chief financial officer.

“We just renegotiated our credit facility about three months ago,” Peter Clifford said at the Raymond James 14th North American Equities Conference in London on Tuesday.

“Our previous line was about $250 million, so the one we just entered into is about $650 million, so it has given us a lot of capabilities which we will use prudently,” he said.

The company has a leverage ratio of about 1.5x.

“We’ve got about a 1.5x adjusted EBITDAX to net debt,” Clifford said.

On July 2, Cantel Medical said it refinanced its credit facility by amending the agreement to include a $200 million tranche A term loan and an upsized $400 million revolving credit facility due June 28, 2023.

The company entered into a $600 million amended credit agreement on Monday with Bank of America Merrill Lynch, Wells Fargo Securities, LLC and JPMorgan Chase Bank, NA as joint lead arrangers and bookrunners.

Bank of America, NA was the administrative agent, swingline lender and letter-of-credit issuer; Wells Fargo Bank, NA and JPMorgan Chase Bank were the co-syndication agents; and MUFG Bank, Ltd. was the documentation agent.

Interest on the loans is initially Libor plus 125 basis points, with a spread of Libor plus 100 bps to 200 bps, based on leverage. The commitment fee ranges from 20 bps to 35 bps.

Some proceeds of the term loan were used to repay $164 million of the company’s revolving credit loans under its existing credit agreement.

Future borrowings under the amended revolver will be used to support Cantel's strategic growth initiatives, for capital expenditures and for general corporate purposes.

The amended credit agreement also includes a $300 million accordion.

At closing, Cantel had $200 million of term loan borrowings outstanding under the amended credit facility and available capacity under the revolver of $400 million.

In addition to the tranche A term loan, the amended terms include an upsizing of the revolving credit commitments from $250 million.

Pricing under the amended loans was reduced as was the annual commitment fee.

Based in Little Falls, N.J., Cantel Medical makes infection prevention and control products and services for the health care field.

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