Colfax announces completion of $3 billion bank financing for acquisition of DJO Global

Colfax Corporation announced it has entered into a $3 billion accredit agreement with 23 banks led by JPMorgan Chase Bank and Credit Suisse Funding LLC that completed bank financing for Colfax’s acquisition of DJO Global Inc., according to a press release.

The new credit agreement funding will be available to Colfax reportedly on the date of finalization of the acquisition, which is expected to be within the first quarter of 2019. The credit agreement includes a $1.3 billion revolving credit facility, a $1.225 billion term A-1 loan, which will mature in 5 years, and a $0.5 billion term A-2 loan, which will mature in 2 years. With the funds from the new agreement Colfax will refinance its existing credit agreement and fund a portion of fees payable by Colfax in connection with the acquisition of DJO. After the acquisition of DJO closes, credit extensions will reportedly be used for working capital and general corporate purposes.

“We are pleased to complete this important element of the DJO acquisition financing with attractive terms,” Christopher M. Hix, Colfax senior vice president and chief financial officer, said in the release. “The company is well-supported by a global bank group aligned with our portfolio transformation strategy. The terms and structure of this financing are consistent with our near-term plans to deliver and our longer-term objective to achieve investment grade credit ratings.”

According to the release, the new credit facility will have interest, determined by a base rate or Eurocurrency rate plus a margin that is based on the Colfax’s leverage levels and credit ratings. Colfax expects this to be 0.75% for the base rate or 1.75% for the Eurocurrency rate. The new credit agreement includes customary financial covenants that reportedly require Colfax to maintain a maximum total leverage ratio and a minimum interest coverage ratio.

Reference: