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Item 1.01
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Entry into a Material Definitive Agreement.
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On March 13, 2020, Zimmer Biomet Holdings, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with BofA Securities, Inc., Citigroup Global Markets Inc., RBC Capital Markets, LLC and Wells Fargo Securities, LLC, as representatives of the underwriters named therein (collectively, the “Underwriters”), in connection with the public offering of $600.0 million aggregate principal amount of the Company’s 3.050% notes due 2026 (the “2026 Notes”) and $900.0 million aggregate principal amount of the Company’s 3.550% notes due 2030 (the “2030 Notes” and, together with the 2026 Notes, the “Notes”).
The Underwriting Agreement contains representations and warranties and covenants that are customary for transactions of this type. In addition, the Company has agreed to indemnify the Underwriters against certain liabilities on customary terms. The sale of the Notes is scheduled to close on March 20, 2020, subject to the satisfaction of customary closing conditions. Some of the Underwriters and their affiliates have engaged in, and may in the future engage in, commercial banking, financial advisory, investment banking, lending and other commercial dealings in the ordinary course of their business with the Company or its affiliates, including participating as lenders under the Company’s credit facilities, for which they have received, and may in the future receive, customary fees and commissions. In addition, Wells Fargo Securities, LLC, an Underwriter for the offering, is an affiliate of the trustee under the indenture described below. Also, to the extent that the Underwriters or their affiliates own any of the Company’s $1.5 billion outstanding aggregate principal amount of 2.700% Senior Notes due 2020 (the “2020 Notes”), they would receive their proportionate share of the net proceeds that the Company uses from the offering of the Notes to repay the 2020 Notes at maturity.
The Notes will be issued pursuant to a seventh supplemental indenture, to be dated as of March 20, 2020, to the Indenture (the “Base Indenture”) dated as of November 17, 2009 between the Company and Wells Fargo Bank, National Association, as trustee. The 2026 Notes will bear interest at a rate of 3.050% per annum, which interest will be payable semi-annually in arrears on January 15 and July 15 of each year, commencing on July 15, 2020. The 2026 Notes will mature on January 15, 2026. The 2030 Notes will bear interest at a rate of 3.550% per annum, which interest will be payable semi-annually in arrears on March 20 and September 20 of each year, commencing on September 20, 2020. The 2030 Notes will mature on March 20, 2030.
The offering of the Notes was made pursuant to the Registration Statement on Form S-3 (Registration No. 333-229882), the prospectus dated February 26, 2019 and the related prospectus supplement dated March 13, 2020.
A copy of the Underwriting Agreement is attached hereto as Exhibit 1.1 and is incorporated herein by reference. The Base Indenture was incorporated by reference into the Registration Statement.