Debt |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 04, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | (6) DEBT
Revolving Credit Facility On June 29, 2026, the Company entered into a five-year, $1.0 billion credit agreement (the “Credit Agreement”), which matures on June 29, 2031, in connection with the Spin-off. The Credit Agreement provides for a new senior secured credit facility in an aggregate principal amount of $1.0 billion, consisting of (i) a $750 million U.S. dollar revolving credit facility and (ii) a $250 million multi-currency revolving credit facility, with the potential, under certain circumstances, to increase the amount of the credit facility by the greater of $151 million and 100% of the Company’s Consolidated EBITDA (as defined in the Credit Agreement) for the most recently ended period of four consecutive quarters (plus additional amounts subject to compliance with a specified leverage ratio depending on the type of indebtedness being incurred) either by increasing one or more revolving facility, or by adding on one or more revolving and/or term loan facilities. Borrowings under the U.S. dollar revolving credit facility (other than swingline loans which are available in U.S. dollars, Euros and Pounds sterling only) may be denominated in U.S. dollars. Borrowings under the multi-currency revolving credit facility may be denominated in U.S. dollars, Pounds sterling, Euros, Canadian dollars, Swedish Krona, Danish Krone, Australian dollars and any alternative currency agreed to with the lenders. Debt issuance costs of $3.6 million were recorded within other assets in the Condensed Combined Balance Sheets and will be amortized over the term of the Credit Agreement on a straight-line basis. Borrowings in (i) U.S. dollars shall bear interest based on a term secured overnight financing rate (“SOFR”) or a base rate, (ii) Pounds sterling shall bear interest based on a daily sterling overnight index average rate (“SONIA”), (iii) Euros shall bear interest based on the Euro interbank offered rate (“EURIBOR”), (iv) Canadian dollars shall bear interest based on the term CORRA Rate, (v) Swedish Krona shall bear interest based on the STIBOR rate, (vi) Danish Krone shall bear interest based on the CIBOR rate and (vii) Australian dollars shall bear interest based on the BBSY rate, in each case of clauses (i) through (vii) above, plus a margin as described below. The margin for each of the foregoing rates, other than the base rate, shall range from 1.125% to 2.00% based on the Total Net Leverage Ratio (as defined in the Credit Agreement) of the Company, with interest periods, in the case of all SOFR Loans or Eurocurrency Loans, at the Company’s option of one, three or six months or, subject to certain conditions, twelve months. The margin for base rate borrowings shall range from 0.125% to 1.00% based on the Total Net Leverage Ratio (as defined in the Credit Agreement) of the Company. In addition, a commitment fee accrues on the aggregate amount of the lenders’ unused revolving commitments at a rate of 0.175% to 0.275% based on the Total Net Leverage Ratio (as defined in the Credit Agreement). The Credit Agreement includes requirements, to be tested quarterly, that the Company maintains (i) a maximum Secured Net Leverage Ratio (as defined in the Credit Agreement) of 3.75 to 1.00, which may be adjusted to 4.25 to 1.00 for a four consecutive fiscal quarter period in connection with certain qualified acquisitions, subject to the terms and conditions contained in the Credit Agreement, and (ii) a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00. All obligations (i) under the Credit Agreement, (ii) under certain swap contracts and cash management agreements, and (iii) up to a specified amount, under certain sidecar letter of credit and guarantee facilities are secured by substantially all the assets of Alkar Holdings, Inc., the Company, and certain of the Company’s material wholly-owned domestic subsidiaries, and unconditionally guaranteed by, subject to certain exceptions, the Company and certain of the Company’s direct and indirect material wholly-owned domestic subsidiaries. The Credit Agreement contains certain customary affirmative and negative covenants and events of default. At July 4, 2026, the Company was in compliance with all covenants under the Credit Agreement. As of July 4, 2026, the Company had $228.0 million in U.S. dollar borrowings outstanding under the revolving credit facility and no outstanding letters of credit, resulting in available borrowing capacity of $772.0 million. The carrying value of the revolving credit facility approximates fair value as the interest rate margins are consistent with current market conditions. As of July 4, 2026, the interest rate for borrowings outstanding under the revolving credit facility was 4.90% and the commitment fee was 0.20%. Foreign Loans On October 23, 2025, a foreign subsidiary of the Company entered into a term loan with an initial principal amount of €20.0 million (“Foreign Term Loan”). The Foreign Term Loan, which matures on September 30, 2035, will be repaid in equal quarterly installments beginning in the first quarter of 2026. Interest is payable quarterly in arrears based on three-month EURIBOR plus 0.83%. At July 4, 2026, the weighted average per annum interest rate for foreign loans was approximately 2.85%. The carrying value of foreign loans approximates fair value. As of July 4, 2026, the Company’s foreign subsidiaries were in compliance with all debt covenants, none of which are material to the Company. |
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