Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. PALL CORP (75829) 10-Q published on May 21, 2015 at 5:14 pm
Reporting Period: Apr 29, 2015
On May 12, 2015, the Company executed an Agreement and Plan of Merger (the "Merger Agreement"), with Danaher Corporation, a Delaware corporation (“Danaher”) pursuant to which, among other things and subject to the satisfaction or waiver of specified conditions, Danaher has agreed to acquire the Company for $127.20 per share in cash. The acquisition is not subject to any financing conditions but will require shareholder and regulatory approval and is expected to close by the end of calendar 2015.
Interest expense, net, in the three months ended April 30, 2015 reflects the reversal of accrued interest of $4,170, related to the resolution of U.S. and foreign tax audits. Interest expense, net, in the three months ended April 30, 2014 reflects the reversal of accrued interest of $1,478, related to the resolution of foreign tax audits. Excluding these benefits, interest expense, net, in the three months ended April 30, 2015 and April 30, 2014 would have been $5,440 and $6,225, respectively. The resulting decrease in net interest expense of $785 was primarily driven by a decrease in income tax related interest expense other than the items referenced above, partly offset by the impact of increased commercial paper borrowing.
In April 2015, the Financial Accounting Standards Board (“FASB”) issued new guidance which amended Accounting Standards Codification (“ASC”) 835, “Interest.” The amended guidance requires entities to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of that debt liability as opposed to previous guidance which dictated that debt issuance costs be presented in the balance sheet as a deferred charge. The amended guidance does not apply to the amortization of premium and discount of assets that are reported at fair value and the debt issuance costs of liabilities that are reported at fair value, nor does it change the current recognition requirements for reporting the amortization of debt issuance costs as interest expense. Per the amended guidance, net debt issuance costs of $1,774 and $2,033 for the periods ended April 30, 2015 and July 31, 2014, respectively, have been reclassified from 'Other non-current assets' and are presented as a direct deduction of 'Long-term debt, net of current portion' in our condensed consolidated balance sheets. The adoption of this guidance did not have a material impact on our consolidated financial results.
On May 12, 2015, we executed the Merger Agreement with Danaher pursuant to which Danaher agreed to acquire the Company for $127.20 per share in cash.
The announcement of the proposed merger, whether or not consummated, may result in a loss of key personnel and may disrupt our sales and marketing, research and development, productivity initiatives or other key business activities, any or all of which may have an impact on our financial performance. The Merger Agreement generally requires us to operate our business in the ordinary course pending consummation of the proposed merger, but includes certain contractual restrictions on the conduct of our business that may affect our ability to execute on our business strategies and attain our financial goals. Additionally, the announcement of the proposed merger, whether or not consummated, may impact our relationships with third parties, including collaboration partners, suppliers, distributors, key opinion leaders, consumers and others.
As described in our Form 8-K report to the Securities and Exchange Commission filed on May 15, 2015, the completion of the proposed merger is subject to certain conditions, including, among others, (i) approval of the merger by holders of at least two-thirds of the outstanding shares of the Company’s common stock, (ii) expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and (iii) receipt of other required antitrust approvals. Moreover, the obligations of the parties to consummate the merger are subject to certain other conditions, including without limitation (a) the accuracy of the other party’s representations and warranties (subject to materiality qualifiers) and (b) the other party’s performance in all material respects of its obligations and covenants contained in the Merger Agreement. In addition, the obligation of Danaher to consummate the merger is subject to the absence of a material adverse effect on the Company, as defined in the Merger Agreement.
The Merger Agreement contains certain termination rights and provides that, upon termination of the Merger Agreement under specified circumstances, including, but not limited to, a change in the recommendation of the Board or a termination of the Merger Agreement by the Company to enter into an agreement for a “superior proposal," the Company will pay Danaher a cash termination fee of $423,194.