Item 1.01 Entry into a Material Definitive Agreement.
Amended and Restated Revolving Credit Agreement
On August 25, 2020, International Flavors & Fragrances Inc. (the "Company" or
"IFF") and certain of its subsidiaries entered into the Second Amended and
Restated Credit Agreement (the "Amended and Restated Revolving Credit
Agreement"), which amended and restated the Credit Agreement, dated as of
November 9, 2011, which had been previously amended and restated as of
December 2, 2016, and further amended as of May 21, 2018, June 6, 2018, July 13,
2018 and January 17, 2020 among the Company, certain of its subsidiaries, the
banks, financial institutions and other institutional lenders party thereto, and
Citibank, N.A. as administrative agent.
The Amended and Restated Revolving Credit Agreement provides for, among other
things, a $1.0 billion senior unsecured revolving loan credit facility maturing
June 6, 2023, which facility will be increased to $2.0 billion upon the closing
of the Company's previously announced merger with Nutrition & Biosciences, Inc.
("N&B"), a subsidiary of DuPont de Nemours, Inc. ("DuPont") (the "N&B
Transactions") and subject to certain other conditions. At the option of the
Company, the facility may be increased to $1.25 billion prior to the closing of
the N&B Transactions, and to $2.5 billion following the closing of the N&B
Transactions, in each case subject to certain conditions.
Following the closing of the N&B Transactions, the Company's maximum permitted
ratio of Net Debt to Consolidated EBITDA under the Amended and Restated
Revolving Credit Agreement will be 4.75 to 1.0, stepping down to 3.50 to 1.0
over time (with a step-up if the Company consummates certain qualified
acquisitions).
The lenders and other financial institutions that are party to the Amended and
Restated Revolving Credit Agreement and their respective affiliates engage in
financial advisory, investment banking, commercial banking or other transactions
of a financial nature with the Company and its subsidiaries, including the
provision of advisory services for which they receive certain fees, expense
reimbursements or other payments.
The foregoing description of the Amended and Restated Revolving Credit Agreement
is not intended to be complete and is qualified in its entirety by the copy
thereof which is filed herewith as Exhibit 10.1 and incorporated herein by
reference.
Amendments to Existing Term Loan Agreement
On August 25, 2020, the Company also entered into an amendment (the "Term Loan
Amendment") to its Term Loan Agreement (as defined below).
The Term Loan Amendment provides, among other things, that after the closing
date of the N&B Transactions, the Company's maximum permitted ratio of Net Debt
to Consolidated EBITDA shall be 4.75 to 1.0, stepping down to 3.50 to 1.0 over
time (with a step-up if the Company consummates certain qualified acquisitions).
The amendments were made pursuant to the Term Loan Credit Agreement, dated as of
June 6, 2018, and previously amended as of July 13, 2018 and as of January 17,
2020, among the Company, the banks, financial institutions and other
institutional lenders party thereto, and Morgan Stanley Senior Funding, Inc. as
administrative agent (the "Term Loan Agreement").
The lenders and other financial institutions that are party to the Term Loan
Amendment and their respective affiliates engage in financial advisory,
investment banking, commercial banking or other transactions of a financial
nature with the Company and its subsidiaries, including the provision of
advisory services for which they receive certain fees, expense reimbursements or
other payments.
The foregoing description of the Term Loan Amendment is not intended to be
complete and is qualified in its entirety by the copy thereof which is filed
herewith as Exhibit 10.2 and incorporated herein by reference.
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Amendments to Existing CCB Term Loan Agreement
On August 25, 2020, the Company also entered into an amendment (the "CCB Term
Loan Amendment") to its CCB Term Loan Agreement (as defined below).
The CCB Term Loan Amendment provides, among other things, that after the closing
date of the N&B Transactions, the Company's maximum permitted ratio of Net Debt
to Consolidated EBITDA shall be 4.75 to 1.0, stepping down to 3.50 to 1.0 over
time (with a step-up if the Company consummates certain qualified acquisitions).
The amendments were made pursuant to the Term Loan Credit Agreement, dated as of
May 15, 2020 among the Company, the lenders party thereto and China Construction
Bank Corporation, New York Branch, as administrative agent (the "CCB Term Loan
Agreement").
The lenders and other financial institutions that are party to the CCB Term Loan
Amendment and their respective affiliates engage in financial advisory,
investment banking, commercial banking or other transactions of a financial
nature with the Company and its subsidiaries, including the provision of
advisory services for which they receive certain fees, expense reimbursements or
other payments.
The foregoing description of the Term Loan Amendment is not intended to be
complete and is qualified in its entirety by the copy thereof which is filed
herewith as Exhibit 10.3 and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 above with respect to the Amended and
Restated Revolving Credit Agreement, the Term Loan Agreement, the Term Loan
Amendment, the CCB Term Loan Agreement and the CCB Term Loan Amendment is
incorporated by reference in this Item 2.03 in its entirety.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On August 27, 2020, International Flavors & Fragrances Inc. held a special
meeting of shareholders (the "Special Meeting"), in connection with the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of December 15,
2019, by and among DuPont de Nemours, Inc., Nutrition & Biosciences, Inc., a
Delaware corporation and wholly owned subsidiary of DuPont, IFF, and Neptune
Merger Sub I Inc., a Delaware corporation and wholly owned subsidiary of IFF
("Merger Sub I"), pursuant to which, among other things, Merger Sub I will merge
with and into N&B, with N&B as the surviving corporation (the "Merger").
The following matters were submitted to a vote of the Company's shareholders at
the Special Meeting: (i) a proposal to approve the issuance of shares of IFF
common stock to the stockholders of Nutrition and Biosciences, Inc. in the
Merger pursuant to the terms of the Merger Agreement (the "Share Issuance"); and
(ii) a proposal to approve the adjournment of the Special Meeting, if necessary
or appropriate, to solicit additional proxies if there are not sufficient votes
at the time of the Special Meeting to approve the Share Issuance (the
"Adjournment Proposal"). These proposals are described in more detail in the
definitive proxy statement filed by IFF on July 27, 2020, as supplemented by the
supplemental disclosures filed on Schedule 14A by IFF on August 13, 2020 and
August 14, 2020.
As of the close of business on July 13, 2020, the record date for the Special
Meeting, 106,932,133 shares of IFF common stock were outstanding and eligible to
vote at the Special Meeting. 82,857,087 shares of IFF common stock were
represented in person or by proxy at the Special Meeting, and therefore a quorum
was present.
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Each of the matters submitted to a vote of the Company's shareholders at the
Special Meeting was approved by the requisite vote of the Company's
shareholders. Set forth below is the number of votes cast for, against or
withheld, as well as the number of abstentions, as to each such matter:
1. Proposal to approve the issuance of shares of IFF common stock to the
stockholders of Nutrition and Biosciences, Inc. in the Merger pursuant to
the terms of the Merger Agreement:
Votes "For" Votes "Against" Abstentions
82,499,886 325,747 31,454
2. Proposal to approve the adjournment of the Special Meeting, if necessary
or appropriate, to solicit additional proxies if there are not sufficient
votes at the time of the Special Meeting to approve the Share Issuance:
Votes "For" Votes "Against" Abstentions
79,513,472 3,308,658 34,957
The Adjournment Proposal was rendered moot in light of the shareholders'
approval of the Share Issuance.
Cautionary Statement Regarding Forward Looking Statements
This communication contains "forward-looking statements" within the meaning of
the federal securities laws, including Section 27A of the Securities Act, and
Section 21E of the Exchange Act. In this context, forward-looking statements
often address expected future business and financial performance and financial
condition, and often contain words such as "expect," "anticipate," "intend,"
"plan," "believe," "seek," "see," "will," "would," "target," similar
expressions, and variations or negatives of these words. Forward-looking
statements by their nature address matters that are, to different degrees,
uncertain, such as statements about the N&B Transactions, the expected timetable
for completing the N&B Transactions, the benefits and synergies of the N&B
Transactions, future opportunities for the combined company and products, the
benefits of the proposed organizational and operating model of the combined
company and any other statements regarding DuPont's, IFF's and N&B's future
operations, financial or operating results, capital allocation, dividend policy,
debt ratio, anticipated business levels, future earnings, planned activities,
anticipated growth, market opportunities, strategies, competitions, and other
expectations and targets for future periods. There are several factors which
could cause actual plans and results to differ materially from those expressed
or implied in forward-looking statements. Such factors include, but are not
limited to, (1) the parties' ability to meet expectations regarding the timing,
completion and accounting and tax treatments of the N&B Transactions,
(2) changes in relevant tax and other laws, (3) any failure to obtain necessary
regulatory approvals, approval of IFF's shareholders, anticipated tax treatment
or any required financing or to satisfy any of the other conditions to the N&B
Transactions, (4) the possibility that unforeseen liabilities, future capital
expenditures, revenues, expenses, earnings, synergies, economic performance,
indebtedness, financial condition, losses, future prospects, business and
management strategies that could impact the value, timing or pursuit of the N&B
Transactions, (5) risks and costs and pursuit and/or implementation of the
separation of N&B, including timing anticipated to complete the separation, any
changes to the configuration of businesses included in the separation if
implemented, (6) risks related to indemnification of certain legacy liabilities
of E. I. du Pont de Nemours and Company ("Historical EID") in connection with
the distribution of Corteva Inc. on June 1, 2019 (the "Corteva Distribution"),
(7) potential liability arising from fraudulent conveyance and similar laws in
connection with DuPont's distribution of Dow Inc. on April 1, 2019 and/or the
Corteva Distributions (the "Previous Distributions"), (8) failure to effectively
manage acquisitions, divestitures, alliances, joint ventures and other portfolio
changes, including meeting conditions under the Letter Agreement entered in
connection with the Corteva Distribution, related to the transfer of certain
levels of assets and businesses, (9) uncertainty as to the long-term value of
DuPont common stock, (10) potential inability or reduced access to the capital
markets or increased cost of borrowings, including as a result of a credit
rating downgrade, (11) inherent uncertainties involved in the estimates and
judgments used in the preparation of financial statements and the providing of
estimates of financial measures, in accordance with the accounting principles
generally accepted in the United States of America and related standards, or on
an adjusted basis, (12) the integration of IFF and its Frutarom business and/or
N&B being more difficult, time consuming or costly than expected, (13) the
failure to achieve expected or targeted future financial and operating
performance and results, (14) the possibility that IFF may be unable to achieve
expected benefits, synergies and operating efficiencies in connection with the
N&B Transactions within the expected time frames or at all or to successfully
integrate Frutarom and N&B, (15) customer loss and business disruption being
greater than
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expected following the N&B Transactions, (16) the impact of divestitures
required as a condition to consummation of the N&B Transactions as well as other
conditional commitments, (17) legislative, regulatory and economic developments;
(18) an increase or decrease in the anticipated transaction taxes (including due
to any changes to tax legislation and its impact on tax rates (and the timing of
the effectiveness of any such changes)), (19) potential litigation relating to
the N&B Transactions that could be instituted against DuPont, IFF or their
respective directors, (20) risks associated with third party contracts
containing consent and/or other provisions that may be triggered by the N&B
Transactions, (21) negative effects of the announcement or the consummation of
the transaction on the market price of DuPont's and/or IFF's common stock,
(22) risks relating to the value of the IFF shares to be issued in the
transaction and uncertainty as to the long-term value of IFF's common stock,
(23) the impact of the failure to comply with U.S. or foreign anti-corruption
and anti-bribery laws and regulations, (24) the ability of N&B or IFF to retain
and hire key personnel, (25) the risk that N&B, as a newly formed entity that
currently has no credit rating, will not have access to the capital markets on
acceptable terms, (26) the risk that N&B and IFF will incur significant
indebtedness in connection with the potential transaction, and the degree to
which IFF will be leveraged following completion of the potential transaction
may materially and adversely affect its business, financial condition and
results of operations, (27) the ability to obtain or consummate financing or
refinancing related to the transaction upon acceptable terms or at all,
(28) that N&B may not achieve certain targeted cost and productivity
improvements, which could adversely impact its results of operations and
financial condition, (29) the risk that natural disasters, public health issues,
epidemics and pandemics, including the novel coronavirus (COVID-19), or the fear
of such events, could provoke responses that cause delays in the anticipated
transaction timing or the completion of transactions related thereto, including,
without limitation, as a result of any government or company imposed travel
restrictions or the closure of government offices and resulting delays with
respect to any matters pending before such governmental authorities and
(30) other risks to DuPont's, N&B's and IFF's business, operations and results
of operations including from: failure to develop and market new products and
optimally manage product life cycles; ability, cost and impact on business
operations, including the supply chain, of responding to changes in market
acceptance, rules, regulations and policies and failure to respond to such
changes; outcome of significant litigation, environmental matters and other
commitments and contingencies; failure to appropriately manage process safety
and product stewardship issues; global economic and capital market conditions,
including the continued availability of capital and financing, as well as
inflation, interest and currency exchange rates; changes in political
conditions, including tariffs, trade disputes and retaliatory actions;
impairment of goodwill or intangible assets; the availability of and
fluctuations in the cost of energy and raw materials; business or supply
disruption, including in connection with the Previous Distributions; security
threats, such as acts of sabotage, terrorism or war, natural disasters and
weather events and patterns, disasters, public health issues, epidemics and
pandemics, including COVID-19, or the fear of such events, and the inherent
unpredictability, duration and severity of such events, which could result in a
significant operational event for DuPont, N&B or IFF, adversely impact demand or
production; ability to discover, develop and protect new technologies and to
protect and enforce DuPont's, N&B's or IFF's intellectual property rights;, as
well as management's response to any of the aforementioned factors. These risks,
as well as other risks associated with the N&B Transactions, are more fully
discussed in the registration statement and proxy statement filed by IFF and the
registration statement filed by N&B. While the list of factors presented here
is, and the list of factors presented in registration statements filed by each
of IFF and N&B in connection with the transaction, are considered
representative, no such list should be considered to be a complete statement of
all potential risks and uncertainties. Unlisted factors may present significant
additional obstacles to the realization of forward-looking statements. Further
lists and descriptions of risks and uncertainties can be found in IFF's annual
report on Form 10-K for the year ended December 31, 2019, DuPont's annual report
on Form 10-K for the year ended December 31, 2019, and each of IFF's and
DuPont's respective subsequent reports
on Form 10-Q, Form 10-K and Form 8-K, the contents of which are not incorporated
by reference into, nor do they form part of, this announcement. Any other risks
associated with the N&B Transactions are more fully discussed in the
registration statements filed with the SEC. While the list of factors presented
here is, and the list of factors presented in the registration statements, as
amended, filed by each of IFF or N&B are representative, no such list should be
considered to be a complete statement of all potential risks and uncertainties.
Unlisted factors may present significant additional obstacles to the realization
of forward-looking statements. Consequences of material differences in results
as compared with those anticipated in the forward-looking statements could
include, among other things, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks, any of which
could have a material adverse effect on IFF's, DuPont's or N&B's consolidated
financial condition, results of operations, credit rating or liquidity. None of
IFF, DuPont nor N&B assumes any obligation to publicly provide revisions or
updates to any forward-looking statements, whether as a result of new
information, future developments or otherwise, should circumstances change,
except as otherwise required by securities and other applicable laws.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Second Amended and Restated Credit Agreement, dated as of August 25,
2020 among International Flavors & Fragrances Inc., International
Flavors & Fragrances (Nederland) Holding B.V. and International Flavors &
Fragrances I.F.F. (Nederland) B.V., as borrowers, the lenders signatory
thereto and Citibank, N.A. as administrative agent.
10.2 Amendment No. 3 to Credit Agreement, dated as of August 25, 2020 among
International Flavors & Fragrances Inc., as borrower, the lenders
signatory thereto and Morgan Stanley Senior Funding, Inc. as
administrative agent.
10.3 Amendment No. 1 to Credit Agreement, dated as of August 25, 2020, among
the Company, as borrower, the lenders signatory thereto and China
Construction Bank Corporation, New York Branch as administrative agent.
104 This cover page from this Current Report on Form 8-K, formatted in Inline
XBRL.
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