Item 7.01 Regulation FD Disclosure
On December 20, 2021, subsidiaries of STERIS plc ("STERIS" or "the Company")
entered into an Asset Purchase Agreement to sell STERIS's Renal Care business to
certain subsidiaries of Evoqua Water Technologies Corp., for cash consideration
of approximately $196 million, subject to certain potential adjustments,
including a customary working capital adjustment. The transaction is subject to
customary closing conditions, including regulatory review, and is anticipated to
close in the first quarter of calendar year 2022. The Company anticipates using
the proceeds to pay down debt.
STERIS acquired the Renal Care business as part of the Cantel Medical
transaction, which closed on June 2, 2021, and was primarily integrated into
STERIS's Healthcare segment.
Evoqua Water Technologies is a leading provider of water and wastewater
treatment solutions, offering a broad portfolio of products, services and
expertise to support industrial, municipal and recreational customers.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Current Report on Form 8-K may contain statements concerning certain
trends, expectations, forecasts, estimates, or other forward-looking information
affecting or relating to STERIS or its industry, products or activities that are
intended to qualify for the protections afforded "forward-looking statements"
under the Private Securities Litigation Reform Act of 1995 and other laws and
regulations. Forward-looking statements speak only as to the date the statement
is made and may be identified by the use of forward-looking terms such as "may,"
"will," "expects," "believes," "anticipates," "plans," "estimates," "projects,"
"targets," "forecasts," "outlook," "impact," "potential," "confidence,"
"improve," "optimistic," "deliver," "orders," "backlog," "comfortable," "trend",
and "seeks," or the negative of such terms or other variations on such terms or
comparable terminology. Many important factors could cause actual results to
differ materially from those in the forward-looking statements including,
without limitation, disruption of production or supplies, changes in market
conditions, political events, pending or future claims or litigation,
competitive factors, technology advances, actions of regulatory agencies, and
changes in laws, government regulations, labeling or product approvals or the
application or interpretation thereof. Other risk factors are described in
STERIS's other securities filings, including Item 1A of our Annual Report on
Form 10-K for the year ended March 31, 2021 and subsequently filed Quarterly
Reports on Form 10-Q. Many of these important factors are outside of STERIS's
control. No assurances can be provided as to any result or the timing of any
outcome regarding matters described in STERIS's securities filings or otherwise
with respect to any regulatory action, administrative proceedings, government
investigations, litigation, warning letters, cost reductions, business
strategies, earnings or revenue trends or future financial results. References
to products are summaries only and should not be considered the specific terms
of the product clearance or literature. Unless legally required, STERIS does not
undertake to update or revise any forward-looking statements even if events make
clear that any projected results, express or implied, will not be realized.
Other potential risks and uncertainties that could cause actual results to
differ materially from those in the forward-looking statements include, without
limitation, (a) the impact of the COVID-19 pandemic on STERIS's operations,
supply chain, material and labor costs, performance, results, prospects, or
value, (b) STERIS's ability to achieve the expected benefits regarding the
accounting and tax treatments of the redomiciliation to Ireland
("Redomiciliation"), (c) operating costs, Customer loss and business disruption
(including, without limitation, difficulties in maintaining relationships with
employees, Customers, clients or suppliers) being greater than expected
following the Redomiciliation, (d) STERIS's ability to successfully integrate
the businesses of Cantel Medical into our existing businesses, including unknown
or inestimable liabilities, or increases in expected integration costs or
difficulties in connection with the integration of Cantel Medical, (e) STERIS's
ability to meet expectations regarding the accounting and tax treatment of the
Tax Cuts and Jobs Act ("TCJA") or the possibility that anticipated benefits
resulting from the TCJA will be less than estimated, (f) changes in tax laws or
interpretations that could increase our consolidated tax liabilities, including
changes in tax laws that would result in STERIS being treated as a domestic
corporation for United States federal tax purposes, (g) the potential for
increased pressure on pricing or costs that leads to erosion of profit margins,
(h) the possibility that market demand will not develop for new technologies,
products or applications or services, or business initiatives will take longer,
cost more or produce lower benefits than anticipated, (i) the possibility that
application of or compliance with laws, court rulings, certifications,
regulations, regulatory actions, including without limitation any of the same
relating to FDA, EPA or other regulatory authorities, government investigations,
the outcome of any pending or threatened FDA, EPA or other regulatory warning
notices, actions, requests, inspections or submissions, or other requirements or
standards may delay, limit or prevent new product or service introductions,
affect the production, supply and/or marketing of existing products or services
or otherwise affect STERIS's performance, results, prospects or value, (j) the
potential of international unrest, economic downturn or effects of currencies,
tax assessments, tariffs and/or other trade barriers, adjustments or anticipated
rates, raw material costs or availability, benefit or retirement plan costs, or
other regulatory compliance costs, (k) the possibility of reduced demand, or
reductions in the rate of growth in demand, for STERIS's products and services,
(l) the possibility of delays in receipt of orders, order cancellations, or
delays in the manufacture or shipment of ordered products or in the provision of
services, (m) the possibility that anticipated growth, cost savings, new product
acceptance, performance or approvals, or other results may not be achieved, or
that transition, labor, competition, timing, execution, regulatory,
governmental, or other issues or risks associated with STERIS's businesses,
industry or initiatives including, without limitation, those matters described
in our Annual Report on Form 10-K for the year ended March 31, 2021, and other
securities filings, may adversely impact STERIS's performance, results,
prospects or value, (n) the impact on STERIS and its operations, or tax
liabilities, of Brexit or the exit of other member countries from the EU, and
the Company's ability to respond to such impacts, (o) the impact on STERIS and
its operations of any legislation, regulations or orders, including but not
limited to any new trade or tax legislation, regulations or orders, that may be
implemented by the U.S. administration or Congress, or of any responses thereto,
(p) the possibility that anticipated financial results or benefits of recent
acquisitions, including the acquisition of Cantel Medical and Key Surgical, or
of STERIS's restructuring efforts, or of recent divestitures, including
anticipated revenue, productivity improvement, cost savings, growth synergies
and other anticipated benefits, will not be realized or will be other than
anticipated, (q) the increased level of STERIS's indebtedness incurred in
connection with the acquisition of Cantel Medical limiting financial flexibility
or increasing future borrowing costs, (r) rating agency actions that could
affect STERIS's existing debt or future ability to borrow funds at rates
favorable to STERIS or at all, (s) the potential impact of the acquisition of
Cantel Medical on relationships, including with suppliers, Customers, employees
and regulators, (t) the effects of contractions in credit availability, as well
as the ability of STERIS's Customers and suppliers to adequately access the
credit markets when needed and (u) our ability to close the proposed sale of the
Renal care business.
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