Subsequent Events

12 Months Ended

Jan. 03, 2020

Subsequent Events [Abstract]

Subsequent Events

Note 27—Subsequent Events

Debt Financing

On January 17, 2020 (the “Closing Date"), the Company entered into a Credit Agreement (the “Credit Agreement”) with certain financial institutions, which provides for a senior unsecured term loan A facility in an aggregate principal amount of $1.9 billion (the “Term Loan Facility”) and a $750 million senior unsecured revolving facility (the “Revolving Facility” and, together with the Term Loan Facility, the “Credit Facilities”). As a result of the Credit Agreement, the Refinancing Bridge Facility was terminated without being funded. The Credit Facilities will mature five years from the Closing Date, subject to up to two additional one year extensions.

The Company used the proceeds of the Term Loan Facility and cash on hand on the Closing Date to repay in full all indebtedness, and terminate all commitments, under, and discharge and release all guarantees and liens existing in connection with the Credit Agreements entered into in August 2016 ("the Terminated Credit Agreements"). The obligations under the Credit Agreement are guaranteed by intercompany guarantees. As a result of the termination of the liens under the Terminated Credit Agreements, the liens securing the Company’s outstanding $450 million notes due 2020 and $300 million notes due 2040 were also released and such notes are now the Company’s senior unsecured obligations.

Borrowings under the Credit Agreement bear interest at a rate determined, at the Company's option, based on either an alternate base rate or a LIBOR rate plus, in each case, an applicable margin that varies depending on the credit rating of the Borrower.

Sale of Accounts Receivable

During 2019, the Company entered into a Master Accounts Receivable Purchase Agreement with a financial institution which provides the Company the election to sell accounts receivable, at a discount, up to a maximum of $200 million. This agreement is an uncommitted facility with no expiration date.

On January 28, 2020, the Company sold $200 million of accounts receivable under the agreement and received proceeds of $200 million on January 30, 2020.

Dynetics Acquisition

On January 31, 2020 (the "Acquisition Date"), the Company completed the acquisition of Dynetics. The Company purchased all of the issued and outstanding shares of common stock of Dynetics for $1.65 billion in cash.

In connection with the acquisition of Dynetics, the Company entered into a Bridge Credit Agreement with certain financial institutions, which provides for a senior unsecured 364-day bridge loan facility in an aggregate principal amount of $1.25 billion (the "Bridge Facility"). The Bridge Facility will mature 364 days after the Acquisition Date.

The Company used the proceeds of the Bridge Facility and cash on hand on the Acquisition Date to fund the purchase of Dynetics and repay in full all third party indebtedness of Dynetics, terminate all commitments thereunder and discharge and release all existing guarantees and liens.

Borrowings under the Bridge Credit Agreement bear interest at a rate determined, at the Company's option, based on either an alternate base rate or a LIBOR rate plus, in each case, an applicable margin that varies depending on the credit rating of the Borrower, subject to increases at 90, 180 and 270 days after the Acquisition Date.

L3Harris Transaction

On February 3, 2020, the Company entered into a definitive agreement to acquire L3Harris' security detection and automation businesses for cash consideration of $1.0 billion, subject to net working capital adjustments, if any. L3Harris' security detection and automation businesses provide airport and critical infrastructure screening products, automated tray return systems and other industrial automation products. The transaction is expected to close by the end of the second quarter of fiscal 2020.

On February 12, 2020, the Company obtained a debt financing commitment of $1.0 billion from certain financial institutions in connection with the L3Harris transaction. The maturity date will be two years from the funding date if the Company draws on this commitment.