Subsequent events

3 Months Ended

Nov. 30, 2022

Subsequent Events [Abstract]

Subsequent events

Subsequent events

Acquisition of Summit Health-CityMD

On November 7, 2022, VillageMD entered into an Agreement and Plan of Merger (as amended, “the Agreement”) to acquire all of the outstanding equity interests in WP CityMD TopCo (“Summit Health-CityMD”).

On January 3, 2023, VillageMD, through its parent company following an internal reorganization, completed the acquisition of Summit Health-CityMD in exchange for $7.0 billion aggregate consideration, consisting of $4.85 billion of cash consideration paid, $2.05 billion in Preferred Units of VillageMD issued to Summit Health-CityMD equity holders and $100 million of cash to be paid one year following closing. In addition, VillageMD paid off approximately $1.9 billion in net debt of Summit Health-CityMD. In connection with the Agreement, and in order to finance the acquisition, the Company and Cigna Health & Life Insurance Company (“Cigna”) acquired Preferred Units of VillageMD in exchange for $1.75 billion and $2.5 billion in aggregate consideration, respectively. Following the Summit Health-CityMD acquisition, the Company remains the largest and consolidating equity holder of VillageMD with ownership of approximately 53% of the outstanding equity interests on a fully diluted basis.

Further, on January 3, 2023, the Company entered into a credit agreement with VillageMD pursuant to which the Company provided VillageMD senior secured credit facilities in the aggregate amount of $2.25 billion, consisting of (i) a senior secured term loan facility in an aggregate original principal amount of $1.75 billion to support the acquisition of Summit Health-CityMD; and (ii) a senior secured revolving credit facility in an aggregate original committed amount of $500 million available for general corporate purposes. In connection with the issuance of the senior secured credit facilities, the Company received a $220 million credit for certain fees payable by VillageMD in the form of Preferred Units of VillageMD. The intercompany senior secured credit facilities will eliminate in consolidation.

Delayed Draw Term Loan Credit Agreement

On December 19, 2022, the Company entered into a $1.0 billion senior unsecured delayed draw term loan credit agreement (the “Credit Agreement”). The Credit Agreement was fully drawn to fund the investment in VillageMD and matures on January 3, 2026. Borrowings under the Credit Agreement bear interest at a fluctuating rate per annum equal to, at the Company’s option, the alternate base rate, the term SOFR or the daily SOFR, in each case, plus an applicable margin. The applicable margin is in each case based on the rating of the Company’s corporate debt obligations as determined by Moody’s or S&P. Amounts borrowed under the Credit Agreement and repaid or prepaid may not be reborrowed.