Cadence Design Systems Files 8-K: Material Agreement & Equity Sales

TL;DR

CDNS filed an 8-K for a material agreement and equity sales on 5/30.

AI Summary

On May 30, 2024, Cadence Design Systems, Inc. entered into a material definitive agreement related to a direct financial obligation. The company also reported on unregistered sales of equity securities and filed financial statements and exhibits.

Why It Matters

This filing indicates Cadence Design Systems has entered into a significant agreement that creates a financial obligation, and has also engaged in equity transactions, which could impact its financial structure and shareholder equity.

Risk Assessment

Risk Level: medium — The filing involves a material definitive agreement and financial obligations, which inherently carry some level of risk that needs further investigation.

Key Players & Entities

• CADENCE DESIGN SYSTEMS, INC. (company) — Registrant
• May 30, 2024 (date) — Date of earliest event reported
• 0000813672-24-000125 (document_id) — Accession Number
• 2655 Seely Avenue, San Jose, California 95134 (address) — Principal Executive Offices

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share CDNS Nasdaq Global
• $700 million — "Company" or "Cadence") entered into a $700 million two-year senior unsecured term loan cre
• $250 million — acquisition by the Company of at least $250 million that results in a pro forma leverage ra

Filing Documents

• cdns-20240530.htm (8-K) — 33KB
• ex101cdns06032024.htm (EX-10.1) — 767KB
• 0000813672-24-000125.txt ( ) — 1051KB
• cdns-20240530.xsd (EX-101.SCH) — 2KB
• cdns-20240530_lab.xml (EX-101.LAB) — 21KB
• cdns-20240530_pre.xml (EX-101.PRE) — 12KB
• cdns-20240530_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. On May 30, 2024, Cadence Design Systems, Inc. (the "Company" or "Cadence") entered into a $700 million two-year senior unsecured term loan credit facility (the "Facility") pursuant to a loan agreement (the "Loan Agreement") with Bank of America, N.A., as a lender and administrative agent, the other lenders party thereto and BofA Securities, Inc., JPMorgan Chase Bank, N.A. and HSBC Bank USA, National Association, as joint lead arrangers and joint bookrunners. All of the proceeds from the Facility were used to finance the Company's previously announced acquisition of BETA CAE Systems International AG, a Swiss company limited by shares (together with its subsidiaries, "BETA CAE"). Amounts outstanding under the Loan Agreement will accrue interest at a rate equal to, at the Company's option, either (1) Term SOFR (as defined in the Loan Agreement) plus a margin of between 0.875% per annum and 1.375% per annum depending on the Company's debt rating, plus a credit spread adjustment of 0.10%, or (2) base rate plus a margin of between 0.0% per annum and 0.375% per annum depending on the Company's debt rating. The covenants of the Loan Agreement include customary negative covenants that, among other things, restrict the Company's ability to incur additional indebtedness, grant liens and make certain asset dispositions. In addition, the Loan Agreement contains a financial covenant that requires the Company to maintain a funded debt to Consolidated EBITDA (as defined in the Loan Agreement) ratio not greater than 3.25 to 1, with a step-up to 3.75 to 1 for one year following an acquisition by the Company of at least $250 million that results in a pro forma leverage ratio between 3.00 to 1 and 3.50 to 1. The foregoing description is qualified in its entirety by reference to the Loan Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference. Item 2.03. Creation of a Direct Financial Obligati

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. As previously reported, on March 2, 2024, the Company entered into a Share Purchase Agreement (the "Purchase Agreement") with the shareholders of BETA CAE (collectively, the "Sellers") to purchase from the Sellers the entire issued share capital of BETA CAE (such transaction, the "Acquisition"). In connection with completion of the Acquisition on May 30, 2024, Cadence issued an aggregate of 1,740,931 shares of Cadence's common stock, par value $0.01 per share (the "Stock Consideration") to the Sellers as partial consideration for the Acquisition. Cadence issued the Stock Consideration in reliance upon the exemptions from registration afforded by Section 4(a)(2), Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act"), and/or Regulation S promulgated under the Securities Act.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 10.1 Loan Agreement, dated May 30 , 2024, by and among Cadence Design Systems, Inc., Bank of America, N.A. and the other lenders party thereto. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: June 3, 2024 CADENCE DESIGN SYSTEMS, INC. By: /s/ John M. Wall John M. Wall Senior Vice President and Chief Financial Officer