Brady Corp. secures $1 billion credit agreement for Honeywell unit acquisition

Brady Corporation (NYSE: BRC) entered into a $1.0 billion credit agreement on June 12, 2026, in connection with its pending acquisition of Honeywell International Inc.'s Productivity Solutions and Services business.

The credit agreement, arranged with BMO Bank N.A. as administrative agent, consists of a $500 million term loan facility and a $500 million revolving credit facility, both maturing on June 12, 2031. Bank of America, N.A. serves as syndication agent, with BMO Capital Markets Corp., BofA Securities, Wells Fargo Bank, PNC Capital Markets, and CIBC Bank USA acting as joint lead arrangers and bookrunners.

The new agreement replaced Brady's previous credit facility, which dated to August 1, 2019. Outstanding revolving loans of €13.0 million under the prior agreement were exchanged into the new facility, with all remaining obligations repaid in full.

Availability under the revolving credit facility is capped at $300 million prior to the acquisition closing, expanding to the full $500 million commitment upon closing. The facility supports borrowings in multiple currencies, including dollars, euros, sterling, Australian dollars, Japanese yen, and Canadian dollars, with a letter of credit sublimit and swing line sublimit of $100 million each.

The term loan requires quarterly amortization payments of 1.25% of the original principal amount, beginning no earlier than three months after the acquisition closes. The agreement also includes an incremental facility feature allowing Brady to request up to $550 million in additional commitments, subject to leverage ratio conditions.

Key covenants include a maximum consolidated net leverage ratio of 3.50 to 1.00, temporarily raised to 4.00 to 1.00 for four computation periods following the acquisition close, and a minimum consolidated interest coverage ratio of 3.00 to 1.00.

Brady stated it intends to use the proceeds to finance the acquisition, cover related transaction costs, and fund capital expenditures and working capital needs.

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