What changed in this filing

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Item 1A. Risk Factors

2022-05-31 compared with 2021-05-28 · 90 added, 99 removed, 267 unchanged (41% of the section changed)

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In addition, the impact of the COVID-19 pandemic may also exacerbate any of these risks, which could have a material effect on us.

Although the risks are organized by headings, and each risk is discussed separately, many are interrelated.

Should any of these risks, described below or otherwise, actually occur, our business, financial condition, performance, prospects, value, or results of operations could be negatively affected.

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While our employees and agents are required to comply with these laws, we cannot assure you that our internal policies and procedures will always protect us from violations of these laws, despite our commitment to legal compliance and corporate ethics.

The COVID-19 pandemic has disrupted our operations and could have a material adverse effect on our business and financial condition.

The COVID-19 pandemic, along with the response to the pandemic by governmental and other actors, has disrupted our operations.

We have experienced temporary mandatory and voluntary facility closures in certain jurisdictions in which we operate.

Furthermore, we have experienced less demand for certain of our products and services as a result of deferrals of certain medical procedures, and other factors, which we believe was exacerbated by the impact of stay-at-home orders.

Additionally, the COVID-19 outbreak has caused temporary disruptions in our supply chain.

Long-term facility closures or other restrictions could materially adversely affect our ability to adequately staff, supply or otherwise maintain our operations.

Such restrictions also may have a substantial impact on our Customers and our sales cycles.

The COVID-19 pandemic may put pressure on overall spending for our products and services, and may cause our Customers to modify spending priorities or delay or abandon purchasing decisions.

Moreover, because a large number of our employees have been working from home, we may be subject to increased vulnerability to cyber and other information technology risks.

We have modified, and may further modify, our business practices in response to the risks and negative impacts associated with the COVID-19 pandemic.

However, there can be no assurance that these measures will be temporary or successful.

The impact of the COVID-19 pandemic continues to evolve and its ultimate duration, severity and disruption to our business, Customers and supply chain, and the related financial impact to us, cannot be accurately forecasted at this time.

Should such disruption continue for an extended period, the adverse effect on our business, results of operations and financial condition could be more severe.

Additionally, weak economic conditions, the pace for economic recovery, and raising inflation, could result in extended weak demand for our products and services.

Furthermore, future public health crises are possible and could involve some or all of the risks discussed above.

Changes in economic climate may adversely affect us.

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Our exposure to bad debt losses could also increase if Customers are unable to pay for products previously ordered and delivered.

Many of our Customers are governmental entities or other entities that rely on government healthcare systems or government funding.

Some of our Customers are governmental entities or other entities that rely on government healthcare systems or government funding.

If government funding for healthcare becomes limited or restricted in countries in which we operate, including as a result of the impacts of the COVID-19 pandemic, our Customers may be unable to pay their obligations on a timely basis or to make payment in full and it may become necessary to increase reserves.

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Our recent acquisitions have been financed largely through cash on hand and borrowings under our bank credit facilities and through public note offerings in early April of fiscal 2022.

Future acquisitions, including the pending acquisition of Cantel Medical Corp ("Cantel"), or other capital requirements will necessitate additional cash.

Future acquisitions or other capital requirements will necessitate additional cash.

To the extent our existing sources of cash are insufficient to fund these or other future activities, we have and may need to raise additional funds through new or expanded borrowing arrangements or equity.

There can be no assurance that we will be able to obtain additional funds beyond those available under existing bank credit facilities on terms favorable to us, or at all, or that such facilities can be replaced when they terminate.

The current military conflict between Russia and Ukraine and its implications on U.S., Canadian and European Union relations with Russia could cause long term geopolitical and economic instability that may impact our future operating results.

In response to the military conflict between Russia and Ukraine that began in February 2022, the United States, other North Atlantic Treaty Organization member states, as well as non-member states, announced targeted economic sanctions on Russia.

The long-term impact on our business resulting from the disruption of trade in the region caused by the conflict and associated sanctions and boycotts is uncertain at this time due to the fluid nature of the ongoing military conflict and response.

The potential impacts include supply chain and logistics disruptions, financial impacts including volatility in foreign exchange and interest rates, increased inflationary pressure on raw materials and energy, and other risks including an elevated risk of

cybersecurity threats and the potential for further sanctions.

We have stopped operating in Russia and Belarus, which includes shipments to Customers and purchases of cobalt-60 from our Russian supplier.

Our operations located in the region did not represent a material portion of our consolidated assets or revenues.

A long-term disruption in cobalt-60 sourced from Russia may negatively impact gamma processing capacity or increase costs in certain portions of our AST operations but these impacts are not expected to be material to our AST segment and its results of operations.

The COVID-19 pandemic disrupted our operations and could have a material adverse effect on our business and financial condition if further significant disruptions occur.

The COVID-19 pandemic, along with the response to the pandemic by governmental and other actors, disrupted our operations.

We experienced temporary mandatory and voluntary facility closures in certain jurisdictions in which we operate.

Additionally, the COVID-19 outbreak has caused temporary disruptions and rising costs in our supply chain and distribution network.

Long-term facility closures or other restrictions could materially adversely affect our ability to adequately staff, supply or otherwise maintain our operations.

Such restrictions also may have a substantial impact on our Customers and our sales cycles.

The COVID-19 pandemic may put pressure on overall spending for our products and services, and may cause our Customers to modify spending priorities or delay or abandon purchasing decisions.

Moreover, because a large number of our employees have been and will continue to work from home routinely, we may be subject to increased vulnerability to cyber and other information technology risks.

We have modified, and may further modify, our business practices in response to the risks and negative impacts associated with the COVID-19 pandemic.

However, there can be no assurance that these measures will be temporary or successful.

Should such additional significant disruptions occur and continue for an extended period, the adverse effect on our business, results of operations and financial condition could be more severe.

Additionally, weak economic conditions, the pace for economic recovery, and rising inflation, could result in extended weak demand for our products and services.

Furthermore, future public health crises are possible and could involve some or all of the risks discussed above.

Healthcare Laws and Reimbursement

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Additionally, in some foreign countries with weaker intellectual property rights, it may be difficult to maintain and enforce patents and other proprietary rights or defend against claims of infringement.

Tax and Trade Risk

We might be adversely impacted by tax legislation or challenges to our tax positions.

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We have developed a plan to expand our irradiation processing capacity with accelerator-based technologies which may reduce the potential supply risk.

Shortages in supply, increased regulatory or security requirements, or increases in the price of raw materials, components and energy supplies may adversely affect us.

Shortages in supply, increased regulatory or security requirements, or increases in the price of raw materials, components and energy supplies may adversely affe ct us.

In response to the active conflict between Russian and Ukraine, we have stopped purchasing cobalt-60 from our Russian supplier.

Our operations, and those of our suppliers, are subject to a variety of business continuity hazards and risks, any of which could interrupt production or operations or otherwise adversely affect our performance, results, or value.

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Our operations are subject to regulations and permitting, which may be changed or amended by the relevant authorities, and which may limit or eliminate our current operations or increase the complexity, burden, or expense of compliance and regulated materials or processes that we use in our operations may become the focus of litigation.

Our Applied Sterilization Technologies (“AST”) segment is a technology-neutral contract sterilization service that offers our Customers a wide range of sterilization modalities through a worldwide network of over 50 contract sterilization and laboratory facilities.

One of the modalities offered by our AST operations is Ethylene Oxide (“EO”) sterilization.

In the United States, several regulators, including the U.S.

Environmental Protection Agency (“EPA”), U.S.

Food and Drug Administration (“FDA”), and agencies at the state and local level, play a role in regulating the use of EO sterilization.

Our AST segment is a technology-neutral contract sterilization service that offers our Customers a wide range of sterilization modalities through a worldwide network of over 50 contract sterilization and laboratory facilities.

One of the modalities offered by our AST operations is EO sterilization.

In the United States, several regulators, including the EPA, FDA, and agencies at the state and local level, play a role in regulating the use of EO sterilization.

In 2016, the EPA changed the cancer risk basis for EO and determined that EO is carcinogenic to humans.

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Implementation costs also might exceed expectations.

Increases in costs of doing business may have a material adverse effect on our financial condition and results of operations.

The COVID-19 pandemic or similar public health crises could have a material adverse impact on ability to staff our operations.

As supplier to Healthcare and Life Sciences Customers, we fall within a “critical infrastructure” sector, and are also considered an essential business and therefore exempt under various stay at home/shelter in place orders.

Accordingly, our employees continue to work because of the importance of our operations to the health and well-being of citizens in the countries in which we operate.

We have implemented telework policies wherever possible for appropriate categories of employees.

However, our employees that are unable to telework continue to work at our facilities and those of our Customers, and we have implemented appropriate safety measures, such as social distancing and increased cleaning protocols.

While we believe that we have taken appropriate measures to ensure the health and well-being of our employees, there can be no assurances that our measures will be sufficient to protect our employees in our workplace or that they may not otherwise be exposed to COVID-19 outside of our workplace.

As supplier to Healthcare and Life Sciences Customers, we fall within a “critical infrastructure” sector, and are also considered an essential business and therefore were exempt under various stay at home/shelter in place orders associated with COVID-19.

Accordingly, our employees continued to work because of the importance of our operations to the health and well-being of citizens in the countries in which we operate.

We implemented telework policies wherever possible for appropriate categories of employees.

However, our employees that are unable to telework continued to work at our facilities and those of our Customers, and we implemented appropriate safety measures, such as social distancing and increased cleaning protocols.

While we believe that we have developed appropriate measures to ensure the health and well-being of our employees, there can be no assurances that our measures will be sufficient to protect our employees in our workplace or that they may not otherwise be exposed to COVID-19 or similar illness outside of our workplace.

If a number of our essential employees become ill, incapacitated or are otherwise unable or unwilling to continue working during the current or any future health crises, our operations may be adversely impacted.

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We rely extensively on information technology (IT) systems to conduct business.

In addition, we rely on networks and services, including internet sites, data hosting and processing facilities and tools and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided and/or used by third-parties or their vendors, to assist in conducting our business.

Numerous and evolving cybersecurity threats pose potential risks to the security of our IT systems, networks and services, as well as the confidentiality, availability and integrity of our data.

While we have made investments seeking to address these threats, including monitoring of networks and systems, hiring of experts, employee training and security policies for employees and third-party providers, the techniques used in these attacks change frequently and may be difficult to detect for periods of time and we may face difficulties in anticipating and implementing adequate preventative measures.

While we have been the previous target of cyberattacks and security breaches, none of these attacks or breaches to date have had a material adverse effect on the Company.

We cannot guarantee that future cyberattacks, if successful, will not have a material effect on our business or financial results.

Numerous and evolving cybersecurity threats continue to pose potential risks to the security of our IT systems, networks and services, as well as the confidentiality, availability and integrity of our data.

While we have made investments seeking to address these threats, including monitoring of networks and systems, hiring of exp erts, employee training and security policies for employees and third-party providers, the techniques used in these attacks change frequently and may be difficult to detect for periods of time and we may face difficulties in anticipating and implementing adequate preventative measures.

If our IT systems are damaged or cease to function properly, the networks or service providers we rely upon fail to function properly, or we or one of our third-party providers suffer a loss or disclosure of our business or stakeholder information due to any number of causes ranging from catastrophic events or power outages to improper data handling or security breaches and our business continuity plans do not effectively address these failures on a timely basis, we may be exposed to reputational, competitive and business harm as well as litigation and regulatory action.

In addition, the COVID-19 pandemic may increase the risk of such vulnerability and attacks, including unauthorized access or attacks exploiting the fact that a large number of employees are working remotely during government shutdowns and closures.

Furthermore, their has also been an increase in cyber incidents that appears to be associated with the Ukraine-Russia military conflict.

Enforcement of the General Data Protection Regulation (“GDPR”) was effective as of May 2018.

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The GDPR creates a range of new compliance obligations and will significantly increase financial penalties for noncompliance (including possible fines of up to 4% of global annual revenues for the preceding financial year or €20 million (whichever is higher) for the most serious infringements).

RISKS RELATED TO THE PENDING ACQUISITION OF CANTEL MEDICAL, CORP.

The market price of STERIS Shares may continue to fluctuate after the mergers.

Upon completion of the mergers, holders of Cantel Common Stock will become holders of STERIS Shares.

The market price of STERIS Shares may fluctuate significantly following completion of the mergers and holders could lose some or all of the value of their investment in STERIS Shares.

In addition, the stock market has experienced significant price and volume fluctuations in recent times, which, if they continue to occur, could have a material adverse effect on the market for, or liquidity of, the STERIS Shares, regardless of STERIS’s actual operating performance.

Failure to complete the mergers or delays could negatively impact the price of STERIS Shares, as well as STERIS’s respective future business and financial results.

The anticipated completion date of the mergers is June 2, 2021.

However, the merger agreement contains conditions that remain to be satisfied or waived prior to the completion of the mergers.

There can be no assurance that the remaining conditions to the mergers will be so satisfied or waived.

If the conditions to the mergers are not satisfied or waived, STERIS and Cantel will be unable to complete the mergers and the merger agreement may be terminated.

Furthermore, the delay in the fulfillment of such conditions could result in unanticipated expenditures of funds and other resources and/or reduce the benefits of the acquisition of Cantel, even if ultimately consummated.

The mergers may not be accretive, and may be dilutive, to STERIS’s earnings per share and cash flow from operations per share, which may negatively affect the market price of STERIS Shares.

The mergers may not be accretive, and may be dilutive, to STERIS’s earnings per share and cash flow from operations per share.

Future events and conditions could decrease or delay any expected accretion, result in dilution or cause greater dilution than is currently expected, including adverse changes in market conditions, production levels, operating results, competitive conditions, laws and regulations affecting STERIS, capital expenditure obligations, higher than expected integration costs, lower than expected synergies and general economic conditions.

Any dilution of, or decrease or delay of any accretion to, STERIS’s earnings per share or cash flow from operations per share could cause the price of the STERIS Shares to decline.

STERIS will incur significant transaction and merger-related costs in connection with the mergers, which may be in excess of those anticipated.

STERIS has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement.

STERIS expects to continue to incur a number of non-recurring costs associated with completing the mergers and combining the operations of the two companies and achieving desired synergies.

These fees and costs have been, and will continue to be, substantial.

Most of the non-recurring expenses will consist of transaction costs related to the mergers and include, among others, employee retention costs, fees paid to financial, legal and accounting advisors, fees paid to banks and other financial institutions in conjunction with obtaining financing and other related costs, severance and benefit costs and filing fees.

STERIS will also incur transaction fees and costs related to formulating and implementing integration plans, costs to consolidate facilities and systems and employment-related costs.

STERIS will continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the mergers and the integration of the two companies’ businesses.

Although STERIS expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow STERIS to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

See the risk factor entitled “The integration of Cantel into STERIS may not be as successful as anticipated” below.

The costs described above, as well as other unanticipated costs and expenses, could have a material adverse effect on the financial condition and operating results of STERIS following the completion of the mergers.

Many of these costs will be borne by STERIS even if the mergers are not completed.

Lawsuits have been filed against Cantel, STERIS and the members of the Cantel Board of Directors challenging the adequacy of the disclosures made in the proxy statement/prospectus and an adverse ruling in one or more of these lawsuits may prevent the mergers from being completed.

Lawsuits arising out of the mergers have been filed and may be filed in the future.

There can be no assurance that any of the defendants will be successful in the outcome of any potential future lawsuits.

A preliminary injunction could delay or jeopardize the completion of the mergers, and an adverse judgment granting permanent injunctive relief could indefinitely enjoin the completion of the mergers.

Completion of the mergers will trigger change in control or other provisions in certain agreements to which Cantel is a party .

Completion of the mergers will trigger change in control or other provisions in certain agreements to which Cantel is a party.

To the extent STERIS and Cantel are unable to negotiate waivers of those provisions, the counterparties may exercise their rights and remedies under the agreements, potentially terminating the agreements or seeking monetary damages.

Even if STERIS and Cantel are able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to Cantel.

We will incur a substantial amount of additional debt to complete the mergers.

Our debt after completion of the mergers may limit our financial and business flexibility.

We intend to fund the cash consideration of the merger consideration, as well as the refinancing, prepayment, replacement, redemption, repurchase, settlement upon conversion, discharge or defeasance of certain existing indebtedness of Cantel and its subsidiaries, transaction expenses, general corporate expenses and working capital needs, through the incurrence of approximately $2.1 billion of new indebtedness, which includes $1.350 billion of senior notes issued April 1, 2021 and a new delayed draw term loan agreement in the amount of $750 million to be borrowed upon completion of the mergers.

As of January 31, 2021, Cantel had approximately $1.0 billio n of long-term indebtedness, including convertible debt, outstanding.

As of March 31, 2021, STERIS had approximate ly $1.7 billion of lon g-term indebtedness outstanding.

STERIS’s ability to repay all the forgoing obligations will depend on, among other things, STERIS’s financial position and performance, as well as prevailing market conditions and other factors beyond our control.

Our increased indebtedness after completion of the mergers could have important consequences to shareholders of STERIS Shares, including Cantel Stockholders who receive STERIS Shares as a result of the mergers, including increasing STERIS’s vulnerability to general adverse economic and industry conditions, limiting our ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements, requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on its indebtedness, thereby reducing its ability to use its cash flow to fund working capital, acquisitions, capital expenditures and general corporate requirements, including dividend payments and stock repurchases, limiting our flexibility in planning for, or reacting to, changes in its business and its industry and creating a disadvantage compared to our competitors with less indebtedness.

Net sales and profitability of our Dental segment are highly dependent on our relationships with a limited number of large distributors.

The distribution network in the U.S.

dental industry is concentrated, with relatively few distributors of consumable products accounting for a significant share of the sales volume to dentists.

Historically, the top three Customers of Cantel's Dental segment accounted for more than 40.0% of its revenues.

The loss of a significant amount of business from any of these Customers would have a material adverse effect on our Dental segment.

In addition, because our Dental segment products are primarily sold through third-party distributors and not directly to end users, we cannot control the amount and timing of resources that our distributors devote to our products.

There can be no assurance that there will not be a loss or reduction in business from one or more of our major Customers.

In addition, we cannot assure that revenues from Customers that have accounted for significant revenues in the past, either individually or as a group, will reach or exceed historical levels in any future period.

RISKS RELATED TO THE ACQUISITION OF CANTEL MEDICAL

The integration of Cantel into STERIS may not be as successful as anticipated.

The mergers involve numerous operational, strategic, financial, accounting, legal, tax and other risks;

The integration involves numerous operational, strategic, financial, accounting, legal, tax and other risks;

potential liabilities associated with the acquired businesses;

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Difficulties in integrating Cantel into STERIS may result in Cantel performing differently than expected, in operational challenges or in the failure to realize anticipated expense-related efficiencies.

STERIS’s and Cantel’s existing businesses could also be negatively impacted by the mergers.

STERIS’s and Cantel’s existing businesses could also be negatively impacted by the actions.

Potential difficulties that may be encountered in the integration process include, among other factors:

• the inability to successfully integrate the business of Cantel into STERIS in a manner that permits STERIS to achieve the full revenue and cost savings anticipated from the mergers;

• the inability to successfully integrate the business of Cantel into STERIS in a manner that permits STERIS to achieve the full revenue and cost savings anticipated from the acquisition;

• complexities associated with managing the larger, more complex, integrated business;

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• integrating personnel from the two companies while maintaining focus on providing consistent, high-quality products and services;

• potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with the mergers;

• potential unknown liabilities and unforeseen expenses associated with the acquisition;

• loss of key employees;

• integrating relationships with Customers, vendors and business partners;

• performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by completing the mergers and integrating Cantel’s operations into STERIS;

• performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by integrating Cantel’s operations into STERIS;

• the disruption of, or the loss of momentum in, each company’s ongoing business or inconsistencies in standards, controls, procedures and policies.

Our performance may suffer if we do not effectively manage our expanded operations following the mergers

Following completion of the mergers, our success will depend, in part, on our ability to manage the expansion, which poses numerous risks and uncertainties, including the need to integrate the operations and business of Cantel into our existing business in an efficient and timely manner, to combine systems and management controls and to integrate relationships with Customers, vendors and business partners.

Even if STERIS and Cantel complete the mergers, we may fail to realize all of the anticipated benefits of the proposed mergers, or those benefits may take longer to realize than expected.

The success of the mergers will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining the businesses, including the approximately $110 million in annualized pre-tax cost synergies that we expect to realize within the first four fiscal years after the completion of the mergers.

The anticipated benefits and cost savings of the mergers may not be realized fully or at all, may take longer to realize than expected, may require more non-recurring costs and expenditures to realize than expected or could have other adverse effects that we do not currently foresee.

The acquisition of Cantel may not be as accretive to STERIS’s earnings per share and cash flow from operations per share, which may negatively affect the market price of STERIS Shares.

The acquisition may not be as accretive to STERIS’s earnings per share and cash flow from operations per share.

Any decrease or delay of any accretion to, STERIS’s earnings per share or cash flow from operations per share could cause the price of the STERIS's ordinary shares to decline.

STERIS has incurred and will incur significant transaction and acquisition-related costs in connection with the acquisition, which may be in excess of those anticipated.

STERIS has incurred substantial expenses in connection with the negotiation and completion of the acquisition of Cantel and related transactions.

STERIS expects to continue to incur a number of non-recurring costs associated with combining the operations of STERIS and Cantel achieving desired synergies.

These fees and costs have been, and will continue to be, substantial.

The non-recurring expenses include, among others, employee retention costs, fees paid to financial, legal and accounting advisors, and severance and benefit costs.

STERIS will also incur and has incurred costs related to implementing integration plans, costs to consolidate facilities and systems and employment-related costs.

Additional unanticipated costs may be incurred in the integration of the two companies’ businesses.

Although STERIS expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the STERIS and Cantel businesses, should allow STERIS to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

See the risk factor titled “The integration of Cantel into STERIS may not be as successful as anticipated” below.

The costs described above, as well as other unanticipated costs and expenses, could have a material adverse effect on the financial condition and operating results.

We incurred a substantial amount of additional debt to complete the acquisition.

Our debt level may limit our financial and business flexibility.

We funded the cash portion of the acquisition consideration, as well as the refinancing, prepayment, replacement, redemption, repurchase, settlement upon conversion, discharge or defeasance of certain existing indebtedness of Cantel and its subsidiaries, transaction expenses, general corporate expenses and working capital needs, through the incurrence of approximately $2.1 billion of new indebtedness, which includes $1.350 billion of senior notes issued April 1, 2021 and a new delayed draw term loan agreement in the amount of $750 million.

We also refinanced or settled approximately $1.0 billion of Cantel's long-term indebtedness, including convertible debt, outstanding.

As of March 31, 2022, STERIS had approximately $2.9 billion of long-term indebtedness outstanding.

Our increased indebtedness could have important consequences to our shareholders, including increasing STERIS’s vulnerability to general adverse economic and industry conditions, limiting our ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements, requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on indebtedness, thereby reducing our ability to use our cash flow to fund working capital, acquisitions, capital expenditures and general corporate matters, including dividend payments and stock repurchases, limiting our flexibility in planning for, or reacting to, changes in its business and our industry and creating a disadvantage compared to our competitors with less indebtedness.

Our performance may suffer if we do not effectively manage our expanded operations.

Our success will depend, in part, on our ability to manage the expansion, which poses numerous risks and uncertainties, including the need to integrate the operations and business of Cantel into our existing business in an efficient and timely manner, to combine systems and management controls and to integrate relationships with Customers, vendors and business partners.

We may fail to realize all of the anticipated benefits of the acquisition, or those benefits may take longer to realize than expected.

The success of the acquisition will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining the businesses, including the approximately $110 million in annualized pre-tax cost synergies that we expect to realize within the first four fiscal years after the completion of the acquisition.

The anticipated benefits and cost savings of the acquisition may not be realized fully or at all, may take longer to realize than expected, may require more non-recurring costs and expenditures to realize than expected or could have other adverse effects that we do not currently foresee.

Some of the assumptions that we made such as with respect to anticipated operating synergies or the costs associated with realizing such synergies, significant long-term cash flow generation, and the continuation of our investment grade credit profile, may not be realized.

The integration process may result in the loss of key employees, the disruption of ongoing business or inconsistencies in standards, controls, procedures, and policies.

There could be potential unknown liabilities and unforeseen expenses associated with the mergers that were not discovered while performing due diligence.

Uncertainties associated with the mergers may cause a loss of management personnel and other employees, which could adversely affect the future business and operations of STERIS.

STERIS and Cantel are dependent on the experience and industry knowledge of their officers and other employees to execute their business plans.

Each company’s success until the mergers and our success after the mergers will depend in part upon our ability to retain management personnel and other employees.

Current and prospective employees may experience uncertainty about their roles following the mergers, which may have an adverse effect on our ability to attract or retain management and other personnel.

Accordingly, no assurance can be given that we will be able to attract or retain management, personnel and other employees that we would have previously been able to attract or retain.

The market price of STERIS Shares may decline in the future as a result of the sale of the STERIS Shares held by former Cantel Stockholders or current STERIS Shareholders.

Based on the number of shares of Cantel Common Stock outstanding as of February 28, 2021, we expect to issue ap proximately 14,300,000 STERIS S hares to Cantel Stockholders in the mergers.

Following their receipt of STERIS Shares as stock consideration in the mergers, former Cantel Stockholders may seek to sell STERIS Shares delivered to them.

Other STERIS Shareholders may also seek to sell STERIS Shares held by them.

These sales (or the perception that these sales may occur), coupled with the increase in the outstanding number of STERIS Shares, may affect the market for, and the market price of, STERIS Shares in an adverse manner.

After completion of the mergers, we will record goodwill and other intangible assets that could become impaired and result in material non-cash changes to our results of operation in the future.

The mergers will be accounted for as an acquisition by STERIS in accordance with accounting principles generally accepted in the U.S., which is referred to as GAAP.

Under the acquisition method of accounting, the assets and liabilities of Cantel and its subsidiaries will be recorded, as of completion, at their respective fair values and added to those of STERIS.

Our reported financial condition and results of operations for periods after completion of the mergers will reflect Cantel balances and results after completion of the mergers but will not be restated retroactively to reflect the historical financial position or results of operations of Cantel and its subsidiaries for periods prior to the mergers.

Under the acquisition method of accounting, the total purchase price will be allocated to Cantel’s tangible assets and liabilities and identifiable intangible assets based on their fair values as of the date of completion of the mergers.

There could be potential unknown liabilities and unforeseen expenses associated with the acquisition that were not discovered while performing due diligence.

We have recorded goodwill and other intangible assets that could become impaired and result in material non-cash changes to our results of operation in the future.

The acquisition has been accounted for as an acquisition by STERIS in accordance with accounting principles generally accepted in the U.S., which is referred to as U.S.

Under the acquisition method of accounting, the assets and liabilities of Cantel and its subsidiaries have been recorded at their respective fair values and added to those of STERIS.

Our reported financial condition and results of operations for periods after completion of the acquisition reflect Cantel balances and results after completion of the acquisition but have not been restated retroactively to reflect the historical financial position or results of operations of Cantel and its subsidiaries for periods prior to the acquisition.

Under the acquisition method of accounting, the total purchase price has been allocated to Cantel’s tangible assets and liabilities and identifiable intangible assets based on their fair values as of the date of completion of the acquisition.

The excess of the purchase price over those fair values will be recorded as goodwill.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors