Axcan Holdings launches $225 million term loan at Libor plus 475 bps

By Sara Rosenberg

New York, Jan. 27 - Axcan Holdings Inc. launched its $225 million six-year term loan on Thursday morning with price talk of Libor plus 475 basis points with a 1.5% Libor floor and an original issue discount of 991/2, according to a market source.

As was previously expected, there is 101 soft call protection for one year.

Amortization on the term loan is 1% per year, with the balance due at maturity.

The company's $340 million senior secured credit facility (B1) also includes a $115 million amended and restated revolver.

Based on recent filings with the Securities and Exchange Commission, initial pricing on extended revolver commitments due in 2016 is expected to be Libor plus 450 bps with a 75 bps unused fee, while pricing on the non-extended revolver due Feb. 25, 2014 will be Libor plus 350 bps with a 50 bps unused fee.

The revolver will have total leverage and interest coverage covenants.

Bank of America, RBC Capital Markets, HSBC Securities and Barclays Capital are the joint lead arrangers and bookrunners on the deal.

Proceeds from the term loan, along with $225 million of secured notes, $145 million of equity and cash on hand, will be used to fund the acquisition of Eurand NV for $12 per share, or $586.5 million in total on a fully-diluted basis, to repay Eurand's debt and to repay Axcan's outstanding term loan.

Axcan is currently tendering for Eurand's shares and that offer will expire on Feb. 3. The acquisition is subject to a minimum tender of 80% of Eurand shares and receipt of antitrust approval, which has already been obtained.

The amended and restated revolver will be used to replace the company's existing revolver. It is expected to be undrawn at close other than for amounts required to finance any original issue discounts and fees and expenses related to the transactions.

Axcan is a Mont-Saint-Hilaire, Quebec-based pharmaceutical company focused on the treatment of gastrointestinal disorders. Eurand is an Amsterdam-based specialty pharmaceutical company.

© 2015 Prospect News.
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