American Addiction moves up timing on $65 million incremental loan; commitments due Friday

By Paul A. Harris

Portland, Ore., Sept. 20 – American Addiction Centers (AAC Holdings Inc.) moved up timing on its fungible $65 million incremental first-lien term loan due June 30, 2023 (B3/B-), according to a market source.

New timing has commitments due at noon ET on Friday, moved up from a previous commitment of Sept. 26.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and BMO Capital Markets are the leads on the deal.

Pricing on the deal remains Libor plus 675 basis points with a 1% Libor floor, in line with existing term loan pricing, and the new debt is talked with an original issue discount of 98.5, the source said.

The incremental term loan has a ticking fee of half the spread from days 31 to 60 and the full spread thereafter.

Call protection on the incremental loan matches existing term loan call protection of non-callable until June 2018, then at 102 for a year and 101 for a year.

Proceeds will be used to help fund the acquisition of AdCare Inc. for $85 million.

Other funds for the transaction will come from cash on hand, seller financing and $5 million of restricted shares of American Addiction common stock.

Closing is expected in the first half of 2018, subject to regulatory review and customary conditions.

American Addiction Centers is a Brentwood, Tenn.-based provider of inpatient and outpatient substance abuse treatment services. AdCare is a provider of addiction treatment in New England.

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