Diplomat lifts spread on $545 million term loan to Libor plus 450 bps

By Sara Rosenberg

New York, Dec. 13 – Diplomat Pharmacy Inc. increased pricing on its $545 million seven-year covenant-light term loan to Libor plus 450 basis points from talk in the range of Libor plus 400 bps to 425 bps, according to a market source.

In addition, the original issue discount talk on the loan was changed to a range of 98.5 to 99 from just 99 and the 101 soft call protection was extended to one year from six months, the source said.

The term loan still has a 1% Libor floor.

J.P. Morgan Securities LLC and Capital One are the joint lead arrangers and bookrunners on the deal.

Based on the commitment letter, the company is also expected to get a $250 million five-year revolver as part of its $795 million of senior secured credit facilities (B1/B+).

Proceeds will be used to fund the acquisition of Leehar Distributors LLC and refinance existing bank debt.

Under the agreement, Leehar, doing business as LDI Integrated Pharmacy Services, will be purchased for $515 million cash and about $80 million in Diplomat common stock.

Diplomat is a Flint, Mich.-based provider of specialty pharmacy services. Leehar is a St. Louis-based full-service pharmacy benefit manager.

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