Diplomat Pharmacy firms $400 million term loan B OID at 99

By Sara Rosenberg

New York, Dec. 14 – Diplomat Pharmacy Inc. finalized the original issue discount on its $400 million covenant-light term loan B at 99, the tight end of revised talk in the range of 98.5 to 99 but in line with initial talk of 99, according to a market source.

Pricing on the term loan is Libor plus 450 basis points with a 1% Libor floor, and the debt has 101 soft call protection for one year.

Earlier in syndication, the term loan B was downsized from $545 million as a $150 million term loan A was added to the transaction, pricing was increased from talk in the range of Libor plus 400 bps to 425 bps and the call protection was extended from six months.

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

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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