Valitas Health $360 million facility expected as April business

By Sara Rosenberg

New York, March 28 - Valitas Health Services Inc.'s proposed $360 million senior secured credit facility is expected to launch with a bank meeting sometime in April, according to a market source.

Barclays Capital Inc. and Bank of America Merrill Lynch are the lead banks on the deal.

Based on filings with the Securities and Exchange Commission, the facility is expected to consist of a $75 million revolver and a $285 million term loan.

Proceeds will be used to help fund the acquisition of America Service Group Inc. for $26 per share in cash, or about $250 million.

Other funds for the transaction will come from $100 million of mezzanine debt that has been committed by GSO Capital Partners LP.

Closing is expected in the second quarter, subject to the approval of America Service Group's stockholders and other customary conditions, including the satisfaction of governmental and regulatory approval requirements.

The combined company's annual revenues are expected to total $1.4 billion for 2011.

St. Louis-based Valitas and Brentwood, Tenn.-based America Service Group are providers of health care services to the incarcerated population. The corporate headquarters for the combined company will be in Brentwood, Tenn.

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