Express Scripts gets financing commitment from Citigroup, Credit Suisse for Caremark bid

By Sara Rosenberg

New York, Dec. 18 - Express Scripts Inc. has received a debt financing commitment from Citigroup and Credit Suisse to back its buyout bid for Caremark Rx Inc., company officials said in a conference call Monday.

The company plans on using $13.4 billion in debt for the transaction, which could come in the form of bank and bond debt, or just bank debt, officials said in the call.

Targeted maturities for the new debt are in the six- to seven-year range, officials added.

Under the proposal, Express Scripts has offered to acquire Caremark for $29.25 in cash and 0.426 shares of Express Scripts stock for each share of Caremark stock. The offer has an approximate value of $26 billion.

This offer represents a 15% premium over the all-stock purchase price to be paid to Caremark stockholders pursuant to its proposed acquisition by CVS Corp.

Upon completion of the transaction, it is anticipated that Caremark stockholders would own about 57% of the combined company and Express Scripts stockholders would own about 43%.

Express Scripts expects that the proposed transaction would be completed in the third quarter of 2007.

The combined company is anticipated to generate substantial free cash flow, which will enable it to consistently and rapidly reduce acquisition-related debt and return to historical leverage levels.

In response to the proposal, Caremark said that its board of directors will review the terms of the proposal in a manner consistent with its obligations under its CVS merger agreement. The company added that it has no further comment on the proposal at this time.

Express Scripts is a Maryland Heights, Mo., provider of pharmacy benefit management services. Caremark is a Nashville pharmaceutical services company.

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