Fresenius Kabi $2.2 billion credit facility also includes $300 million revolver

By Sara Rosenberg

New York, Aug. 1 - Fresenius Kabi's proposed $2.2 billion senior credit facility includes a $300 million revolver to be made available to a financing subsidiary of Fresenius, according to an S-4 filed with the Securities and Exchange Commission Friday.

This revolver can be increased to $500 million, the filing said.

As was previously reported, the deal also includes a $150 million five-year revolver to be made available to APP Pharmaceuticals Inc., a $900 million five-year term loan A and an $850 million six-year term loan B.

The company estimates that the term loan A will be priced around Libor plus 287.5 basis points and that the term loan B will be priced around Libor plus 350 bps.

Deutsche Bank, Credit Suisse and JPMorgan are the lead banks on the deal, with Deutsche Bank the global coordinator.

Financial covenants include a consolidated leverage ratio, a consolidated fixed-charge coverage ratio, an interest expense coverage ratio and limits amounts spent on capital expenditure.

Proceeds from the credit facility will be used to help fund the acquisition of APP Pharmaceuticals, refinance APP's existing senior credit facility, and for general corporate and working capital purposes.

The company has also received a commitment for a $1.65 billion bridge loan that could be replaced by high-yield financing opportunities.

Under the agreement, Fresenius Kabi will purchase APP for $23 per share and a registered and tradeable contingent value right that could deliver up to $6 per share, payable in 2011, if APP exceeds a cumulative adjusted EBITDA target for 2008 to 2010.

Based on the cash purchase price, the transaction values the fully diluted equity capital of APP at about $3.7 billion, and with the contingent value right, if fully realized, at a value of $4.6 billion.

Fresenius will also assume all of APP's outstanding debt, which totals about $940 million, net of cash; so, in total the consideration for the acquisition could be up to $5.6 billion.

Through the acquisition of APP, Fresenius Kabi will enter the U.S. pharmaceuticals market.

The transaction is expected to close at the end of 2008 or beginning of 2009, subject to certain conditions, including regulatory approvals, and approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Fresenius Kabi is a Bad Homburg, Germany, infusion therapy and clinical nutrition company. APP is a Schaumburg, Ill., hospital-based injectable pharmaceutical company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.