Angiotech sets Thursday launch for $375 million credit facility

By Sara Rosenberg

New York, Feb. 28 - Angiotech Pharmaceuticals Inc. has scheduled a bank meeting for Thursday to launch its proposed $375 million credit facility, according to a market source.

Credit Suisse and Merrill Lynch are the lead banks on the deal, with Credit Suisse on the left.

The facility consists of a $300 million term loan and a $75 million revolver, with pricing still to be determined based on ratings, the source said.

The deal is expected to be rated in the weak-BBs, the source added.

Proceeds from the credit facility will be used to help fund the purchase of American Medical Instruments Holdings Inc.

Under the acquisition agreement, Angiotech has agreed to purchase American Medical for about $785 million in cash, split into about $676 million to American Medical shareholders and $109 million to refinance existing American Medical debt.

When the acquisition was first announced, Angiotech had said that it also intends to issue about $300 million of subordinated notes in connection with the acquisition, although as a back-up for the bonds, the company received a commitment for $600 million in term loans.

In addition to the about $600 million of debt, the company also plans to use about $200 million of cash on hand for acquisition financing.

Following the acquisition, total debt to EBITDA will be 3.6 times, EBITDA to interest will be 4.0 times, debt to equity will be 130%, debt to total capitalization will be 56% and net debt to total capitalization will be 41%.

Debt to EBITDA is anticipated to drop to 3.2 times in 2006, 2.3 times in 2007 and 1.4 times in 2008, with the company hoping to have the senior term loan paid off in full by 2008, only leaving the $300 million of subordinated bonds outstanding.

The transaction is expected to close early in the second quarter, subject to customary closing conditions.

Angiotech Pharmaceuticals is a Vancouver-based specialty pharmaceutical company. American Medical Instruments is a Lake Forest, Ill.-based manufacturer of a variety of single-use medical device products for specialty areas.

© 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.