Angiotech Pharmaceuticals to start roadshow for $250 million eight-year notes Tuesday

By Paul Deckelman

New York, March 3 - Angiotech Pharmaceuticals announced plans Friday to sell $250 million of eight-year senior subordinated notes, and will use the net proceeds of the deal to help pay for its pending acquisition of American Medical Instrument Holdings Inc.

High yield syndicate sources said the deal will be brought to market via joint bookrunners Credit Suisse and Merrill Lynch & Co.

It will be sold to potential investors via a roadshow that will get under way on Tuesday.

The new bonds will be non-callable for the first four years. They have been assigned a B2 rating by Moody's Investors Service and a B rating by Standard & Poor's.

The issue is being guaranteed on a senior subordinated basis by certain of Angiotech's direct and indirect subsidiaries. The bonds are being sold in the United States under Rule 144A and to non-U.S. buyers under Regulation S, and will also be offered and sold in certain provinces of Canada on a private placement basis.

Angiotech, a Vancouver, B.C.-based specialty pharmaceuticals producer, is selling the bonds as part of the financing for its coming acquisition of American Medical Instruments Holdings Inc., which was announced on Feb. 1 and which is expected to be completed later this month.

It is also entering into a new $375 million credit facility, which will consist of $300 million of senior secured term loan B bank debt due 2013, and a $75 million senior secured revolving credit facility, due 2011.

The company will use the proceeds from the credit facility and the notes, as well as about $260 million of available cash on hand to buy American Medical Instrument, a Lake Forest, Ill.-based independent manufacturer of specialty single-use medical devices. The total transaction value of $810 million includes the assumption of approximately $109 million in outstanding American Medical Instrument debt and the payment of transaction costs and other expenses.

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