M*Modal lifts term loan to $445 million, flexes to Libor plus 550 bps

By Sara Rosenberg

New York, Aug. 14 - M*Modal Inc. upsized its seven-year term loan to $445 million from $440 million and increased pricing to Libor plus 550 basis points from talk of Libor plus 500 bps to 525 bps, according to a market source.

In addition, the original issue discount widened to 98½ from 99, the source said.

The term loan still has a 1.25% Libor floor and 101 soft call protection for one year.

The company's now $520 million senior secured credit facility (Ba3/BB-), up from $515 million, also includes a $75 million five-year revolver.

Covenants include a maximum total net leverage ratio.

Bank of America Merrill Lynch and RBC Capital Markets LLC are the joint lead arrangers and bookrunners on the deal. SunTrust Robinson Humphrey Inc. is also a bookrunner.

Proceeds will be used to help fund the buyout of the company by One Equity Partners for $14 per share in an all-cash transaction valued at about $1.1 billion and to refinance existing debt.

Other funds for the transaction will come from $447 million of equity and the sale of $250 million 10¾% senior unsecured notes that priced on Tuesday at 98.694 to yield 11%.

The extra funds raised through the term loan upsizing will cover the wider original issue discount price, the source added.

Closing is expected this quarter, subject to a majority of shares being tendered or shareholder approval.

M*Modal is a Franklin, Tenn.-based provider of clinical documentation services and speech understanding services.

© 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.