Press Ganey $220 million credit facility talked at Libor plus 400 bps

By Sara Rosenberg

New York, Feb. 15 - Press Ganey Associates, Inc. is talking both tranches under its $220 million credit facility at Libor plus 400 basis points, according to a market source.

Tranching on the deal is comprised of a $20 million revolving credit facility and a $200 million first-lien term loan.

The term loan is being offered to investors at an original issue discount of 98, the source said.

The revolver has a 50 bps unused fee.

The facility, which launched with a bank meeting on Thursday, is mostly being marketed toward banks, the source added.

Lehman Brothers and GE Capital are the lead banks on the deal, with Lehman the left lead.

Proceeds will be used to help fund Vestar Capital Partners' acquisition of a majority interest in the company from American Securities Capital Partners, LLC.

Other financing will come from $100 million of mezzanine debt priced at 12½% being led by Lehman and ICG.

Also, Vestar and management are contributing more than 50% in equity.

First-lien leverage is around 3.8 times, and leverage through the mezzanine is around 5.75 times.

Press Ganey is a South Bend, Ind.-based provider of quality improvement solutions to hospitals and health care facilities.

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