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ReAble details $1.155 billion credit facility, $575 million bonds for DJO purchase
By Sara Rosenberg
New York, July 20 - ReAble Therapeutics Inc. released details on the financing for its acquisition of DJO Inc., including plans for an up to $1.155 billion senior secured credit facility and the sale of up to $575 million of senior unsecured notes, according to an 8-K filed with the Securities and Exchange Commission Friday.
Credit Suisse and Bank of America are the lead banks on the financing.
The credit facility consists of an up to $1.055 billion 61/2-year term loan B and a $100 million six-year revolver, with both tranches expected at Libor plus 250 basis points.
The revolver has a 50 bps commitment fee.
The term loan B will have no financial covenants and the revolver will have a maximum senior secured leverage ratio only if amounts are drawn.
As for the bonds, the offering may include up to $200 million in aggregate principal amount of senior unsecured PIK notes.
The bonds are backed by a commitment for a $575 million senior unsecured increasing-rate bridge loan.
Other acquisition financing will come from $408.4 million of equity from The Blackstone Group, which is the controlling shareholder of ReAble.
ReAble's existing 11¾% senior subordinated notes due 2014 will remain outstanding following the transaction.
Under the agreement, DJO stockholders will receive $50.25 per share in cash. The transaction is valued at $1.6 billion, including the assumption of debt.
The transaction is expected to close in the fourth quarter, subject to DJO stockholder approval and regulatory approvals. There is no financing condition.
ReAble is an Austin, Texas, medical device company focused on rehabilitation, pain management, physical therapy and orthopedics. DJO is a Vista, Calif., provider of products and services that promote musculoskeletal and vascular health.
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