LabCorp gets new $850 million term loan at Libor plus 80 bps

By Wendy Van Sickle

Columbus, Ohio, June 3 – Laboratory Corp. of America Holdings entered into a credit agreement providing for a two-year $850 million term loan, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings bear interest at Libor plus 80 basis points initially, and the margin above Libor can range from 55 bps to 117.5 bps, depending on the borrower’s credit ratings.

Bank of America, NA and Wells Fargo Securities, LLC are the joint lead arrangers and joint book managers.

Bank of America is administrative agent, and Wells Fargo Bank, NA is the syndication agent.

The entire amount of the term loan was advanced at closing on Monday, with about $250 million of the proceeds being applied to repay a portion of the existing loans outstanding under LabCorp’s prior term loan entered into on Sept. 15, 2017. Remaining proceeds will be used for general corporate purposes, including in connection with the previously announced acquisition of the nonclinical research services business of Envigo International Holdings, Inc.

LabCorp is required to maintain a leverage ratio of no greater than 4x, which can rise to 4.5x at LabCorp’s option during the quarter of a qualified acquisition and the three subsequent quarters.

Burlington, N.C.-based LabCorp develops diagnostic technologies through genomic testing.

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