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Tivity Health sets talk on $1.18 billion of term loans with launch
By Sara Rosenberg
New York, Feb. 20 – Tivity Health Inc. released price talk on its $400 million five-year first-lien term loan A and $780 million seven-year first-lien term loan B with its bank meeting on Wednesday, according to a market source.
Talk on the term loan A is Libor plus 425 basis points with a 0% Libor floor and an original issue discount of 99 to 99.5, and talk on the term loan B is Libor plus 500 bps to 525 bps with a 0% Libor floor and a discount of 98 to 99, the source said.
Both term loans have 101 soft call protection for six months and a maximum total net leverage covenant with step-downs.
Amortization on the term loan A is 10% per annum and amortization on the term loan B is 2.5% per annum.
The company’s $1,305,000,000 of credit facilities (B1/B+) also include a $125 million revolver.
Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc., Citigroup Global Markets Inc., Citizens Bank, Fifth Third, Goldman Sachs Bank USA and Regions Capital are the lead arrangers on the deal.
Commitments are due at 5 p.m. ET on March 5.
Proceeds will be used with cash on hand to fund the acquisition of Nutrisystem Inc. for $38.75 per share in cash and 0.2141 of a Tivity Health share for each share of Nutrisystem common stock. The transaction values Nutrisystem at an enterprise value of $1.3 billion and an equity value of $1.4 billion.
Based on the financial results for both companies for the 12 months ended Sept. 30, 2018, pro forma revenue would have been about $1.3 billion, net income would have been around $135 million and adjusted EBITDA would have been about $223 million.
Closing is expected this quarter, subject to the approval of Nutrisystem shareholders, the receipt of regulatory approval and other customary conditions.
Tivity is a Franklin, Tenn.-based provider of fitness and health improvement programs. Nutrisystem is a Fort Washington, Pa.-based provider of weight management products and services.
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