Elanco ups term B to $3.7 billion, cancels other secured debt plans

By Sara Rosenberg

New York, Jan. 31 – Elanco Animal Health Inc. upsized its seven-year term loan B to $3.7 billion from $2.425 billion and terminated plans for $1.275 billion of other secured debt, according to a market source.

Talk on the term loan B remained at Libor plus 200 basis points with a 0% Libor floor, an original issue discount of 99.5 to 99.75 and 101 soft call protection for six months.

The company’s now $5.025 billion of credit facilities (Baa3/BB+/BBB-), up from $3.75 billion, also include a $750 million revolver and a $575 million term loan A.

Goldman Sachs Bank USA, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the leads on the deal.

Commitments are due at noon ET on Tuesday, accelerated from Thursday, the source added.

Proceeds will be used to help fund the acquisition of Bayer AG’s animal health business for $5.32 billion in cash, subject to customary purchase price adjustments, and $2.28 billion or about 68 million Elanco Animal Health common shares. This represents a 70% to 30% cash-to-equity mix.

Closing is targeted for mid-year, subject to regulatory approval and other customary conditions.

Elanco is a Greenfield, Ind.-based animal health company that develops products and knowledge services to prevent and treat disease in food animals and pets.

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