Cal Dive plans $675 million credit facility for Horizon purchase

By Sara Rosenberg

New York, June 12 - Cal Dive International, Inc. is planning on getting a new $675 million senior secured credit facility to help fund its acquisition of Horizon Offshore, Inc., company officials said in a conference call Tuesday.

Bank of America is the lead bank on the deal.

The facility consists of a $375 million term loan and a $300 million revolver.

Pro forma for the transaction, debt to LTM EBITDA will be 1.6 times and LTM EBITDA to interest will be 8.1 times, officials said in the call.

Cal Dive believes that after the acquisition is completed, its strong cash flow from operations will allow it to reduce its net debt, fully fund its current capital program and pursue future growth initiatives.

Under the terms of the agreement, Horizon stockholders will receive a combination of 0.625 shares of Cal Dive common stock and $9.25 in cash for each share of Horizon common stock outstanding, or an estimated total of 20.4 million Cal Dive shares and $302.5 million in cash.

Upon completion of the transaction, it is anticipated that Horizon stockholders will own about 20% of the common stock of Cal Dive.

Closing of the transaction is expected to occur late in the third quarter, subject to regulatory approvals and other customary conditions, as well as Horizon stockholder approval.

The agreement includes a "go shop" provision that allows Horizon until July 27 to actively solicit alternative acquisition proposals from third parties.

Cal Dive is a Houston-based marine contractor that provides manned diving, pipelay and pipe burial services to the offshore oil and natural gas industry. Horizon Offshore is a Houston-based provider of marine construction services for the offshore oil and gas and energy industries.

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