US Oncology firms up loan structure ahead of Wednesday's bank meeting

By Sara Rosenberg

New York, May 14 - US Oncology Inc. scheduled a bank meeting for Wednesday and firmed up the structure of what is now a $500 million senior secured credit facility, according to an informed source. JPMorgan Chase Bank, Wachovia Bank and Citicorp North America Inc. are the lead banks on the deal.

The facility consists of a $100 million revolver and a $400 million term loan B, the source said, adding that there is no price talk available at this time.

Previously, it was anticipated that the deal would be sized at $550 million with a $100 million revolver and a $450 million term loan, but that was much earlier in the process when the structure was still fluid, the source explained.

Proceeds will be used to help fund the acquisition of US Oncology by Oiler Acquisition Corp., an affiliate of Welsh, Carson, Anderson & Stowe IX LP.

The company will issue high-yield bonds as well to fund this transaction. It was previously reported in an 8-K filed with the Securities and Exchange Commission that the bond deal would be sized around $625 million, however, the source would not confirm the size of the bond deal saying that it was not being revealed at this time.

Under the merger agreement, the holders of US Oncology common stock, other than Welsh Carson who already owns about 14.5% of the common stock, will receive $15.05 per share in cash for their shares, which represents an 18.5% premium above the March 19 closing price of $12.70. The transaction is valued at about $1.7 billion, including consideration for outstanding stock options and the assumption of debt.

Closing of the deal, which is expected to take place in the second quarter of 2004, is subject to various conditions including majority approval from US Oncology's shareholders excluding Welsh Carson and members of senior management participating in the transaction, closing of the financing transactions, closing of a tender offer for US Oncology's public debt securities, the expiration of the applicable waiting period under the Hart-Scott-Rodino Act and other customary conditions.

US Oncology is a Houston cancer-care services company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.