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Parexel launches $2.07 billion term loan B at Libor plus 300-325 bps
By Sara Rosenberg
New York, Aug. 8 – Parexel International Corp. launched on Tuesday its $2,065,000,000 seven-year covenant-light term loan B with price talk of Libor plus 300 basis points to 325 bps with a 0% Libor floor and an original issue discount of 99.5, according to a market source.
The term loan has 101 soft call protection for six months, the source said.
The company’s $2,365,000,000 of senior secured credit facilities (B) also include a $300 million five-year revolver.
Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Barclays, Morgan Stanley Senior Funding Inc. HSBC Securities (USA) Inc. and Jefferies LLC are the lead banks on the debt.
Commitments are due at noon ET on Friday, the source added.
Proceeds will be used to help fund the buyout of the company by Pamplona Capital Management LLP and refinance existing debt. Parexel is being bought for $88.10 per share in cash in a transaction valued at about $5 billion, including net debt.
Other funds for the transaction will come from $720 million in eight-year senior unsecured notes and $2.7 billion of equity.
Backing the notes is a commitment for a $720 million one-year senior unsecured bridge loan priced at Libor plus 600 basis points with a 1% Libor floor. The spread will increase by 50 bps every three months until it hits a specified cap.
Pro forma for the transaction senior secured leverage will be 5 times and total leverage will be 6.75 times based on March 31 LTM pro forma adjusted EBITDA of $413 million. Net senior secured leverage is 4.3 times and net total leverage is 6.1 times based on a closing cash balance of $284 million.
Closing is expected in late September, subject to shareholder approval and other customary conditions. The transaction is not subject to a financing condition.
Parexel is a Waltham, Mass.-based biopharmaceutical services company.
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