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DSM Pharma/Patheon says new facility expected at Libor plus 425 bps
By Sara Rosenberg
New York, Dec. 5 - The new company (Newco) being formed through the combination of DSM Pharmaceutical Products with Patheon Inc. said in a PREM14A filed with the Securities and Exchange Commission on Thursday that it expects its $1.35 billion credit facility to be priced at Libor plus 425 basis points with a 1% Libor floor.
The facility consists of a $200 million five-year revolver and a $1.15 billion seven-year term loan B.
Official spread talk on the deal, which is expected to launch with a bank meeting during the first week of January, is not yet out.
However, it has been disclosed by sources that the term loan B will have a 1% Libor floor, 101 soft call protection and amortization of 1% per annum.
UBS Securities LLC, J.P. Morgan Securities LLC, Jefferies Finance LLC, KeyBanc Capital Markets and Morgan Stanley Senior Funding Inc. are the joint bookrunners on the deal.
Other funds for the creation of the new company will come from $772 million of equity.
Under the agreement, JLL Partners and Royal DSM will acquire Patheon for $9.32 per share, implying an equity value of about $1.4 billion and a total enterprise value of $1.95 billion.
Patheon will then be merged with DSM Pharmaceutical Products, and the combined company will be 51% owned by JLL and 49% by DSM.
DSM will receive a seller note of $200 million, thereby valuing DSM Pharmaceutical Products at $670 million.
Closing is expected in the first half of 2014, subject to customary conditions.
Newco will be a contract development and manufacturing organization for the pharmaceutical industry with anticipated sales of around $2 billion.
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