Allscripts plans new $720 million credit facility to fund purchase of shares from Misys

By Sara Rosenberg

New York, June 9 - Allscripts has received a commitment for a new $720 million credit facility to fund the buyback of shares from Misys plc, according to a 425 filed with the Securities and Exchange Commission on Wednesday.

JPMorgan, Barclays Capital and UBS are the lead banks on the deal.

The facility consists of a $150 million undrawn five-year revolver expected to be priced at Libor plus 300 basis points and a $570 million term loan expected to be priced at Libor plus 350 bps, the filing said.

Pro forma leverage is 2.1 times LTM EBITDA.

Misys is selling the majority of its 54.6% interest in its Allscripts subsidiary in a transaction that is expected to raise roughly $1.3 billion. The amount of shares being sold is about 68 million, and Misys will retain about 12 million shares.

Specifically, there will be a market placing of between 36 million and 40 million Allscripts shares held by Misys, with the actual price and offering size to be determined at the time of the placing.

And, Allscripts will buy back 24.4 million of shares from Misys for an aggregate consideration of $577 million, a price of $23.62 per share.

Allscripts will then merge with Eclipsys, an Atlanta-based provider of health care IT services, and following this merger, Misys will have an option to sell to Allscripts an additional 5.3 million of shares for $102 million.

The new credit facility will fund the initial buyback of shares, and any additional buyback will be funded with cash on hand.

Following the sale of shares, Misys will use £75 million to pay down debt, with the rest being returned to shareholders, company officials said in a conference call.

Misys capital structure will then include £210 million of committed credit facilities, and net debt to EBITDA will be 0.7 times.

The proposed sale is conditional upon being able to achieve through the placing a minimum price of $16.50 per share as well as upon approval by Misys shareholders. It is not conditioned on the Allscripts-Eclipsys merger.

However, the Allscripts-Eclipsys merger is subject to the Misys transaction, as well as Allscripts and Eclipsys shareholder approval and other customary conditions.

In the Eclipsys merger, Allscripts will give Eclipsys shareholders 1.2 shares of its stock per Eclipsys share.

Subject to the conditions being met, the buyback of shares and the merger with Eclipsys are expected to be completed in September or October.

Allscripts is a Chicago-based provider of software, services, information and connectivity services to physicians and other health care providers. Misys is a London-based provider of services to the financial services and health care industries.

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