Allscripts launches $150 million revolver, $320 term loan A at Libor plus 325 basis points

By Sara Rosenberg

New York, July 8 - Allscripts launched its $150 million five-year revolver and $320 million term loan A on Thursday with price talk of Libor plus 325 basis points, according to sources.

Pricing on the tranches can range from Libor plus 250 bps to 350 bps based on leverage, with the lowest point on the grid being 0.5 times leverage and the highest point being 2.5 times.

The revolver has a 50 bps unused fee.

The company's $720 million credit facility (Ba2/BBB-) also includes a $250 million term loan B that will be launched at a later date.

Originally the deal was outlined as containing one term loan sized at $570 million, but the loan was later divided into an A and a B tranche.

Tranche sizes can be moved around based on demand, one source added.

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

Financial covenants include a minimum interest coverage ratio of 3.5 to 1.0, with step-ups to be agreed upon, and a maximum leverage ratio of 4.0 to 1.0, with step-downs to be agreed upon.

There is a $250 million accordion feature.

Proceeds will be used to fund the buyback of shares from Misys plc.

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.

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.

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.

Pro forma leverage is 2.1 times LTM EBITDA.

Subject to certain 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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