Allscripts $250 million term loan B may launch during July 26 week

By Sara Rosenberg

New York, July 14 - Allscripts' proposed $250 million term loan B is expected to launch sometime around July 29, according to a market source.

Price talk on the term loan B is not yet available.

The company's $150 million five-year revolving credit facility and $320 million term loan A were already launched to banks on July 8. The plan is to close the books on these tranches and then bring the term loan B to market.

The revolver and term loan A are being talked at Libor plus 325 basis points. 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.

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. Sizes can still be moved around based on demand.

JPMorgan, Barclays Capital and UBS are the lead banks on the $720 million credit facility (Ba2/BBB-).

The credit facility includes 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.

Proceeds from Allscripts' credit facility will be used to fund the buyback of shares from Misys plc.

There will be a market placing of between 36 million and 40 million Allscripts shares held by Misys, and Allscripts will buy back 24.4 million of shares from Misys for a total 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 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 last-12-months 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.

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