Netsmart closes $612 million loans to help fund merger with Allscripts

By Marisa Wong

Morgantown, W.Va., April 25 – Netsmart Technologies, Inc. entered into a first-lien credit agreement and a second-lien term loan agreement on April 19 in connection with its merger with Allscripts Healthcare Solutions, Inc. Allscripts had formed a joint venture with GI Netsmart Holdings LLC to acquire Netsmart Technologies.

Proceeds from the credit agreements were used to finance a portion of the merger, according to an 8-K filing with the Securities and Exchange Commission.

The first-lien credit facility consists of a $395 million seven-year senior secured term loan and a $50 million five-year senior secured revolver. The second-lien facility is a $167 million 7˝-year senior secured term loan.

The first-lien revolver will terminate on April 19, 2021; the initial term loans under the first-lien credit agreement mature on April 19, 2023; and the second-lien term loans mature on Oct. 19, 2023.

The first-lien loans will bear interest at adjusted Libor plus 475 basis points, subject to a step-down to 425 bps for the revolving loans, depending on the company’s leverage ratio. The second-lien loans will bear interest at adjusted Libor plus 950 bps.

The credit agreements contain a financial covenant requiring the borrower to maintain a maximum ratio of total debt to consolidated adjusted EBITDA.

UBS Securities LLC, Deutsche Bank Securities Inc. and Golub Capital LLC are the joint lead arrangers and joint bookrunners for the first-lien facility with UBS AG, Stamford Branch as administrative agent, ING Capital LLC as syndication agent and Deutsche Bank Securities and Golub Capital as co-documentation agents. UBS Securities and Deutsche Bank Securities are the joint lead arrangers and joint bookrunners for the second-lien facility with UBS as administrative agent.

Allscripts is a Chicago-based provider of software, connectivity and information services for physicians.

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