Alere to use $575 million from Optum transaction to repay bank debt

By Jennifer Chiou

New York, Jan. 9 – Alere Inc. announced that it will use the $575 million cash proceeds from the $600 million sale of subsidiary Alere Health, LLC and Alere Health’s subsidiaries to OptumHealth Care Solutions, Inc. to pay down outstanding bank debt.

About $127 million of the proceeds will be used to repay outstanding revolving credit loans. This amount can be subsequently reborrowed.

The remaining cash will be used to repay on a pro rata basis outstanding term A loans, including delayed draw loans, and outstanding term B loans.

If any additional cash proceeds are received they will be used to repay term A and term B loans, according to an 8-K filing with the Securities and Exchange Commission.

In December, the company entered into a sixth amendment to its secured credit agreement with General Electric Capital Corp. as collateral agent and administrative agent to, among other things, permit the sale to Optum.

As reported, the company is obligated to use net cash proceeds from the sale to repay borrowings under the credit agreement.

Alere is a Waltham, Mass.-based provider of near-patient diagnosis, monitoring and health management.

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