SXC gets $50 million facility to fund part of HealthTrans acquisition

By Aleesia Forni

Columbus, Ohio, Nov. 21 - SXC Health Solutions Corp. expects to fund the acquisition of HealthTrans LLC from its existing cash balance, as well as its new $50 million unsecured line of credit from J.P. Morgan Chase Bank and new five-year senior unsecured revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The company entered into these new facilities on Wednesday, and proceeds may also be used for other general corporate purposes and payment of fees and expenses related to the acquisition.

The line of credit will be replaced by the revolver on its date of effectiveness.

Interest on the line of credit will be Libor plus 137.5 basis points, and SXC is also required to pay an unused commitment fee of 20 bps.

SXC will purchase HealthTrans for $250 million in cash, and the transaction is expected to close during the first quarter of 2012.

"The acquisition of HealthTrans is a great fit with our strategy to acquire mid-market [pharmacy benefit management] customers that already utilize our [healthcare information technology] services," chief executive officer of SXC Mark Thierer said in a press release to announce the acquisition.

"HealthTrans is one of the largest, privately held PBMs in the country. It has a diverse customer base and a track record of strong cash flow. The acquisition not only adds to our scale, but also provides us the opportunity to bring our full suite of PBM services to their clients. HealthTrans' existing HCIT customers expand our pool of potential HCIT-to-PBM conversions."

"SXC brings new products and services to cross-sell to our customer base along with the financial resources to help further strengthen our competitive position," chef executive officer of HealthTrans Jack McClurg said in the release.

"The transaction also provides our staff with an opportunity to join a dynamic company with a proven track record for growth. We look forward to becoming part of the SXC family."

The acquisition is subject to conditions, including the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and governmental and third-party consents.

SXC is a provider of pharmacy benefits management services and health care information technology solutions based in Lisle, Ill.

HealthTrans is a Greenwood Village, Colo.-based a healthcare management solutions company.

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