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Hill-Rom launches $725 million term loan B at Libor plus 275-300 bps
By Sara Rosenberg
New York, July 21 – Hill-Rom Holdings Inc. launched on Tuesday its $725 million seven-year term loan B with price talk of Libor plus 275 basis points to 300 bps with a 0.75% Libor floor and an original issue discount of 99.5, according to a market source.
The term loan has 101 soft call protection for six months, the source said.
The company’s $2,225,000,000 senior secured credit facility (Ba1) also includes a $500 million revolver and a $1 billion term loan A.
Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Citizens Bank and PNC Capital Markets LLC are the lead banks on the financing.
Commitments are due at noon ET on July 30, the source added.
Proceeds will be used to help fund the acquisition of Welch Allyn Inc. for about $1,625,000,000 in cash and around 8.1 million newly issued shares of Hill-Rom common stock. The total transaction value is $2.05 billion.
The company also received a commitment for a $500 million senior unsecured bridge loan to fund the acquisition.
Closing is expected before the end of September, subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.
Hill-Rom expects the combined company to have $2.6 billion in revenue and generate more than $500 million in adjusted EBITDA.
Leverage will be 4.5 times; however, the company expects to delever to below 3.5 times adjusted EBITDA by the end of fiscal 2017 due to anticipated strong cash flow generation.
Hill-Rom is a Chicago-based medical technology company. Welch Allyn is a Skaneateles Falls, N.Y.-based manufacturer of medical diagnostic equipment.
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