Hologic floats expected pricing on proposed $800 million credit facility

By Sara Rosenberg

New York, June 11 - Hologic Inc. revealed expected pricing on its proposed $800 million four-year senior secured credit facility that will be used to help fund the acquisition of Third Wave Technologies Inc., according to recent filings with the Securities and Exchange Commission.

The actual commitment letter outlined initial pricing on both the $600 million term loan A and the $200 million revolver at Libor plus 275 basis points, with the ability to range from Libor plus 200 bps to 300 bps depending on leverage.

The company, however, said in a different filing that "the new credit facility will reflect current prevailing rates which we estimate will come at a cost of Libor plus 2.5% to 2.75% with a potential for some modest upfront fee equal to 50 to 100 basis points."

Hologic went on to say in the filing that it believes its "legacy bank group will continue to be supportive of the company, but are provided certainty by a firm financing commitment from Goldman Sachs extending into the fall."

Goldman Sachs is the lead arranger, bookrunner, syndication agent and administrative agent on the deal.

Hologic is acquiring Third Wave for $11.25 per share, or about $580 million.

A tender offer for the share purchase is expected to begin within two weeks, with completion taking place about a month later.

Depending on whether the company needs to extend the tender offer period and on the timing of HSR review, it may be able to close the acquisition in the early-to mid-August time frame.

When the deal closes the company's only noteworthy debt, other than a small line of credit in Europe, will be the new term loan A and the convertible note it currently has on its books.

This company anticipates that the new term loan A will be paid off within 2.5-years.

Currently, the company has $90 million of term loans remaining from the Oct. 22 merger with Cytyc, but these loans are expected to be fully repaid by the end of this month.

Hologic is a Bedford, Mass.-based developer, manufacturer and supplier of diagnostics, medical imaging systems and surgical products dedicated to serving the health care needs of women. Third Wave is a Madison, Wis.-based provider of DNA and RNA analysis products to clinical, research and agricultural customers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.