Hologic launches $1.75 billion term loan B at Libor plus 400 bps

By Sara Rosenberg

New York, July 9 - Hologic Inc. launched its $1.75 billion seven-year term loan B on Monday with price talk of Libor plus 400 basis points with a 1% Libor floor and an original issue discount of 99, according to market sources.

The loan has 101 soft call protection for one year, sources said.

The company's $300 million undrawn five-year revolver and $1 billion five-year term loan A were already launched to investors in May and are being talked at Libor plus 300 bps.

Financial covenants are minimum interest coverage and maximum total net leverage ratios.

Goldman Sachs & Co., J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are the lead banks on the $3.05 billion senior secured credit facility (Ba2/BBB-).

Proceeds will be used to help fund the acquisition of Gen-Probe Inc. for $82.75 per share in cash, or a total enterprise value of about $3.7 billion.

Other funds for the transaction will come from $826 million of cash and marketable securities on hand and $750 million of senior notes.

The notes offering was upsized from an originally anticipated amount of $500 million as the term loan B was downsized from $2 billion.

Closing is expected in early August, subject to approval of Gen-Probe's shareholders, expiration of Hart-Scott-Rodino Antitrust Improvements Act of 1976, which has been obtained, and necessary foreign clearances.

Pro forma net leverage is 5.6 times, and net leverage is 5.1 times. Total secured leverage is 3.1 times.

Hologic is a Bedford, Mass.-based developer, manufacturer and supplier of diagnostics products, medical imaging systems and surgical products for the health care needs of women.

Gen-Probe is a San Diego-based developer, manufacturer and marketer of molecular diagnostic products and services that are used primarily to diagnose human diseases, screen donated human blood and ensure transplant compatibility.

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