Hologic trims term B to $1.5 billion, flexes to Libor plus 350 bps

By Sara Rosenberg

New York, July 18 - Hologic Inc. downsized its seven-year term loan B to $1.5 billion from $1.75 billion and reduced pricing to Libor plus 350 basis points from Libor plus 400 bps, according to market sources.

The 1% Libor floor, original issue discount of 99 and 101 soft call protection for one year were left unchanged.

Recommitments were due at noon ET on Wednesday, sources said.

The company's now $2.8 billion senior secured credit facility (Ba2/BBB-), down from $3.05 billion, also includes a $300 million undrawn five-year revolver and a $1 billion five-year term loan A, both priced 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 deal.

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 $1 billion of senior notes.

The notes were upsized from $750 million as a result of the new term loan B downsizing, sources said.

Earlier, the notes had been increased from an originally anticipated amount of $500 million as the term loan B was downsized from $2 billion to $1.75 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 and necessary foreign clearances.

A special meeting of Gen-Probe's shareholders to vote on the transaction is set for July 31.

Pro forma net leverage is 5.6 times, and net leverage is 5.1 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.

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