AMN Healthcare to get $280 million credit facility for MHA purchase

By Sara Rosenberg

New York, Oct. 6 - AMN Healthcare Services Inc. plans on getting a new $280 million senior secured credit facility (BB-) to help fund its purchase of The MHA Group Inc., company officials said in a conference call Thursday.

The facility consists of a $205 million six-year term loan and a $75 million five-year revolver that will be used for working capital and general corporate purposes.

Interest rates on the new facility are expected to be lower than current pricing on the company's existing credit facility, which will be refinanced through this new deal, officials said in the call. On average, the company expects new interest rates to be around the 5% level.

At close, the leverage ratio will be 3.2x, compared to around 2.2x at June, but, based on operating cash flow, AMN expects the debt balances to be repaid quickly, officials added in the call.

Under the acquisition agreement, AMN has agreed to pay a purchase price of $160 million plus an earn-out provision expected to result in approximately $38 million of additional consideration based on 2005 performance, with a guaranteed minimum earn-out of $35 million. The total consideration will be paid approximately 75% in cash and 25% in AMN stock.

AMN is a San Diego-based health care staffing company. MHA is an Irving, Texas, provider of both temporary and permanent staffing for clinicians ranging from physicians to allied health professionals.

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