Kinetic launches $2.8 billion facility to senior managing agents

By Sara Rosenberg

New York, Aug. 10 - Kinetic Concepts Inc. launched its $2.8 billion senior secured credit facility to senior managing agents on Wednesday, with the retail launch still expected as post-Labor Day business, according to a market source.

Bank of America Merrill Lynch, Morgan Stanley & Co. Inc. and Credit Suisse Securities (USA) LLC are the lead arrangers on the deal.

The facility consists of a $2.6 billion term loan and a $200 million revolver.

Proceeds will be used to help fund the buyout of the company by Apax Partners, Canada Pension Plan Investment Board and the Public Sector Pension Investment Board for $68.50 per share in cash in a transaction valued at $6.3 billion, including outstanding debt.

Other funds for the acquisition are expected to come from bonds and about $1.75 billion of equity.

The company has received a commitment for a $900 million senior unsecured bridge loan and a $1.25 billion senior secured second-lien bridge loan, with a portion of the second-lien bridge loan possibly available in euros.

Syndication of the bridge loans is expected to launch after Labor Day, the source said. It was expected to kick off earlier this month, but filing of the company's proxy got delayed until Aug. 8, the day that the market fell hundreds of points, the source said. As a result, the decision was made to move the launch to September.

Closing is expected in the second half of this year, subject to certain conditions, including shareholder and regulatory approvals. It is not subject to financing.

Kinetic Concepts is a San Antonio-based medical technology company.

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