Kinetic Concepts to kick off term loan on Monday; loan and bond sizes to be determined

By Paul A. Harris

Portland, Ore., Sept. 29 - Kinetic Concepts Inc. will begin marketing its term loan at a bank meeting on Monday in London, according to an informed source.

A U.S. bank meeting is expected to follow later in the Oct. 3 week, although scheduling remains to be firmed up.

Although the term loan portion of the financing has been given as $2.6 billion, the final size remains to be determined, and could be revised downward, according to the source.

The final size of the expected $2.15 billion of high-yield bonds is also subject to revision, the source added.

The $2.15 billion bridge loan backing the bonds, now in the process of syndication, will not change, the source added.

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) Inc. and RBC Capital Markets are leading the term loan.

The credit facility also includes a $200 million five-year revolver.

The bridge loan, which is being led by Morgan Stanley, is comprised of a $1.25 billion second-lien bridge and a $900 million unsecured bridge.

The loan and bonds are part of the financing for the buyout of the company by Apax Partners, Canada Pension Plan Investment Board and the Public Sector Pension Investment Board, which are acquiring Kinetic Concepts 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 $1.75 billion of equity.

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

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