AmSurg details $1.39 billion facility structure, talk with launch

By Sara Rosenberg

New York, June 30 – AmSurg Corp. held its bank meeting on Monday, launching a $1.39 billion senior secured credit facility (Ba2) that consists of a $300 million five-year revolver and a $1.09 billion seven-year covenant-light term loan B, according to a market source.

Price talk on the term loan B is Libor plus 325 basis points with a 1% Libor floor and an original issue discount of 99˝, the source said.

The B loan has 101 soft call protection for six months and amortization of 1% per annum.

Included in the revolver is a total leverage test and minimum interest coverage test, each with 30% cushion to EBITDA to be tested at all times.

The credit agreement has a $300 million accordion plus additional amounts subject to senior secured leverage of less than 3.25 times and 50 bps MFN.

Mandatory prepayments are 50% of excess cash flow with step-downs, 100% of asset sale proceeds subject to reinvestment within 365 days and actually completed within 180 days thereafter, 100% of debt issuance proceeds other than permitted debt and 100% of insurance recovery and condemnation events subject to reinvestment within 365 days and actually completed within 180 days thereafter.

Commitments are due at 5 p.m. ET on July 8, the source added.

Citigroup Global Markets Inc., SunTrust Robinson Humphrey Inc., Bank of America Merrill Lynch, Jefferies Finance LLC and Wells Fargo Securities LLC are joint lead arrangers and bookrunners on the deal.

Proceeds will be used to help fund the company’s $2.35 billion acquisition of Sheridan Healthcare from Hellman & Friedman LLC, to repay revolver borrowings and existing senior secured notes, for working capital and to add cash to the balance sheet.

Other funds for the transaction will come from cash on hand, the issuance of common stock, a mandatory convertible preferred offering and $880 million of senior unsecured notes.

Closing is expected in mid-July, subject to customary conditions and regulatory approvals.

Amsurg is a Nashville-based acquirer, developer and operator of ambulatory surgery centers. Sheridan Healthcare is a Sunrise, Fla.-based provider of multi-specialty outsourced physician services to hospitals, ambulatory surgery centers and other health-care facilities.

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