Concordia, GTT Communications break; AmSurg dips with Team Health bid; B&G revises loan

By Sara Rosenberg

New York, Oct. 20 – Concordia Healthcare Corp. and GTT Communications Inc. saw their credit facilities hit the secondary market on Tuesday, and AmSurg Corp.’s term loan was softer in trading after the company announced an acquisition bid for Team Health Holdings Inc.

Moving to the primary market, B&G Foods Inc. increased the size of its term loan B, lowered the spread and firmed the original issue discount at the tight end of talk.

Concordia frees up

Concordia Healthcare’s credit facility began trading on Tuesday afternoon, with the $1.1 billion six-year term loan quoted at 94¾ bid, 95¾ offered before moving up to 95 bid, 96 offered, a trader said.

Pricing on the term loan is Libor plus 425 basis points with a 1% Libor floor, and it was issued at an original issue discount of 94.5. The debt has 101 soft call protection for one year.

The company’s roughly $2,065,000,000 secured credit facility (B+) also includes a $200 million revolver and a £500 million six-year term loan.

The sterling term loan is priced at Libor plus 475 bps with a 1% Libor floor and was issued at a discount of 93.5. This tranche has 101 soft call protection for one year.

Concordia lead banks

Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and RBC Capital Markets are leading Concordia’s credit facility.

Earlier in the day Tuesday, the original issue discount on the U.S. term loan firmed at the tight end of revised talk of 93.5 to 94.5 and wide of initial talk of 99, and the discount on the sterling term loan finalized at the wide end of the revised talk of 93.5 to 94.5 and wide of initial talk of 99.

And, previously in syndication, pricing on the U.S. term loan was set at the high end of the Libor plus 400 bps to 425 bps talk, the spread on the sterling term loan firmed at the high end of the Libor plus 450 bps to 475 bps talk, the call protection was extended from six months, maturities were shortened from seven years, amortization was revised to 1% in year one, 2.5% in years two and three and 5% per annum thereafter, the MFN sunset was eliminated and the incremental allowance was cut to $250 million from $500 million.

Concordia buying Amdipharm

Proceeds from Concordia’s credit facility, $180 million of bridge loans, $790 million of notes, $520 million of proceeds raised from a recent public equity offering and cash on hand will be used to fund the acquisition of Amdipharm Mercury Ltd. from Cinven and to refinance bank debt at both companies.

Amdipharm is being bought for about $3.5 billion, consisting of cash consideration of about $1.2 billion, 8.49 million common shares of Concordia and the assumption of around $1.4 billion Amdipharm net debt upon closing, as well as a maximum performance-based earn-out of around $220 million payable in cash in the fourth quarter of 2016.

Closing is expected on Oct. 21, subject to satisfaction of certain customary conditions including stock exchange approval for the consideration shares that are issuable as part of the purchase price.

Concordia is an Oakville, Ont.-based health care company focused on legacy pharmaceutical products and orphan drugs. Amdipharm is a London-based pharmaceutical company.

GTT starts trading

GTT Communications’ credit facility freed up for trading too, with the $400 million term loan B quoted bid anywhere from 98¼ to 99 after allocation, with no offers, according to a market source.

Pricing on the B loan is Libor plus 525 bps with a 1% Libor floor, and it was sold at an original issue discount of 98. The debt has 101 soft call protection for six months.

During syndication, pricing on the term loan was increased from talk of Libor plus 450 bps to 475 bps, the discount widened from 99, the starter basket on the incremental was changed to $75 million, and the unlimited basket was set to a half turn inside closing date leverage, from initially proposed amounts of $100 million with unlimited at closing leverage, the MFN sunset was eliminated and the excess cash flow sweep was lifted to 75% when leverage is greater than 3 times, from 50%.

The company’s $450 million credit facility (B2/B+) also includes a $50 million revolver.

GTT buying One Source

Proceeds from GTT’s credit facility will be used to fund the acquisition of One Source Networks for $175 million, consisting of $165 million in cash and about $10 million in GTT common stock, and to refinance existing debt.

KeyBanc Capital Markets LLC and SunTrust Robinson Humphrey Inc. are leading the deal.

Pro forma total debt to annualized adjusted EBITDA is expected to be about 4.1 times.

GTT is a McLean, Va.-based provider of cloud networking services. One Source is an Austin, Texas-based provider of global data, internet, session initiation protocol trunking and managed services.

AmSurg weakens

Also in trading, AmSurg’s term loan dipped to 99½ bid, par offered from 99 7/8 bid, 100 3/8 offered following news that the company is offering to purchase Team Health for $71.47 per Team Health share, or a total enterprise value of $7.8 billion, a trader remarked.

The purchase price is made of cash consideration of $11.49 per share and stock, resulting in pro forma 50/50 ownership of the combined company.

AmSurg revealed in an 8-K filed with the Securities and Exchange Commission that it would use a mix of new bank debt and bonds to fund the cash consideration for the acquisition and to refinance Team Health’s debt.

The trader explained that the possibility of incremental debt at AmSurg should the acquisition move forward put pressure on the existing term loan, moving it lower in trading.

Following a meeting in September, Team Health chose not to engage in the acquisition talks, the regulatory filing said. However, AmSurg’s current goal is to get Team Health to reconsider.

AmSurg is a Nashville, Tenn.-based acquirer, developer and operator of ambulatory surgery centers in partnership with physicians. Team Health is a provider of outsourced physician staffing solutions for hospitals.

B&G changes emerge

Switching to the primary market, B&G Foods raised its seven-year second secured term loan B (Ba3/BB+) to $750 million from $500 million, trimmed pricing to Libor plus 300 bps from talk of Libor plus 325 bps to 350 bps and set the original issue discount at 99.5, the tight end of the 99 to 99.5 talk, according to a market source.

As before, the term loan has a 0.75% Libor floor and 101 soft call protection for six months.

Recommitments were due by 5 p.m. ET on Tuesday, the source said.

Barclays, Bank of America Merrill Lynch, RBC Capital Markets, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and BMO Capital Markets are leading the loan.

B&G funding acquisition

Proceeds from B&G Foods’ term loan B will be used to help finance the acquisition of the Green Giant and Le Sueur brands from General Mills Inc. for around $765 million.

Other funds for the transaction will come from a draw under the company’s existing $500 million revolver, but the size of the draw is being reduced due to the term loan B upsizing, the source added.

Senior secured leverage is 3.6 times, and net total leverage is 5.8 times.

Closing is expected in the fourth quarter, subject to customary conditions and regulatory approvals.

B&G Foods is a Parsippany, N.J.-based manufacturer, seller and distributor of shelf-stable foods. The Green Giant and Le Sueur brands are leaders in the frozen and canned vegetables market.

NN closes

In other news, NN Inc. completed its acquisition of Precision Engineered Products Holdings Inc., an Attleboro, Mass.-based manufacturer of highly engineered precision customized solutions for the medical, electrical, transportation and aerospace end markets, a news released said.

To help fund the transaction, NN got a new $625 million senior secured credit facility (Ba3/BB-) that includes a $100 million five-year revolver and a $525 million seven-year covenant-light term loan.

The revolver is priced at Libor plus 350 bps, and pricing on the term loan is Libor plus 475 bps with a 1% Libor floor, and it was issued at a discount of 98. The term loan has 101 soft call protection for six months.

During syndication, the spread on the term loan was lifted from talk of Libor plus 425 bps to 450 bps and the discount widened from 99.

KeyBanc Capital Markets Inc., SunTrust Robinson Humphrey Inc. and Regions Capital Markets led the deal for NN, a Johnson City, Tenn.-based manufacturer of high precision metal bearing components, industrial plastic and rubber products and precision metal components.

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