Lannett to launch roughly $1.29 billion credit facility on Tuesday

By Sara Rosenberg

New York, Oct. 9 – Lannett Co. Inc. scheduled a bank meeting for 11 a.m. ET in New York on Tuesday to launch its proposed $1,285,000,000 senior secured credit facility, according to a market source.

Morgan Stanley Senior Funding Inc., RBC Capital Markets and Citigroup Global Markets Inc. are the joint lead arrangers and bookrunners on the deal. Citizens Bank and PNC Bank are co-documentation agents.

The facility consists of a $1.16 billion seven-year term loan B and a $125 million five-year revolver.

Official price talk is not yet available.

Based on the commitment letter, pricing on the term loan and revolver is expected at Libor plus 425 basis points.

Additionally, the term loan is anticipated to have a 1% Libor floor and 101 soft call protection for six months, and the revolver is expected to have a 50 bps commitment fee.

Proceeds will be used to help fund the acquisition of Kremers Urban Pharmaceuticals Inc., the U.S. specialty generic pharmaceuticals subsidiary of biopharmaceuticals company UCB SA, for $1.23 billion plus potential contingency payments.

Other funds for the transaction will come from cash on hand.

Closing is expected in the fourth quarter.

Lannett is a Philadelphia-based manufacturer of generic pharmaceutical products.

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