MedAssets ups term loan to $635 million, cuts bonds to $325 million

By Sara Rosenberg

New York, Nov. 8 - MedAssets Inc. increased the size of its six-year term loan B to $635 million from $600 million as its senior unsecured bond offering was reduced to $325 million from $360 million, according to a market source.

The now $785 million credit facility (Ba3/BB-), up from $750 million, also includes a $150 million five-year revolver.

Price talk on the term loan B and the revolver is Libor plus 400 basis points to 425 bps with a 1.5% Libor floor.

The term loan B is being offered at an original issue discount of 99 and has 101 soft call protection for one year.

Barclays and JPMorgan are the joint lead arrangers on the deal, with Barclays the left lead and administrative agent.

Financial covenants include a maximum total leverage ratio and a minimum ratio of consolidated EBITDA to cash consolidated interest expense.

Proceeds from the credit facility and the notes will be used to fund the acquisition of the Broadlane Group and to refinance existing bank debt.

Under the acquisition agreement, MedAssets is buying Broadlane, a Dallas-based end-to-end cost-management partner for health care providers, for roughly $850 million in cash, with $725 million to be paid at closing and $125 million to be paid in January 2012.

The total funded debt will be 5.2 times trailing pro forma adjusted EBITDA, taking into consideration the company's estimate for cost-based synergies.

MedAssets is an Alpharetta, Ga.-based provider of technology enabled products and services for hospitals, health systems and ancillary health care providers.

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