Fisher Scientific, Iasis and Nice-Pak flood the secondary with new paper

By Sara Rosenberg

New York, June 15 - The primary focus in the secondary market Tuesday was the influx of new paper as a number of deals allocated and broke for trading, including Fisher Scientific International Inc., Iasis Healthcare Corp. and Nice-Pak Products Inc.

Fisher Scientific's term loan B was quoted at par ½ bid upon breaking late in the day, according to a trader.

Iasis' term loan B was seen trading north of 101 as trading levels progressively moved higher from 101 to 101 3/8, the trader added.

Lastly, Nice-Pak's term loan was seen quoted at 101 bid, 101¼ offered by the end of the day, up about a point from its original issue price of par, according to a second trader. Shortly after it allocated the paper was seen at par 5/8 bid, 101 offered but levels steadily increased throughout the day, a fund manager added.

Fisher Scientific's $150 million term loan B is priced with an interest rate of Libor plus 150 basis points.

The company's $1.1 billion credit facility (Ba2/BBB) also contains a $300 million delayed draw term loan A priced with an interest rate of Libor plus 125 basis points, a $400 million revolver priced with an interest rate of Libor plus 125 basis points and a $250 million term loan A priced with an interest rate of Libor plus 125 basis points.

The $300 million delayed draw term loan A was added during the first week of June. At that time, a number of other changes were made to the deal including modifications to pricing and shifts in tranche sizes. The revolver was reverse flexed from original pricing of Libor plus 150 basis points, the term loan A was increased to $250 million from an original size of $150 million and reverse flexed from Libor plus 150 basis points and the term loan B was decreased to $150 million from an original size of $250 million and reverse flexed original pricing from Libor plus 175 basis points.

Bank of America, Deutsche Bank and Credit Suisse First Boston are the lead banks on the deal.

Proceeds from the credit facility will be used to help fund the merger between Fisher and Apogent Technologies Inc. Under the terms of the merger, Apogent shareholders will receive tax-free 0.56 shares of Fisher Scientific's common stock for each share of Apogent common stock they own. Upon completion of the transaction, Fisher's shareholders would own about 57% of the combined company, and Apogent's shareholders would own about 43%. The companies anticipate that the transaction will be completed early in the third quarter of the 2004. The combined scientific research and laboratory products company will be called Fisher Scientific International Inc. and will be based in Hampton, N.H.

The merger requires the approval of the shareholders of both Fisher Scientific and Apogent Technologies, as well as customary regulatory approvals. Fisher and Apogent intend to hold meetings of stockholders on June 28. And, on May 21, the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act expired.

Iasis' $425 million term loan B is priced with an interest rate of Libor plus 225 basis points, after being reverse flexed last week from initial pricing of Libor plus 250 basis points.

The $675 million credit facility (B1/B+) also contains a $250 million revolver with an interest rate of Libor plus 250 basis points.

Bank of America, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch are the lead banks on the deal, with Bank of America listed on the left.

Proceeds, combined with proceeds from a bond deal, will be used to help fund the acquisition of Iasis by an investor group led by Texas Pacific Group from JLL Partners in a transaction valued at about $1.4 billion.

The LBO is subject to regulatory approvals, financing and other customary closing conditions and is expected to close by June 30.

The refinancing of Iasis' credit facility and the receipt of financing are all conditions to the company's newly announced tender offer.

Iasis is a Franklin, Tenn., owner and operator of medium-sized acute care hospitals.

Nice-Pak's $100 million term loan is priced with an interest rate of Libor plus 350 basis points. The tranche was originally sized at $110 million but that was changed during syndication along with a flex up in pricing.

Bank of America is the lead bank on the deal for the Orangeburg, N.Y., wet wipes supplier.

Horizon Lines launch Wednesday

Horizon Lines LLC has set a bank meeting for Wednesday to launch its proposed $275 million credit facility, according to a market source. Previously, it was only known that the deal would launch sometime in mid-to-late June with specific timing still to be determined.

UBS and Goldman Sachs are joint lead arrangers on the credit facility, with UBS listed on the left. ABN Amro is the documentation agent.

The credit facility consists of a $25 million revolver with price talk of Libor plus 275 basis points and a $250 million term loan with price talk of Libor plus 300 basis points; however, this is preliminary price talk that may change subject to ratings.

The company is also expected to hit the high-yield market this month with a $250 million bond offering via the same three banks but with Goldman Sachs listed as left lead.

Following the transactions, total leverage will be 5x and senior leverage will 2.5x.

Proceeds from the debt transactions will be used to help fund Castle Harlan Inc.'s previously announced acquisition of Horizon Lines from The Carlyle Group for $650 million. Castle Harlan Partners IV LP, an investment fund totaling $1.163 billion in commitments that closed last September, is the actual buyer of Horizon Lines.

Horizon Lines is a Charlotte, N.C., container shipping company.

United Industries financing

United Industries plans to finance the $360 million acquisition of United Pet Group Inc. through a combination of debt and equity, with the debt commitments coming from Bank of America and the equity coming from Thomas H. Lee Partners, according to a company news release.

However, whether the debt will come in the form of a new credit facility, an add-on to the existing facility that was just obtained in April or through some other means was undisclosed.

"I would think it would come through an add-on," a fund manager said, adding that it was pure speculation at this point since he hadn't heard anything concrete about the financing. "They had the ability to increase the size of their credit facility. But it's a $360 million acquisition so I don't know if it's enough."

United Industries' current facility, that was used to fund the acquisition of Nu-Gro, consists of a $125 million revolver due 2010 with an interest rate that can range from Libor plus 175 to 250 basis points, a $335 million term loan due 2011with an interest rate of Libor plus 250 basis points and a $50 million Canadian term loan due 2011 with an interest rate of Libor plus 250 basis points.

Under the credit agreement, the company can request a $100 million increase in commitments under the term loan or the revolver.

As of April 30, the company had unused availability under the revolver of $47 million.

Bank of America and Citigroup were the lead banks on the credit facility.

United Industries is a St. Louis manufacturer and marketer of products for the consumer lawn and garden care and household insect control markets.

Sterigenics closes

The acquisition of Sterigenics International Inc. by PPM Ventures Ltd. and PPM America Capital Partners LLC from Ion Beam Applications for $311.5 million was completed, according to a company news release.

To help fund the transaction, Sterigenics obtained a new $240.5 million senior secured credit facility via UBS as lead bank.

The facility consists of a $170.5 million term loan with an interest rate of Libor plus 300 basis points (B2/B+), a $35 million revolver with an interest rate of Libor plus 275 basis points (B2/B+) and a $35 million second-lien term loan with an interest rate of Libor plus 625 basis points (B3/B-).

Sterigenics is an Oak Brook, Ill., provider of contract sterilization and ionization services for medical devices, food safety and advanced materials applications.

Callon closes

Callon Petroleum Co. closed on its new $175 million three-year senior secured revolver. Union Bank of California was the lead bank on the deal.

The facility includes an initial borrowing base of $60 million, which will be adjusted on a quarterly basis throughout 2004 to reflect the results of intervening operations from the company's deepwater properties and an anticipated increase in proved producing reserves as the development of the company's Medusa property nears completion, according to a company news release.

At closing, $21 million was drawn under the revolver for repayment of existing debt.

Callon is a Natchez, Miss., explorer, developer, acquirer and operator of oil and gas properties.

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