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Odyssey HealthCare outlines expected pricing on $150 million credit facility for VistaCare purchase
By Sara Rosenberg
New York, Jan. 23 - Odyssey HealthCare, Inc. detailed expected pricing on its proposed $150 million senior secured credit facility that will be used to help fund the acquisition of VistaCare, Inc., according to an SC 13D filed with the Securities and Exchange Commission Wednesday.
Both the $30 million five-year revolver and the $120 million six-year term loan are expected to be priced at Libor plus 300 basis points, with the revolver carrying a commitment fee of 25 bps.
Pricing on the revolver will be based on a leverage grid. If leverage is equal to or greater than 2.50:1.00, the spread will be Libor plus 325 bps; if leverage is equal to or greater than 1.75:1.00 but less than 2.50:1.00, the spread will be Libor plus 300 bps; if leverage is equal to or greater than 1.25:1.00 but less than 1.75:1.00, the spread will be Libor plus 275 bps; and if leverage is less than 1.25:1.00, the spread will be Libor plus 250 bps.
Financial covenants under the facility include a maximum leverage ratio and a minimum fixed-charge coverage ratio.
GE Capital is the lead arranger on the deal.
Odyssey is buying Scottsdale, Ariz.-based VistaCare, a provider of hospice services, for $8.60 per share, or $147.1 million.
The transaction is structured as a two-step process that includes a cash tender offer for all outstanding shares of VistaCare common stock followed by a cash merger, in which Odyssey would acquire any remaining outstanding shares of VistaCare common stock.
Completion of the acquisition is expected in the first quarter, subject to customary closing conditions, including the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the tender of at least a majority of VistaCare's outstanding shares.
Odyssey is a Dallas-based provider of hospice care.
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