Accellent discloses first- and second-lien term loan talk with launch

By Sara Rosenberg

New York, Feb. 11 - Accellent Inc. released price talk on its $795 million seven-year first-lien term loan and $260 million eight-year second-lien term loan in connection with its bank meeting on Tuesday, according to a market source.

The first-lien term loan is talked at Libor plus 350 basis points to 375 bps with a 1% Libor floor and an original issue discount of 991/2, and the second-lien term loan is talked at Libor plus 725 bps to 750 bps with a 1% Libor floor and a discount of 99, the source said.

Included in the first-lien term loan is 101 soft call protection for six months, and the second-lien term loan has call protection of 102 in year one and 101 in year two.

Amortization on the first-lien term loan is 1% per annum.

The company's $1.13 billion credit facility also provides for a $75 million five-year revolver.

Commitments are due on Feb. 25, the source added.

UBS Securities LLC, Goldman Sachs Bank USA and KKR Capital Markets LLC are the bookrunners on the financing, with UBS the left lead on the first-lien debt and Goldman Sachs the left lead on the second-lien debt.

Proceeds will be used to fund the acquisition of Lake Region Medical, to refinance an existing credit facility and to repay all of Accellent's senior notes and senior subordinated notes.

Under the agreement, Lake Region, an original development manufacturer of minimally invasive devices and delivery systems to the cardiology and endovascular markets, is being bought for $315 million, plus rollover stockholders will contribute $75 million of their stock for shares of the merged company.

The merged business will be called Lake Region Medical, and the company will continue to use the Accellent brand in marketing the advanced surgical business.

Closing is expected this quarter, subject to regulatory approvals and other customary conditions.

Accellent is a Wilmington, Mass.-based provider of fully integrated outsourced manufacturing and engineering services to the medical device industry.

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