Quest Diagnostics tenders for AmeriPath's 10½% notes

By Jennifer Chiou

New York, May 21 - Quest Diagnostics Inc. announced the start of a tender offer for AmeriPath, Inc.'s $350 million of 10½% senior subordinated notes due 2013.

On April 16, the company signed a definitive agreement to acquire AmeriPath in an all-cash transaction valued at about $2 billion, including some $770 million in debt. The transaction is expected to be completed during the second quarter.

The company is also soliciting consents to amend the note indenture to eliminate substantially all of the restrictive provisions.

The consent deadline is 5 p.m. ET on June 4. The tender offer ends at midnight ET on June 18.

For each $1,000 principal amount of notes, Quest said it will determine its payout using a fixed spread of 50 basis points and the yield to maturity of the 4 5/8% Treasury due March 31, 2008. The payout will include a $30 consent payment for those who tender by the consent deadline.

As already reported, Quest Diagnostics said proceeds from a new $1 billion one-year bridge loan and a new five-year $1.5 billion term loan, both underwritten by Morgan Stanley, will be used to finance the transaction, to refinance AmeriPath's existing debt and to refinance the debt from the HemoCue acquisition completed earlier this year.

Quest is seeking consents from holders of a majority of the notes, and the offer is conditioned on the completion of the acquisition and adequate financing.

Morgan Stanley & Co. Inc. is the dealer manager (212 761-5384). Global Bondholder Services Corp. is the information agent (866 804-2200).

AmeriPath is a diagnostic test company based in Palm Beach Gardens, Fla., that is controlled by equity investment firm Welsh, Carson, Anderson and Stowe.

Quest Diagnostics, located in Lyndhurst, N.J., provide diagnostic testing, information and services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.