Shire arranges $850 million short-term bank facility with Citibank to fund NPS Pharma acquisition

By Lisa Kerner

Charlotte, N.C., Jan. 12 – Shire plc will use new and existing financing as well as cash on hand to fund its $5.2 billion acquisition of NPS Pharmaceuticals, Inc.

“We will fund the acquisition using cash on hand, our existing $2.1 billion committed bank facility, and a newly arranged $850 million short-term bank facility,” said Shire chief executive officer Flemming Ornskov during a conference call to discuss the transaction details.

“Both the revolving credit facility as well as the additional short-term bank facility have (an) interest rate of about 1.5%,” said interim chief financial officer Jeff Poulton on the call.

Short-term loan details

Shire and its English process agent Shire Global Finance entered into an $850 million term loan facility agreement on Jan. 11 with Citibank International Ltd.

The facility, which matures on Jan. 10, 2016, may be used only to finance the purchase price of the acquisition, according to a form 8-K filed with the Securities and Exchange Commission.

The interest rate applicable to the facility is Libor plus 50 basis points per annum and increases by 25 bps per annum under certain conditions.

Under the loan agreement, Shire’s net debt to EBITDA must not exceed 3.5:1.

Citi Global Markets Ltd. acted as lead arranger and bookrunner.

The company plans to refinance the short-term bank facility through new debt issuances “in due course,” and the transaction is not subject to any financing contingency.

Shire will acquire all of the outstanding shares of NPS Pharma at $46 per share in cash. Closing is expected in the first quarter.

Based in Bedminster, N.J., NPS develops small molecules and recombinant proteins to treat metabolic, bone and mineral and central nervous system diseases.

Shire is a biopharmaceutical company based in Dublin with a registered office in St. Helier, Jersey.

© 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.