Aveta $420 million credit facility to launch Tuesday

By Sara Rosenberg

New York, July 21 - Aveta Holdings LLC is scheduled to hold a bank meeting on Tuesday morning to launch its proposed $420 million credit facility (B2/B-), according to a market source. Bear Stearns is the sole lead bank on the deal.

The facility consists of a $400 million six-year term loan and a $20 million five-year revolving credit facility, with price talk on both tranches expected to come out at next week's bank meeting, the source said.

Proceeds will be used to help fund MMM Healthcare's acquisition of NAMM, in which Aveta will be the holding company for the merged entity, to refinance MMM debt and to pay a dividend to MMM shareholders.

MMM is the largest Medicare advantage provider in Puerto Rico. NAMM is a provider of outsourced medical management in California and Illinois.

On a combined basis, last-12-month EBITDA is around $93.5 million.

Total and senior leverage is around 4.28x, but with the combined company's substantial cash flows and rising EBITDA, leverage is expected to fall to the mid-3s by year-end, the source explained.

On a combined basis, the company has about 31% compounded annual revenue growth from 2002 year to date and about 69% compounded annual EBITDA growth from 2002 year to date.

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