Surgery Center $250 million credit facility expected as March business

By Sara Rosenberg

New York, Feb. 14 - Surgery Center Holdings Inc.'s proposed $250 million senior secured credit facility is currently expected to come to market sometime in March, according to a market source.

Jefferies Finance LLC is the lead bank on the deal.

The facility consists of a $230 million 53/4-year term loan and a $20 million five-year revolver, with both tranches expected at Libor plus 525 basis points with a 1.75% Libor floor, according to filings with the Securities and Exchange Commission.

The revolver has a 50 bps unused fee.

Financial covenants include a maximum total leverage ratio, a minimum fixed charge coverage ratio and a maximum capital expenditures requirement.

Proceeds will be used to help fund the acquisition of NovaMed Inc. for $13.25 per share in cash. The transaction is valued at roughly $214 million, including the assumption or repayment of $105 million of debt.

Other funds for the transaction will come from $53.8 million of mezzanine financing from THL Credit Inc.

The acquisition is expected to close in the second quarter, subject to customary conditions, including antitrust and regulatory approvals and stockholder approval.

Surgery Partners is a Tampa, Fla.-based acquirer, developer and manager of free-standing ambulatory surgical centers. NovaMed is a Chicago-based operator, developer and acquirer of ambulatory surgery centers.

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