Surgery Center sets Tuesday launch for $250 million credit facility

By Sara Rosenberg

New York, March 9 - Surgery Center Holdings Inc. has scheduled a bank meeting for Tuesday to launch its proposed senior secured credit facility, according to a market source, which is expected to be sized at $250 million.

Jefferies Finance LLC is the lead bank on the deal.

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

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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