Aceto to get $80 million facility for Rising Pharmaceuticals purchase

By Sara Rosenberg

New York, Dec. 20 - Aceto Corp. has received a commitment for an $80 million five-year senior secured credit facility to help fund its acquisition of Rising Pharmaceuticals Inc., according to an 8-K filed with the Securities and Exchange Commission on Monday.

The facility consists of a $40 million revolver and a $40 million term loan.

Pricing on the facility is expected to range from Libor plus 225 basis points to 350 bps based on the ratio of consolidated funded debt to consolidated EBITDA.

The revolver unused fee can range from 25 bps to 50 bps, also based on the ratio of consolidated funded debt to consolidated EBITDA.

Also, lenders are expected to be paid a 37.5 bps upfront fee.

J.P. Morgan Securities LLC is the lead arranger on the deal and will hold up to $40 million of the credit facility with the balance to be provided by one or two additional financial institutions. Each lender would be required to hold the same pro rata share of the revolver and the term loan.

Amortization on the term loan is $6 million in years one and two, $7 million in year three, $8 million in year four and $13 million in year five.

Financial covenants include a consolidated debt service coverage ratio and a ratio of consolidated total funded debt to consolidated EBITDA.

Aceto is purchasing Rising Pharmaceuticals, an Allendale, N.J.-based company that markets and distributes generic prescription and over the counter pharmaceutical products, for $80 million. The purchase price will be funded at closing by one million shares of Aceto common stock and the balance in cash.

Closing is expected by Dec. 31.

Aceto is a Lake Success, N.Y.-based distributor of chemical compounds.

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