SXC Health launches $1.8 billion credit facility at Libor plus 200 bps

By Sara Rosenberg

New York, May 21 - SXC Health Solutions Corp. launched its $1.8 billion five-year senior secured credit facility with price talk of Libor plus 200 basis points, according to a market source.

The facility consists of a $700 million revolver and a $1.1 billion term loan A, the source said.

Based on filings with the Securities and Exchange Commission, it was previously expected that the deal would be comprised of a $350 million five-year revolver and a $650 million five-year term loan A, both priced at Libor plus 250 bps, and an $800 million seven-year term loan B priced at Libor plus 325 bps with a 1% Libor floor and 101 soft call protection for one year.

J.P. Morgan Securities LLC is the left lead on the deal, and Bank of America Merrill Lynch, Barclays Bank Inc. and SunTrust Robinson Humphrey Inc. were recently added as commitment providers.

Proceeds will be used to fund the acquisition of Catalyst Health Solutions Inc. and to refinance some debt at both companies.

Under the agreement, Catalyst is being purchased in a cash and stock transaction valued at about $4.4 billion.

Catalyst shareholders will receive $28 in cash and 0.6606 of a share of SXC stock per share, which implies a purchase price of $81.02 per share.

At close, SXC shareholders are expected to own around 65% of the combined company, and Catalyst shareholders are expected to own about 35%.

The combined company will have $13 billion in revenue.

Closing is anticipated in the second half of the year, subject to approval by shareholders at both companies, U.S. antitrust approval and other customary conditions.

SXC is a Lisle, Ill.-based provider of pharmacy benefits management and health care information technology services. Catalyst is a Rockville, Md.-based provider of pharmacy benefits management.

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