Axcan Holdings upsizes term loan to $750 million, adds delayed-draw

By Sara Rosenberg

New York, Feb. 4 - Axcan Holdings Inc. is now looking to get $750 million of term loan borrowings, including a $500 million funded tranche and a $250 million delayed-draw tranche, according to an 8-K filed with the Securities and Exchange Commission on Friday.

This is the second upsizing for the company. The term loan had initially been sized at $225 million, but then was increased to $450 million after the company decided to cancel plans for a $225 million secured notes offering.

Prior to this latest increase, price talk on the term loan was Libor plus 475 basis points with a 1.5% Libor floor and an original issue discount of 991/2, and there was 101 soft call protection for one year.

Bank of America, RBC Capital Markets, HSBC Securities and Barclays Capital are the joint lead arrangers and bookrunners on the deal.

Proceeds from the funded term loan, along with equity and cash on hand, will be used to fund the acquisition of Eurand NV for $12 per share, or $586.5 million total on a fully diluted basis, to repay Eurand's debt and to repay Axcan's outstanding term loan.

The delayed draw term loan would be used to redeem or repurchase Axcan's existing 9.25% senior secured notes due March 1, 2015.

Axcan is a Mont-Saint-Hilaire, Quebec-based pharmaceutical company focused on the treatment of gastrointestinal disorders. Eurand is an Amsterdam-based specialty pharmaceutical company.

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