Prospect Medical holders may put 12¾% notes with change of control

By Jennifer Chiou

New York, Aug. 16 - Prospect Medical Holdings Inc. announced that with its buyout by Leonard Green & Partners LP, holders of its 12¾% senior secured notes due 2014 will have the right to put back their securities due to the change of control of the company.

Holders will be entitled to require Prospect to repurchase all or a portion of the notes at 101 plus accrued interest.

Funds affiliated with Leonard Green & Partners have agreed to backstop the company's obligation to repurchase any notes that are put back, according to a company news release.

Under the acquisition agreement, Leonard Green is purchasing the company for $8.50 per share in cash. The total transaction value is about $363 million, including the assumption of about $158 million in net debt.

Prospect Medical is an owner and operator of five community-based hospitals in Los Angeles and a manager of the provision of health care services of HMO enrollees.

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