Virtual Radiologic $213 million term loan B talked at discount of 98½

By Sara Rosenberg

New York, Nov. 1 - Virtual Radiologic is talking its $213 million term loan B with an original issue discount of 98½ ahead of its Tuesday bank meeting, according to a market source.

As was previously reported, price talk on the B loan is Libor plus 550 basis points with a 1.75% Libor floor.

The company's $253 million senior secured credit facility also includes a $40 million revolver.

GE Capital and SunTrust are the joint bookrunners on the deal.

Proceeds will be used to help fund the acquisition of NightHawk Radiology Holdings Inc. for $6.50 per share in cash. The transaction is valued at roughly $170 million.

Other funding for the acquisition is expected to come from an $80 million commitment from BlackRock Kelso Capital Advisors LLC, Newstone Capital Partners LLC and Providence Equity Capital Markets LLC.

Closing on the transaction is expected in the first quarter of 2011, subject to customary conditions, including the approval of NightHawk's stockholders.

Virtual Radiologic is an Eden Prairie, Minn.-based radiology practice and developer of radiologist workflow technology. NightHawk is a Scottsdale, Ariz.-based provider of radiology services to radiology groups.

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