MJ Acquisition flexes $450 million term loan B to Libor plus 300 bps

By Sara Rosenberg

New York, May 6 – MJ Acquisition Corp. trimmed pricing on its $450 million seven-year term loan B (Ba3/BB-) to Libor plus 300 basis points from talk of Libor plus 350 bps to 375 bps, according to a market source.

Furthermore, the original issue discount on the term loan B was revised to 99.75 from 99.5 and the 101 soft call protection was extended to one year from six months, the source said.

The term loan B still has a 1% Libor floor.

In addition to the term loan B, the company’s $700 million credit facility includes a $50 million five-year revolver (Ba3/BB-) and a pre-placed $200 million second-lien term loan (Caa1/B-).

J.P. Morgan Securities LLC is the lead bank on the debt.

Proceeds will be used to help fund the acquisition of Concentra Inc. by MJ Acquisition, a joint venture between Select Medical Holdings Corp. and Welsh, Carson, Anderson & Stowe, from Humana Inc. for about $1,055,000,000 in cash, subject to customary adjustments.

Other funds for the transaction will come from equity.

Closing is expected this quarter, subject to Hart Scott Rodino regulatory clearance and customary conditions.

Select Medical will own 50.1% of MJ Acquisition, and Welsh, Carson, Anderson & Stowe will own 49.9%.

Concentra is a health care company that delivers a wide range of medical services to employers and patients.

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