Amneal subsidiary plans $180 million term loan for AvKARE purchase

By Sara Rosenberg

New York, Dec. 10 – Amneal Pharmaceuticals Inc. plans on getting a new $180 million senior secured term loan at an unrestricted subsidiary for its acquisition of a 65.1% majority interest in AvKARE Inc., according to a news release.

SunTrust Robinson Humphrey Inc. is the lead arranger on the loan.

The term loan is expected to be done through a pro rata execution that will likely be a January event, a market source said.

The new loan will be secured by the newly formed unrestricted subsidiary and will not impact Amneal’s existing term loan.

Along with the term loan, the company intends to get a $30 million revolver, an 8-K filed with the Securities and Exchange Commission revealed.

Under the agreement, AvKARE is being bought for an implied enterprise value of $340 million and will operate on a stand-alone basis as an independent subsidiary of Amneal.

Other funds for the transaction will come from about $75 million of balance sheet cash, a roughly $44 million seller note and the selling shareholders’ rollover interest in the newly formed subsidiary.

Closing is expected in early 2020, subject to customary conditions and regulatory approvals.

Amneal is a Bridgewater, N.J.-based pharmaceutical company. AvKARE is a provider of generic pharmaceuticals in the U.S. federal agency sector.

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