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BioScrip, Option Care plan $1.08 billion loans with merger
By Sara Rosenberg
New York, March 15 – BioScrip and Option Care Enterprises Inc. have received a commitment for $1,075,000,000 of senior secured credit facilities to help support the merger of the two companies, according to an SC 13D/A filed with the Securities and Exchange Commission on Friday.
Bank of America Merrill Lynch is the lead arranger and administrative agent on the debt.
The facilities consist of a $925 million seven-year covenant-lite first-lien term loan and a $150 million five-year asset-based revolver.
As committed, pricing on the first-lien term loan is expected at Libor plus 450 basis points with a 25 bps step-down based on leverage or ratings and a 0% Libor floor.
The first-lien term loan has 101 soft call protection for six months.
Pricing on the revolver is expected initially at Libor plus 150 bps, but can range from Libor plus 125 bps to 175 bps based on availability.
The company also has a commitment for $400 million of eight-year senior secured second-lien PIK toggle notes with an applicable margin of 8¾% per annum.
Call protection on the second-lien notes is 103 in year one, 102 in year two and 101 in year three.
GS Mezzanine Partners and Ares Management provided the second-lien commitment.
Under the agreement, BioScrip will issue new shares to Option Care’s shareholder, which is owned by investment funds affiliated with Madison Dearborn Partners LLC and Walgreens Boots Alliance Inc., in an all-stock transaction. Upon completion of the transaction, Madison Dearborn funds and Walgreens will beneficially own about 80% of the combined publicly traded company on a fully diluted basis, with current BioScrip shareholders holding the remainder.
Closing is expected in the second half of 2019, subject to customary conditions, including regulatory approvals and approval by BioScrip shareholders.
BioScrip and Option Care are providers of home and alternate treatment site infusion therapy services.
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