Catalyst Health Solutions plans $700 million facility for WHI purchase

By Sara Rosenberg

New York, March 9 - Catalyst Health Solutions Inc. has received a commitment for a new $700 million credit facility to fund its acquisition of Walgreens Health Initiatives Inc. (WHI), company officials said in a conference call on Wednesday.

Goldman Sachs, Citigroup, SunTrust and Wells Fargo are the lead banks on the deal.

The facility consists of a $200 million revolver and a $500 million term loan.

Pricing on the term loan can range from Libor plus 200 basis points to 250 bps based on leverage, officials said.

Based on market conditions and other considerations, the company may pursue alternative financing for the acquisition, including an equity offering in combination with its existing revolver and available cash.

"[We] will be exploring all alternatives from a financing perspective," officials added in the call.

Under the agreement, Catalyst is buying Walgreens Health Initiatives, a pharmacy benefit management company, from Walgreen Co. for $525 million in cash.

Closing on the transaction is expected to take place in the first half of this year, subject to customary conditions and the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Catalyst is a Rockville, Md.-based pharmacy benefit management company.

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