Catalyst opts for $100 million revolver add-on, stock sale instead of $700 million facility

By Sara Rosenberg

New York, April 4 - Catalyst Health Solutions Inc. has decided not to get a $700 million senior secured credit facility for its purchase of Walgreens Health Initiatives Inc. and instead will do a $100 million revolver add-on and a stock sale, according to a 424B5 filed with the Securities and Exchange Commission on Monday.

The company said it is currently in the process of amending its existing revolver to increase the size to $300 million from $200 million.

As for the stock sale, the company is offering 4.5 million shares of common stock and expects to generate net proceeds of $243 million from the transaction.

The stock net proceeds, plus $172 million in borrowing sunder the amended revolver and $125 million of available cash, will be enough to fund the $525 million acquisition of Walgreens Health Initiatives, a pharmacy benefit management company, from Walgreen Co.

Catalyst's $700 million credit facility that was previously being contemplated consisted of a $200 million revolver and a $500 million term loan and was being led by Goldman Sachs & Co., Citigroup Global Markets Inc., SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC.

Closing on the acquisition 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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