Covis plans $515 million of incremental bank debt for AMAG buy

By Sara Rosenberg

New York, Oct. 2 – Covis Group Sarl has received a commitment for $460 million of incremental senior secured term loans and $55 million of incremental revolving commitments to help fund its acquisition of AMAG Pharmaceuticals Inc., according to an 8-K recently filed with the Securities and Exchange Commission.

The debt commitment came from Covis’ current lenders and will be added to the existing $450 million term loan.

Other funds for the transaction will come from about $250 million in equity from Apollo Management, Covis’ sponsor, and cash on hand.

Under the agreement, AMAG is being purchased for $13.75 per share in cash, or about $498 million on a fully diluted basis and around $647 million on an enterprise basis, including debt obligations expected to be assumed or repaid net of cash.

Since the transaction will result in a change of control under AMAG’s indenture governing its 3.25% convertible senior unsecured notes due 2022, the holders of the notes will have the right to put at par the notes held by them for a period of 20 business days following closing.

Closing is expected in November, subject to Hart-Scott-Rodino approval and the conditions to the tender offer being satisfied.

Covis is a Luxembourg-based specialty pharmaceutical company. AMAG is a Waltham, Mass.-based commercial-stage biopharmaceutical company.

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