eResearchTechnology plans $224 million credit facility for buyout

By Sara Rosenberg

New York, May 22 - eResearchTechnology Inc. plans on getting a $224 million senior secured credit facility with its acquisition by Genstar Capital LLC, according to a DEFM14A recently filed with the Securities and Exchange Commission.

Credit Suisse Securities (USA) LLC and Jefferies Finance LLC are the joint lead arrangers and bookrunners on the deal.

The facility consists of a $50 million five-year revolver and a $174 million six-year term loan, with both tranches expected to be priced at Libor plus 550 basis points.

Covenants include interest coverage and leverage ratios.

Under the agreement, Genstar is buying the company for $8 per share in cash.

Other funds for the transaction will come from up to $110 million in equity and up to $97.4 million of 61/2-year subordinated notes that will be purchased by CDP-Genstar Mezzanine Opportunities LP.

It is contemplated that the principal amount of subordinated notes issued on the closing date will be $72.4 million, the filing said.

Pricing on the notes is expected at 13% per annum, with up to 2% available as payment-in-kind.

Closing is expected either this quarter or next quarter, subject to stockholder approval, which will be sought at a special meeting on June 22.

eResearchTechnology is a Philadelphia-based technology-driven provider of health outcomes research services and customizable medical devices.

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