INC Research expects to get $2.6 billion term B with inVentiv merger

By Sara Rosenberg

New York, May 10 – INC Research Holdings Inc. plans to get a new $2.6 billion term loan B to refinance existing debt in connection with its all-stock merger with inVentiv Health Inc., according to a company presentation.

Credit Suisse Securities (USA) LLC is the lead bank on the deal.

The term loan B would be done on a best-efforts basis. If the loan is not completed, inVentiv would use the proceeds from a committed $550 million incremental term loan under its existing credit facility to prepay INC Research’s total debt, and inVentiv’s $1.7 billion term loan would remain outstanding and its unsecured notes would not be redeemed in part.

The company would also seek a roughly $500 million senior secured cash flow revolver as part of the best-efforts refinancing transaction, according to an 8-K filed with the Securities and Exchange Commission.

Upon closing of the merger, INC Research shareholders are expected to own about 53% and inVentiv shareholders are expected to own about 47% of the combined company on a fully diluted basis. Advent International and Thomas H. Lee Partners, the current equal equity owners of inVentiv, will remain investors in the combined company.

Based on the closing price of INC Research common stock on Tuesday, the transaction values inVentiv at an enterprise value of around $4.6 billion, and the combined company at an enterprise value of about $7.4 billion.

Closing is expected in the second half of this year, subject to approval by INC Research shareholders, the satisfaction of regulatory requirements and other customary conditions.

Net leverage at closing is expected to be about 4 times. The company intends to bring that down to under 3 times within 18 months to two years of closing.

INC Research is a Raleigh, N.C.-based contract research organization providing the full range of Phase I to Phase IV clinical development services for the biopharmaceutical and medical device industries. inVentiv is a Burlington, Mass.-based contract research organization and contract commercial organization.

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