AmerisourceBergen secures $2.15 billion bridge loan to fund $2.5 billion tender offer for MWI

By Lisa Kerner

Charlotte, N.C., Jan. 12 – AmerisourceBergen’s $2.5 billion acquisition of MWI Veterinary Supply, Inc. will be funded through cash and debt financing, according to AmerisourceBergen’s senior vice president and chief financial officer Tim Guttman.

“Our current thinking is that we will use cash of $500 million,” Guttman said during a conference call on Monday.

“The remaining $2 billion will be split evenly and funded through a five-year term loan and senior notes,” the CFO said. “We have executed a bridge facility, and it’s in place until we have the permanent financing.”

Bridge loan details

AmerisourceBergen has a 364-day senior unsecured bridge term loan credit facility for up to $2.15 billion, according to a form 8-K filed with the Securities and Exchange Commission.

The facility will be available in a single draw upon closing, which is expected to occur during the March quarter of 2015.

Pricing will be Libor plus 75 basis points to Libor plus 125 bps for the first 89 days, depending on the company’s credit rating, stepping up by 25 bps for days 90 through 179, by a further 25 bps for days 180 through 269 and an additional 25 bps for day 270 onwards.

There will also be a duration fee of 50 bps payable after 90 days, 75 bps payable after 180 days and 100 bps payable after 270 days.

Bank of America, NA will act as sole administrative agent for the lenders. Merrill Lynch, Pierce, Fenner & Smith Inc. will act as sole lead arranger and sole bookrunner for the bridge facility.

Capital deployment

Guttman assumed a blended interest rate of about 2.8% on the company’s financing.

He said AmerisourceBergen will reduce its share repurchases in 2015 to redeploy capital to fund the acquisition.

It is AmerisourceBergen’s intent to delever and pay down the term loan “faster than scheduled,” he noted. Additionally, the company is committed to using capital for a 2016 warrant “that is around the corner” and for a special share repurchase to offset dilution, Guttman said.

AmerisourceBergen is a pharmaceutical services company based in Chesterbrook, Pa.

MWI Veterinary Supply is a distributor of animal health products to veterinarians based in Boise, Idaho.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.