Psychiatric Solutions sets Wednesday launch for $225 million term B add-on

By Sara Rosenberg

New York, May 8 - Psychiatric Solutions Inc. has scheduled a bank meeting for Wednesday to launch its proposed $225 million term loan B add-on, according to a market source.

Citigroup and Merrill Lynch are the lead banks on the deal.

The add-on is being talked at Libor plus 175 basis points, the source said.

Proceeds from the add-on, along with $50 million drawn under the company's existing revolver and $200 million of additional senior subordinated debt, will be used to help fund the acquisition of Horizon Health Corp.

Psychiatric is buying Horizon for $426 million, consisting of cash of $20.00 per share totaling $321 million and the assumption of Horizon's outstanding debt.

At close, senior secured debt to pro forma adjusted LTM EBITDA will be 3.0 times, total debt to pro forma adjusted LTM EBITDA will be 4.6 times and total debt to total capitalization will be 64.4%.

Psychiatric Solutions is a Franklin, Tenn., provider of inpatient behavioral health care services. Horizon Health is a Lewisville, Texas, provider of various health care services.

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