Medquist secures $310M in financing deal
Clinical documentation company MedQuist has entered into a $310 million financing agreement consisting of a $225 million senior secured credit facility and the issuance of $85 million of senior subordinated notes.
The $225 million senior secured credit facility is being led by GE Capital as administrative agent, and SunTrust Bank as syndication agent.
The credit facility will consist of a $200 million term loan and a $25 million revolving credit facility, the Mount Laurel, N.J.-based company stated. By 2016, 13 percent of the senior subordinated notes are to be issued following a note purchase agreement with BlackRock Kelso Capital, PennantPark Investment, Citibank and THL Credit in an aggregate principal amount of $85 million.
A portion of the interest is payable in the form of additional senior subordinated notes, at an interest rate of 12 percent in cash and 2 percent in the form of additional notes, as an option to MedQuist. The company’s majority shareholder, CBay and its parent company, CBaySystems Holdings Limited, will guarantee MedQuist’s obligations under the senior secured credit facility and the senior subordinated notes, the company revealed.
The financing will be used towards debt incurred by MedQuist in connection with its April 2010 acquisition of the assets of Spheris and to pay a one-time special cash dividend of $4.70 per share to all MedQuist shareholders of record as of Oct. 11. Closing of the financing and the payment of the special dividend are slated to occur on or about Oct. 15, said the company.
The $225 million senior secured credit facility is being led by GE Capital as administrative agent, and SunTrust Bank as syndication agent.
The credit facility will consist of a $200 million term loan and a $25 million revolving credit facility, the Mount Laurel, N.J.-based company stated. By 2016, 13 percent of the senior subordinated notes are to be issued following a note purchase agreement with BlackRock Kelso Capital, PennantPark Investment, Citibank and THL Credit in an aggregate principal amount of $85 million.
A portion of the interest is payable in the form of additional senior subordinated notes, at an interest rate of 12 percent in cash and 2 percent in the form of additional notes, as an option to MedQuist. The company’s majority shareholder, CBay and its parent company, CBaySystems Holdings Limited, will guarantee MedQuist’s obligations under the senior secured credit facility and the senior subordinated notes, the company revealed.
The financing will be used towards debt incurred by MedQuist in connection with its April 2010 acquisition of the assets of Spheris and to pay a one-time special cash dividend of $4.70 per share to all MedQuist shareholders of record as of Oct. 11. Closing of the financing and the payment of the special dividend are slated to occur on or about Oct. 15, said the company.