Kinetic Concepts Inc. (NYSE:KCI) changed the terms of a portion of the financing backing its $6.3 billion leveraged buyout by private equity firm Apax Partners, a pair of anonymous sources told Bloomberg BusinessWeek.
Apax and a pair of Canadian pension funds agreed July 12 to buy KCI for $68.50 per share. The London-based PE firm and its partners planned to finance the buyout with about $5 billion in debt, backed by lenders Bank of America Corp., Credit Suisse Group AG and Morgan Stanley.
The transaction was to have included a $2.6 billion term loan and a $200 million revolving credit line, plus a $1.25 billion bridge loan and $900 million in senior unsecured bonds.
Sign up to get our free newsletters delivered right to your inbox
But after a pow-wow yesterday morning, the term loan was cut to $2.2 billion and the secured notes boosted by a commensurate amount, to $1.65 billion, according to "two people with knowledge of the deal." KCI would in turn sell the loan at about 96 cents on the dollar, aiming to boost investors’ returns but cutting into its own proceeds, the magazine reported.
The deal is expected to close Nov. 4, according to the un-named sources.
