Jazz Pharmaceuticals Gets $500 Million Term Loan for Gentium BuyKrista Giovacco
Jazz Pharmaceuticals Plc, a manufacturer of products for treating narcolepsy, cancer, pain and psychosis, obtained a commitment for a $500 million loan to back its purchase of Gentium SpA.
Barclays Plc is providing the loan, which along with cash and a revolving line of credit will support the acquisition, the Dublin, Ireland-based company said in a statement today distributed by PR Newswire. The transaction, which is valued at about $1 billion, is expected to close in the first quarter.
Jazz Pharmaceuticals has a $555.8 million term loan that expires in June 2018 and pays interest at 2.75 percentage points more than the London interbank offered rate with a 0.75 percent minimum on the lending benchmark, according to data compiled by Bloomberg. The company’s $200 million credit line, which matures in June 2017, was undrawn as of Sept. 30, the data show.
Interest on the add-on loan is expected in the range of 3 percent to 3.5 percent, the company said in a regulatory filing. After closing of the transaction, adjusted earnings before interest, taxes, depreciation and amortization is expected to be less than 2.5 times.
In a revolving line of credit, money may be borrowed again once it’s repaid; in a term loan it can’t.