By Michelle Sierra
NEW YORK Feb 19 Generic drugmaker Actavis Plc
has begun discussions with its core bank group to
syndicate the $7 billion financing slated to back its
acquisition of Forest Laboratories Inc, sources told Thomson
Bank of America Merrill Lynch and Mizuho Bank are leading
Bank of America Merrill Lynch and Mizuho declined to
comment. Actavis did not return calls for comment.
The $7 billion financing is split between a $1.75 billion,
five-year term loan, a $3 billion cash bridge loan and a $2.25
Pricing on the term loan opens at LIB+137.5.
The structure of the deal could change as discussions are
ongoing, sources added.
The term loan will be additionally syndicated via a retail
round to take place in the near term.
Bankers starved for investment grade new money opportunities
are welcoming with open arms the loan, which backs the first
investment grade acquisition of size this year.
Activity in the investment grade space in 2014 has been
lukewarm, with volumes for January coming short compared with
the previous three years. Bankers were betting on a pick-up in
M&A activity to boost numbers for the quarter.
According to LPC data, volumes for January were $15.3
billion, compared with $17.8 billion and $21.2 billion in 2013
and 2012, respectively.
Actavis said on Tuesday it is acquiring Forest Laboratories
for a combination of cash and equity valued at approximately $25
billion, or $89.48 per Forest share. If successfully completed,
the transaction will bring together two of the world's
fastest-growing specialty pharmaceutical companies, with
combined annual revenues of over $15 billion anticipated for
2015, according to a company press release.