CORRECTED-RLPC: Patheon readies $1.35B acq. loan for DSM Pharma combination

Wed Nov 20, 2013 12:45pm EST
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(Corrects denomination of term loan B)

By Leela Parker Deo

NEW YORK Nov 20 (Reuters) - Toronto-based drug maker Patheon Inc will launch in January $1.35 billion in acquisition financing to fund a transaction that will combine the company with the pharmaceuticals unit of Dutch food and chemicals group Royal DSM, sources told Thomson Reuters LPC Wednesday.

The acquisition financing will include a $200 million, five-year revolving credit facility and a $1.15 billion, seven-year term loan B.

UBS is lead left on the deal, joined on the right by JP Morgan, Jefferies, KeyBank and Morgan Stanley as joint bookrunners.

A bank meeting is set for the first week of January. The loan will have a 1 percent Libor floor. The TLB will amortize at 1 percent annually and will have 101 soft call protection. Further price guidance is to be determined.

New York-based private equity firm JLL Partners, which already owns a controlling stake in Patheon, will acquire a majority stake in DSM Pharmaceutical Products and combine the businesses to form a new joint venture majority-owned by JLL, the companies said on Tuesday.

The venture, which will create a global contract development and manufacturing organization, will be 51 percent owned by JLL and 49 percent by DSM. The company is expected to have combined sales of approximately $2 billion, they said.

JLL will contribute $489 million in cash to the new venture. DSM will contribute the DPP unit and receive a seller note of $200 million.

UBS declined to comment. A JLL spokesperson could not be reached for comment by press time. (Editing By Jon Methven)