Sedgwick CMS Holdings is expected to enter into a $340 million senior secured credit facility with Banc of America Securities. The financing will be used to help fund a $635 million acquisition of Sedgwick by Fidelity National Financial. B of A has been acting as the exclusive financial advisor to Sedgwick.
The deal comprises a $300 million senior secured term loan and a $40 million revolver, according to a Securities and Exchange Commission filing. Pricing on the deal could not be determined. Moody's Investors Service has rated the facility B1, citing the high leverage of the deal and a debt-to-EBITDA ratio of about five times.
The deal, which was agreed upon Dec. 27, is expected to be completed by Jan. 31. Located in Memphis, Tenn., Sedgwick CMS is the holding company for Sedgwick Claims Management, an insurance claims management company. Calls to B of A were not returned. A spokesman at Sedgwick declined to comment.