Wachovia Bank has launched syndication of $410 million worth of loans for dj Orthopedics to back the acquisition of Aircast by the company. The deal comprises a seven-year, $360 million term loan and a $50 million revolving credit facility, according to a filing with the Securities and Exchange Commission. The deal launched last week. Pricing could not be determined.
dj Orthopedics is acquiring Aircast, a maker of ankle braces based in New Jersey, to both enhance its current business and to expand into newer areas, according to a company release. The $290 million sale price is expected to be paid by the transaction's closing date with the exception of $25 million, which will be held back until June 30, 2007 or one year after the acquisition closes, whichever comes first. The deal to acquire Aircast was agreed upon on Feb. 27. Standard & Poor's assigned a BB- rating to the loan with a recovery rating of 2.
One investor saw this as a no-lose situation for dj Orthopedics. "It's been well know that they [dj] have been trying to expand the sports medicine side of their business," he said. He cited the Aircast development of a product called VenaFlow, which aids in patient recovery after surgery if issues arise with blood clotting. "On top of that they are acquiring a key rival. They make out very well," he added.
Based in San Diego, Calif., dj Orthopedics specializes in the development and manufacturing of rehabilitation products for orthopedic and spinal problems. A spokesman at dj Orthopedics declined to comment. Calls to Wachovia were not returned.