J.P. Morgan and Wachovia Securities pulled the repricing of Empi's "B" loan after The Carlyle Group sold the company to Encore Medical Corp. for about $360 million. Carlyle was pursuing a sale or an initial public offering of Empi and chose the sale in the end, a Carlyle spokesman said.
Encore will not assume Empi's debt, but the acquisition will be financed with debt led by Bank of America, according to Davis Henley, v.p. business development for Encore. "We've had a relationship with B of A that goes back for years and they just do a great job for us," he said. Half of the debt will be senior secured. It will be primarily term loan and a small portion will be a revolver, Henley noted. The credit will be priced at LIBOR plus 2%, he added. Encore anticipates doing a bond offering for the other half of the debt. The transaction is expected to close in October. Empi officials and a B of A banker did not return calls.
Empi was in the market in November with a dividend recap led by J.P. Morgan and Wachovia. The credit comprised a $165 million "B" loan and $25 million revolver (LMW, 11/17). The reprice would have cut the spread on the $165 million "B" loan to LIBOR plus 2 1/4% from LIBOR plus 3%. A J.P. Morgan spokesman declined comment and Wachovia bankers could not be reached for comment.