Wachovia Securities is in the market with a $125 million credit for dj Orthopedics, a designer, manufacturer, and marketer of products and services for the orthopedic sports medicine market. The new deal will be used to support the company's $93 million acquisition of the bone growth stimulation business from OrthoLogic Corp, explained Mark Francois, director of investor relations at dj Orthopedics.
The new credit will comprise a $100 million "B" loan and a $25 million revolver. Francois declined to comment on the spread. Bankers said Wachovia pitched the "B" piece to the market at LIBOR plus 33/4%, but that has since been flexed down. Price talk on the five-year revolver is LIBOR plus 31/4%. Final pricing could not be determined by press time and Wachovia bankers did not return calls.
Wachovia was one of the underwriters for dj Orthopedic's initial public offering, which was completed in November 2001. Shortly after, the company's business ran into trouble. Since then dj Orthopedic has turned operations around due to a performance improvement program, which included cost cutting and resource refocusing. The company is now positioned for growth particularly in the regeneration business, said Francois. The purchase requires approval from OrthoLogic's shareholders, who are set to vote on the transaction on Nov. 26.
Previously, the company's bank debt included a $39 million term loan, which was paid down to $15.5 million, and a $25 million revolver that was never tapped. That deal was priced at LIBOR plus 21/2% across both tranches. The new bank deal also refinances existing debt.