AaiPharma, a science-based pharmaceutical company, is tapping the bank debt market to back the acquisition of a portfolio of pain management products from Elan Corp. for $100 million. Bank of America, CIBC World Markets and Wachovia Securities are launching the bank meeting tomorrow, said a banker. The purchase requires aaipharma to pay $51.6 million in cash and take of $51.4 million of Elan's debt. Last year, aaiPharma bought the pain drug Darvocet from Eli Lilly for $211.4 million, using bank debt.
The total bank debt being syndicated is $260 million, said a banker. This is split between a $100 million, five-year revolver that is priced at LIBOR plus 3 1/2%, and a six year $160 million "B" loan. Pricing on the institutional tranche is LIBOR plus 3 3/4%. The credit is rated BB-/B2. The company's leverage ratio reportedly is approximately 3 times. A spokeswoman for the company did not return calls and bankers at the leads could not be reached by press time.