J.P. Morgan and Wachovia Securities are in the market with a $175 million refinancing for The Carlyle Group's portfolio company Empi Corp. that will provide the shareholders and senior management with a $47 million dividend. In addition to the dividend, the new financing will repay $76 million of existing bank debt and redeem a $27.5 million note. Empi, is a developer and manufacturer of noninvasive biomedical devices, and was taken private by Carlyle in 1999. Since then, revenues and EBITDA have increased significantly, improving both leverage and coverage ratios, according to Moody's Investors Service.
The new debt is split into a $25 million revolver, a $25 million "A" loan and a $125 million "B" loan, according to a banker, and has been rated Ba3. A source said the "B" is priced at LIBOR plus 31/4% and the pro rata at LIBOR plus 23/4%. He said the deal, which was launched last week, is expected to move quickly. Lehman Brothers led the original facility that took the company private, a source said, but the reasons for the switch could not be confirmed. A spokeswoman for the Carlyle Group and a J.P. Morgan spokesman declined comment. A Wachovia banker did not return calls. Patrick Spangler, executive v.p. and cfo, did not return calls.