Inveresk Research Group selected Wachovia Securities to lead its new $150 million credit facility in a move to develop a relationship with more core U.S. banks because the company is now headquartered in the U.S., said Paul Cowan, cfo. He explained that the drug development services provider originally had The Royal Bank of Scotland (RBS) as its lead bank, as Inveresk was previously based in Scotland.
"Our relationships were originally with Scottish banks," he said. But the company went public in June of last year on NASDAQ and moved its headquarters to the U.S. in conjunction with the initial public offering. RBS led a $75 million facility for the company at the time of the IPO and the lender is still involved in the new deal, Cowan noted. An RBS official confirmed the new situation. Bear Stearns and UBS were lead underwriters in the IPO offering.
Inveresk had considered two proposals from prospective leads for the new credit, which helped back the company's $37.1 million acquisition of PharmaResearch Corp. Cowan said the bank that Wachovia competed against is still involved in the deal. He declined to name the bank. The new credit includes a three-year, $75 million revolver and a five-year, $75 million term loan. About $35 million of the revolver has been drawn.
Pricing on the new credit is in the LIBOR plus 11/4-2% range and is based on a grid tied to leverage, Cowan said, stating that total leverage is at about 1.75 times. There was an arrangement fee of 25 basis points for the deal, he added. Inveresk is now based in Cary, N.C., and the company's client base includes pharmaceutical companies in North America, Europe and Japan.