DURHAM, N.C. – Quintiles Transnational Corp., a biopharmaceutical-services company, is seeking a $175 million loan to pay a dividend to shareholders, according to a person with knowledge of the transaction.
Quintiles, controlled by Bain Capital Partners LLC, TPG Capital, 3i Group Plc and Tamasek Holdings Pte, will also use $75 million of cash for the payout, said the person, who asked not to be identified because the deal is private.
The debt will pay interest at 3.25 percentage points to 3.5 percentage points more than the London interbank offered rate, said the person. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.
Quintiles is proposing to sell the loan at 99 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.
JPMorgan Chase & Co. is arranging the financing for the Durham-based company, which also includes an incremental $75 million revolving line of credit, the person said.
The financing, will bring leverage, or debt to earnings before interest, taxes, depreciation and amortization, back up to 4.6 times, where it was in February, said the person.
“Attractive conditions in the financial markets should enable us to obtain this financing on favorable terms.” Phil Bridges, director of corporate communications at Quintiles, said in an e-mailed statement. “Quintiles has continued to maintain prudent debt levels for the company with a leverage ratio which is in line with our competitors, both public and private.”
The current owners along with management acquired the company in 2007 from One Equity Partners LLC, JPMorgan’s private-equity unit, according to data compiled by Bloomberg.
In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.
