EResearch Technology launches 1st-lien term loan for BioClinica acquisition

Lead arrangers Goldman Sachs and Jefferies have launched syndication of the incremental first-lien term loan financing that supports the acquisition of BioClinica by eResearchTechnology Inc., or ERT, according to sources. Commitments are due at noon ET on Jan. 12.

The company is issuing a $750 million fungible incremental first-lien term loan, of which $250 million is already pre-placed. The add-on is offered at 98.79-99 and will be fungible with the existing covenant-lite term loan due February 2027 that is priced at L+450, with a 1% Libor floor. There is no call protection.

At talk, the yield to maturity is roughly 5.82%-5.86%.

The issuer has also pre-placed a $50 million delayed-draw first-lien term loan as well as a $150 million incremental second-lien term loan in connection with this transaction.

S&P Global Ratings affirmed the corporate and first-lien issue ratings at B-, and the 3 recovery rating on the loan is unchanged. The agency notes that the $1.8 billion acquisition will also be funded with approximately $900 million of equity and a $50 million draw on the company’s existing second-lien delayed-draw term loan.

ERT's existing first-lien term loan totaled $1.155 billion after a recapitalization transaction in November 2019 that also included a privately placed $395 million second-lien term loan and a privately placed $100 million delayed-draw second-lien term loan.

BioClinica is a provider of clinical trial services and technology to contract research organizations and pharmaceutical companies. ERT will acquire the company from Cinven, which will remain a significant minority shareholder.

BioClinica's existing debt includes a covenant-lite first-lien term loan due October 2023 (L+425, 1% floor), which had $431.7 million outstanding as of Dec. 31, 2019, according to Ratings, and a $210 million second-lien term loan due October 2024 (L+825, 1% floor).

EResearchTechnology is a provider of software-enabled clinical research solutions that is backed by Nordic Capital and Astorg.