Article/Intelligence
Oak Hill Advisors Leads $565M Debt Package to Back GTCR’s Purchase of Surmodics
Reporting: Paola Aurisicchio
A group of direct lenders led by Oak Hill Advisors has provided a $565 million debt package to back private equity firm GTCR’s acquisition of medical device and in-vitro diagnostic technologies company Surmodics, according to two sources.
The debt package consists of a $350 million term loan and a $100 million of HoldCo notes. It also includes a $75 million delayed-draw term loan and a $40 million revolver, according to one source. Pricing on the term loan is SOFR+500 bps.
Direct lenders Oak Hill Advisors, Bank of Montreal, Antares Capital, Brinley Partners and Northwestern Mutual Investment Management have committed $450 million debt financing at closing, according to an SEC filing on May 29.
Proceeds will be used to back the acquisition and refinance certain existing debt of the company.
Surmodics has entered into a definitive agreement to be acquired by private equity firm GTCR for a total equity valuation of $627 million, according to the announcement on May 29.
The company’s shareholders will receive $43 per share, or a 41.1% premium on the company’s 30-trading day volume-weighted average closing price through May 28.
The transaction, which is expected to close in the second half of the year, will take Surmodics private after 26 years. The company has been trading on Nasdaq since its initial public offering in 1998.
Minnesota-based Surmodics reported $32 million of revenue for its second quarter ended March 31, an increase of 18% year over year, according to its second-quarter 2024 financial results.
GTCR, Oak Hill Advisors and Antares Capital declined to comment.
Brinley Partners and Northwestern Mutual Investment Management did not respond when reached for comment.
Jefferies served as financial advisor to Surmodics, and Faegre Drinker Biddle & Reath provided legal counsel in the transaction. Kirkland & Ellis and Cleary Gottlieb Steen & Hamilton provided legal counsel and Goldman Sachs served as financial advisor to GTCR. Latham & Watkins represented Oak Hill Advisors.