WBA makes financing move for Rite Aid acquisition

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Walgreens Boots Alliance completes $12.8 billion in term loan facilities

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DEERFIELD, Ill. — Walgreens Boots Alliance (WBA) Inc. has completed $12.8 billion in term loan facilities as part of the financing for its $17.2 billion deal to acquire Rite Aid Corp.

WBA said Monday that the transactions include the placement of $5 billion of term loan facilities — split between two tranches of $2.5 billion each, with three- and five-year maturities — and a $7.8 billion term loan bridge facility.

The facilities replace the WBA’s previously reported $12.8 billion bridge facility commitment. The company noted that drawing under the facilities is subject to the closing of the acquisition.

“The term loan facilities constitute a key milestone in securing permanent financing for the proposed acquisition of Rite Aid,” George Fairweather, executive vice president and global chief financial officer of WBA, said in a statement. “We are very pleased with the high level of interest and support from our banking partners, which resulted in the oversubscription of the transaction. The $5 billion pre-payable term facilities provide us with diversification of funding sources and the flexibility to reduce leverage over time.”

WBA announced the Rite Aid acquisition on Oct. 27. Under the agreement, WBA plans to buy Rite Aid for more than $9 billion in cash, or $9 per share, and assume more than $7 billion in net debt. WBA said at the time that it expects to finance the deal with existing cash, assumption of Rite Aid debt and the issuance of new debt.

Last week, Rite Aid said that on Feb. 4 it plans to hold a special meeting of stockholders to vote on the proposed agreement. The boards of both companies have approved the transaction, which is expected to be finalized by the second half of calendar 2016, pending the Rite Aid shareholder vote, regulatory approvals and other customary closing conditions.

Earlier this month, the Federal Trade Commission made a second request for information from WBA and Rite Aid regarding the proposed acquisition. The additional FTC request for information, made under the Hart-Scott-Rodino Antitrust Improvements Act, extends the waiting period until 30 days after the companies have substantially complied with the request, unless the companies extend the period or it’s terminated sooner by the commission.



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