Apollo Medical Holdings closed a new $290 million credit facility consisting of a $190 million senior secured term loan and a $100 million revolving credit facility, among other facilities, that will mature in 2024.
The initial pricing of the term loan is LIBOR plus 2.50%.
SunTrust Robinson Humphrey served as left lead arranger, and SunTrust Bank is acting as administrative agent for the facility. Preferred Bank, J.P. Morgan Chase, MUFG Union Bank, and Royal Bank of Canada served as joint lead arrangers and joint bookrunners for the syndicate.
ApolloMed has also completed the series of transactions with two of its affiliates, AP-AMH Medical, a California professional medical corporation, and Allied Physicians of California, a Professional Medical Corporation, a California professional medical corporation d.b.a. Allied Pacific of California IPA.
“We are extremely excited to announce this new credit facility which enables us to complete our previously announced transaction with APC and provides an initial $40 million of availability on our revolving credit facility as the potential dry powder to pursue future acquisitions of additional independent practice associations by leveraging our strong balance sheet to create additional shareholder value,” said Kenneth Sim, M.D., executive chairman of ApolloMed.
Initial funding from the new loan facility allows the company to refinance its current outstanding debt and allows the company to complete the series of agreements with two of its affiliates, AP-AMH, and APC. The transactions, all of which are interrelated and closed concurrently with the closing of the new credit facility, include the following:
- The company is lending AP-AMH $545 million pursuant to a 10-year secured loan agreement. The loan will bear interest at a rate of 10% per annum simple interest.
- AP-AMH is purchasing $545 million of Series A Preferred Stock to be issued by APC to AP-AMH. Under the terms of the Series A Preferred Stock, AP-AMH is entitled to receive preferential, cumulative dividends that accrue on a daily basis and that are equal to the sum of (A) APC’s net income from healthcare services, plus (B) any dividends received by APC from certain of APC’s affiliated entities, less (C) any retained amounts.
- APC is purchasing $300 million of the company’s common stock
- The company is licensing certain of its trademarks to AP-AMH for a fee equal to a percentage of the aggregate gross revenues of AP-AMH. The license fee is payable out of any Series A Preferred Stock dividends received by AP-AMH from APC._x000D_
Note About Consolidated Entities
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ApolloMed is a physician-centric integrated population health management company, which, together with its subsidiaries, including a Next Generation Accountable Care Organization and its affiliated IPAs and management services organizations, are working to provide coordinated, outcomes-based high-quality medical care for patients.
