Misys, the banking and healthcare software group, has refinanced the debt package it agreed in the wake of the collapse of Lehman Brothers last year.
The $210m (£131m) three-year deal replaces a $325m package to secure the acquisition of Allscripts, the US clinical software record provider, which was in its final stages last September. Lehman had committed to providing funding for the bid when it was first launched in March 2008.
Mike Lawrie, chief executive, has made Allscripts-Misys central to his planned three- to five-year turnround, begun in 2006. The deal transforms the UK group, exposing more than half of revenues to the fragmented, but potentially lucrative, US healthcare market.
The new facility comprises an £80m term loan and a £130m revolving credit facility at a margin range of 2.5-3.5 percentage points above Euribor, the European interbank rate. It was provided by Barclays, HSBC, Royal Bank of Scotland, Yorkshire Bank and KFW-IPEX Bank.
Lehman’s failure led to an emergency dash from the US home of Mr Lawrie to London. There was some initial confusion, with management even unsure whether the financing for the deal lay in Lehman’s US or European operations.
But within two weeks Misys agreed a new $325m deal for at least 18 months, with $150m in financing from a consortium of banks that Lehman had planned to sell the debt on to.
The remaining $175m was financed by ValueAct Capital Partners, the San Francisco-based private equity firm where Mr Lawrie previously worked, which holds a 25 per cent stake in Misys.
Misys said the new facility would repay the $150m bank revolving credit facility and $190m ValueAct loan facility. The balance will be paid by Misys’s own cash reserves. It has set itself a target of repaying one-third of its £200m net debt in the second half of the year.
Misys paid interest at 6.5 percentage points over Libor, with further rises from January, under the bridging agreement with ValueAct. Shares in Misys rose 3½p to close at 159½p.