A consortium of direct lenders, including Ares Management Corp and HPS Investment Partners, is arranging a $3bn credit facility to support Carlyle Group Inc’s potential acquisition of Baxter International Inc’s Vantive kidney-care division, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as confirming that the the financing package consists of a $2.5bn unitranche loan and a $450m revolver. Oaktree Capital Management is also involved in providing part of the financing, while there is also a provision in the agreement allowing smaller lenders to take positions post-signing.
While no acquisition agreement has been finalised and a deal remains uncertain, the facility’s interest rate has been agreed at five percentage points above the Secured Overnight Financing Rate (SOFR). The initial borrowings would position Vantive’s leverage at 4.2 times its pro-forma earnings.
The Wall Street Journal recently reported that Carlyle is in advanced talks to acquire Vantive for over $4bn, including debt. Baxter initiated the process to spin off its kidney-care business, which generated $4.5bn in revenue in 2023, early last year.
Ares and HPS have collaborated on previous healthcare carveouts including a the provision of $4.8bn earlier this year, in partnership with other lenders, for the acquisition of pharmaceuticals manufacturer Catalent Inc. Private credit lenders led by Ares also agreed last year to provide $1.95bn for the buyout of Baxter’s contract medical manufacturing unit.
