ST. PAUL, Minnesota--Patterson Companies, Inc. has announced it has closed on $525 million of long-term debt financing and the repurchase of approximately 6.3 million shares of its common stock from J.P. Morgan Chase Bank, N.A., under an accelerated share repurchase agreement.
Patterson issued $450 million of fixed-rate private notes with maturities of five, seven and 10 years. The company also secured a five-year, $75 million term loan at a floating rate of interest through a group of banks. Patterson used $250 million of the debt financing to repurchase shares under the ASR. The remaining proceeds from the debt issuances will be used to repay borrowings under the company's revolving credit agreement and for general corporate purposes. At closing, the weighted average interest rate of the debt was 5.1%.
As a result of the ASR transaction and open-market purchases made since late November 2007, Patterson has now repurchased approximately 18 million shares under its previously announced 25 million share repurchase authorization.
James W. Wiltz, president and chief executive officer, commented: "Through this capital restructuring, we leveraged the strength of our balance sheet to create what we believe will be long-term value for our shareholders."
The final number of shares to be delivered by J.P. Morgan under the ASR will depend on prevailing market conditions and is based on the difference between the initial purchase price per share and a volume weighted average price of the company's common stock, minus a set discount, during a period of up to six months. Under terms of the ASR, the company may receive additional shares of common stock from J.P. Morgan or may be required to deliver shares or cash to J.P. Morgan.
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