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    Archisman
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    This document outlines 7 questions for a Radnet submission due on March 15, 2023 regarding the acquisition of Radiologix. The questions address: 1) strengths and weaknesses of the acquisition and how they affect financing, 2) differences between bank debt and high-yield debt, 3) how to close funding gaps, 4) the pro forma balance sheet after merger financing, 5) competitiveness of GE's debt offer, 6) ability to stay within covenant terms, and 7) likelihood of default if performance matches history rather than projections.

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    Radnet Case questions

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    This document outlines 7 questions for a Radnet submission due on March 15, 2023 regarding the acquisition of Radiologix. The questions address: 1) strengths and weaknesses of the acquisition and how they affect financing, 2) differences between bank debt and high-yield debt, 3) how to close funding gaps, 4) the pro forma balance sheet after merger financing, 5) competitiveness of GE's debt offer, 6) ability to stay within covenant terms, and 7) likelihood of default if performance matches history rather than projections.

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    © All Rights Reserved
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    94 views1 page

    Radnet Case Questions

    Uploaded by

    Archisman
    This document outlines 7 questions for a Radnet submission due on March 15, 2023 regarding the acquisition of Radiologix. The questions address: 1) strengths and weaknesses of the acquisition and how they affect financing, 2) differences between bank debt and high-yield debt, 3) how to close funding gaps, 4) the pro forma balance sheet after merger financing, 5) competitiveness of GE's debt offer, 6) ability to stay within covenant terms, and 7) likelihood of default if performance matches history rather than projections.

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    © All Rights Reserved
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    Radnet Submission

    Due date March 15, 2023 (8:00 AM)


    1. What are the main strengths and weaknesses of the Radiologix acquisition? How do these
    perceptions affect the financing of the acquisition?
    2. RadNet could conceivably utilize both bank debt and high-yield (HY) debt. What are some of
    the distinctions between bank debt and HY debt?
    3. If the first-lien debt (FLD) is insufficient to fund the acquisition, how should the firm close the
    funding gap with second-lien debt (SLD) or HY debt?
    4. Assume that the $360 million in acquisition debt financing is composed of $225 million in FLD
    and $135 million in SLD. What will the pro forma balance sheet for the combined firms look
    like after the completion of the merger financing?
    5. Based on the comparables in Exhibit 10, how competitive is GE's offer of $225 million in FLD
    at L+350 and $135 million in SLD at L+750?
    6. If RadNet uses $225 million in FLD at L+350 and $135 million in SLD at L+750, based on the
    projections in Exhibit 11, can it do so and stay within the FLD and SL covenants?
    7. If the merged firm's performance falls closer to its historical performance (2% revenue growth
    and 18% margins), how high is the likelihood of default?

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