Accretive Health, Inc. (OTCPK:ACHI) announced that it has entered into a definitive agreement for the private placement of 200,000 8.00% series A convertible preferred shares at $1,000 per share for gross proceeds of $200,000,000 on December 7, 2015. The transaction will include participation from new investors, Towerbrook Investors IV (Onshore), L.P., Towerbrook Investors Iv (892), L.P., TowerBrook Investors IV (OS), L.P., Towerbrook Investors IV Executive Fund, L.P., Towerbrook Investors IV Team Daybreak, L.P., funds managed by TowerBrook Capital Partners L.P. and Ascension Ventures. Glenn Miller represented TowerBrook Capital Partners L.P. in the transaction.

The convertible preferred shares carry fixed 8% dividend rate payable on January 1, April 1, July 1 and October 1 of each year until the seventh year from the closing date. The company will pay the dividend in kind through the issuance of additional shares of series A preferred stock till seven years. After the seventh year, the dividend will be paid in cash to the extent that the company has funds available.

Each preferred share will be convertible into 400 common shares of the company at fixed $2.50 per share, subject to weighted average anti-dilution adjustments. The convertible preferred shares will mature after seven years from the date of issuance. The company will also issue 60,000,000 warrants exercisable at $3.50 per share till the tenth anniversary from the date of closing in the transaction.

The company expects the transaction to complete in the first quarter of 2016. The transaction can be terminated any time prior to the closing by either party if the closing shall not have occurred by the 90th calendar day from the date of agreement, or by either in the event any governmental authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated thereby, or by the mutual written consent of the parties or by the company to take a superior proposal. The convertible preferred shares are redeemable at the option of the investor.

The company will pay funding fee of $4,000,000 and up to $10,000,000 to reimburse to cover the reasonable out of-pocket expenses to the investor.