Federal Street Acquisition Corp., a special purpose acquisition company backed by private equity firm Thomas H. Lee Partners LP, is merging with Universal Hospital Services, Inc., a privately held medical equipment management company based in Minneapolis.

The merged entity will be known as Agiliti Inc. and will have an initial enterprise value of about $1.74 billion. It will apply to list its common stock and warrants on the Nasdaq Stock Market under the tickers AGTI and AGTIW, respectively.

Irving Place Capital Management LP, Universal Hospital Services' private equity sponsor and majority owner, will retain a minority equity stake in the combined company.

Along with the $460 million in cash raised from its IPO in July 2017, Federal Street has secured commitments for a $250 million common stock private placement from institutional investors at a price of $10 per share.

Federal Street has also arranged a $660 million term loan for Agiliti that will be used to repay Universal Hospital Services' existing debt. The lenders have also committed to providing a $150 million revolving credit facility to the newly formed company, which will be 30% owned by Thomas H. Lee Partners; 22% by Irving Place Capital and other former stockholders of Universal Hospital Services; and 43% by existing Federal Street public stockholders.

The boards of Universal Hospital Services and Federal Street have unanimously approved the proposed transaction, completion of which is expected in the fourth quarter. The deal is subject to closing conditions, including regulatory approval and Federal Street shareholder approval.

Upon deal completion, Tom Leonard will continue as CEO of the combined company. Leonard is the CEO of Universal Hospital Services. Leonard will continue to lead the merged entity with his current management team, including CFO Jim Pekarek and President Kevin Ketzel.

J.P. Morgan Securities LLC served as financial adviser and Weil Gotshal & Manges LLP acted as legal counsel to Universal Hospital Services. Citigroup Global Markets Inc. served as financial adviser, capital markets adviser and placement agent, and Kirkland & Ellis LLP acted as legal counsel to Federal Street.

Bank of America Merrill Lynch acted as capital markets adviser and placement agent in connection with the private placement. Debt financing will be provided by JPMorgan Chase Bank NA, Citigroup Global Markets Inc. and KeyBanc Capital Markets Inc.