Amscan $500 million-plus credit facility to launch Dec. 1

By Sara Rosenberg

New York, Nov. 22 - Amscan Holdings Inc. is scheduled to hold a bank meeting on Dec. 1 to launch its proposed credit facility that will likely be sized in the $500 million plus area, according to a market source.

Goldman Sachs and Bank of America are the lead banks on the deal.

Proceeds from the credit facility will be used to help back the leveraged buyout of Party City Corp. by Berkshire Partners LLC and Weston Presidio, which already own Amscan.

Currently, Amscan is considering structuring the credit facility as a $505 million deal consisting of a $420 million seven-year senior secured term loan and an $85 million six-year senior secured revolver, according to an 8-K filed with the Securities and Exchange Commission Tuesday.

The company is also currently considering a $132 million equity contribution from two sponsors and management.

However, this currently contemplated financing package differs from the one outlined in commitment letters that were filed with the SEC in early October.

According to the original plan, the credit facility was going to be sized at $540 million, consisting of a $400 million seven-year first-lien term loan, a $75 million six-year revolver and a $65 million eight-year second-lien term loan.

Equity contributions under the original plan were expected to be in an amount of at least $100 million.

Under the terms of the LBO agreement, Party City shareholders will receive $17.50 per share in cash for each share for total consideration of about $360 million.

The acquisition, which is expected to close by year-end, is subject to financing, shareholder approval and other customary conditions, including regulatory approvals.

Proceeds from the credit facility and the equity contribution will be used to finance the merger, repay or refinance existing debt, pay merger fees and expenses and for general corporate purposes.

Party City is a Rockaway, N.J., party goods chain. Amscan is an Elmsford, N.Y., designer, manufacturer and distributor of decorative party goods.

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