Brand Services gets commitment for $185 million credit facility for Aluma purchase

By Sara Rosenberg

New York, May 24 - Brand Services Inc. has received a commitment for $185 million in term loans to fund its acquisition of the operating assets of the Aluma Systems group of companies, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Credit Suisse First Boston and JPMorgan are joint lead arrangers and joint bookrunners on the deal, with CSFB the left lead. JPMorgan is also syndication agent.

CSFB committed 60% of the credit facility and JPMorgan 40%.

Brand Services is acquiring Aluma for C$255 million.

The facility consists of a $150 million senior secured term loan C due Jan. 15, 2012 and a $35 million second-lien term loan due July 15, 2012.

The term loan C will carry an interest rate of Libor plus 275 basis points if the tranche is rated in line or better and has the same outlook as the facilities under the existing credit agreement. In all other cases, the tranche will carry pricing of Libor plus 300 basis points.

The second-lien term loan will carry an interest rate of Libor plus 700 basis points and contains call protection of 102 in year one and 101 in year two, the filing said.

Amortization on the term loan C is 1% annually with a balloon payment due at maturity.

In addition, Brand Services will request an amendment to its existing credit facility to allow for the acquisition and the new term loan debt and to reduce the interest rate on the existing term loan B.

If the amendment is not approved, the company will seek replacement facilities. Instead of receiving a $150 million term loan C, Brand Services would essentially just get an upsized term loan C of $253 million. The company would also get one or more revolving and/or letter-of-credit facilities substantially on the terms provided for in its existing credit agreement that would be used to refinance the existing revolver/letter-of-credit facility debt and fund ongoing working capital requirements.

In addition to the new bank debt, JPMorgan Partners has provided a commitment of $30 million of equity financing to help fund the transaction as well.

Brand Services is a Chesterfield, Mo.-based provider of scaffolding services. Aluma is a Toronto-based provider of services to customers in the scaffolding and concrete construction industries.

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