Del Taco Holdings wraps amendment for purchase by Levy Acquisition

By Sara Rosenberg

New York, March 26 – Del Taco Holdings Inc. wrapped up last week an amendment to its credit facility that supports its acquisition by Levy Acquisition Corp., according to a market source.

Lenders were paid a 5 basis point amendment fee, the source added.

GE Capital is the agent on the bank debt.

Under the agreement, restaurateur Larry Levy’s family and other new investors will make a private investment of $120 million in the equity of Del Taco based on a $500 million enterprise value, excluding transaction costs.

Proceeds from a $25 million add-on term loan and about $10 million in revolving credit facility borrowings will be used with the equity infusion to retire Del Taco’s existing $111 million 13% PIK senior subordinated notes due 2019 and 2022, to acquire about $29 million of the existing equity in Del Taco from its current stockholders and to pay transaction expenses.

In a second step of the acquisition, a subsidiary of Levy Acquisition will merge into Del Taco and Levy will pay a per-share price in cash to certain Del Taco stockholders and in stock to all Del Taco stockholders reflecting the $500 million valuation.

Concurrent with the second phase of the acquisition, two private investors agreed to purchase $35 million of unregistered Levy Acquisition stock for $10.00 per share, which implies an enterprise value of $558 million for the combined business.

After redemptions by Levy Acquisition’s public stockholders, the balance of the roughly $150 million in cash held in Levy’s trust account together with the $35 million in private placement proceeds will be used to pay up to $95 million to original stockholders of Del Taco as merger consideration and to pay transaction expenses.

Any additional cash in the trust account will remain on the combined company’s balance sheet and may be used to further reduce senior debt.

The second step of the acquisition is expected to close in June, subject to Levy Acquisition stockholder approval and other conditions.

Immediately following the transaction, Levy Acquisition intends to change its name to Del Taco Restaurants Inc.

Del Taco is a Lake Forest, Calif.-based Mexican-American quick service restaurant chain. Levy Acquisition is a Chicago-based blank check company formed in October 2013 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.