Morton's Restaurant details $215 million credit facility for buyout

By Sara Rosenberg

New York, Dec. 27 - Morton's Restaurant Group Inc. will receive a $215 million senior secured credit facility for its purchase by Tilman J. Fertitta's wholly owned company Fertitta Morton's Restaurants Inc., according to an SC 13D recently filed with the Securities and Exchange Commission.

The facility consists of a $200 million five-year term loan and a $15 million 41/2-year revolver, with both tranches expected to be priced at Libor plus 725 basis points with a 1.5% Libor floor.

The revolver is anticipated to have a 75 bps unused fee.

Amortization on the term loan is 2.5% in year one, 5% in years two and three, and 10% in years four and five.

Financial covenants include a maximum consolidated total leverage ratio and a minimum fixed charge coverage ratio.

Jefferies & Co. is the lead bank on the deal that is expected to launch with a bank meeting around mid-January.

Under the buyout agreement, Morton's is being acquired for $6.90 per share in cash through a tender offer that is expected to begin shortly. Upon the successful completion of the tender offer, Fertitta will acquire all remaining shares through a second-step merger, according to the filing.

Other funds for the buyout will come from cash on hand.

Closing is expected in early February, subject to the tender of a majority of shares, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Morton's is a Chicago-based operator of company-owned upscale steakhouses.

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