Rockwood to redeem notes, repay bank debt with IPO proceeds

New York, Feb. 11 - Rockwood Holdings, Inc. said it plans to redeem notes and repay bank debt issued by its Rockwood Specialties subsidiaries with part of the proceeds of a planned initial public offering of common stock.

The Princeton, N.J., specialty chemicals company filed to offer up to $500 million of common stock in an S-1 registration statement with the Securities and Exchange Commission Friday. The bookrunner for the IPO is Goldman, Sachs & Co.

Rockwood estimated IPO net proceeds at $447.5 million after deducting discounts and commissions, offering expenses and a $10 million fee to terminate a management services agreement with affiliates of Kohlberg Kravis Roberts & Co. LP and DLJ Merchant Banking Partners III, LP.

Rockwood will:

* Use $107.3 million of the proceeds to redeem its outstanding 15% PIK notes due Jan. 31, 2015 and pay the redemption premium;

* Use $61.7 million of the proceeds to repay its outstanding 15% PIK loans due Nov. 20, 2011;

* Use $80.6 million of the proceeds to redeem the senior discount notes held by an affiliate of KKR;

* Use $150.4 million of the proceeds to redeem $131.3 million or 35% of its 10 5/8% notes due 2011 and pay a related redemption premium;

* Redeem the redeemable convertible preferred stock held by an affiliate of KKR;

* Use $14.4 million to repay borrowings under its revolving credit facility.

Proceeds from the greenshoe will be used to further repay revolver borrowings.

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