Wolverine cuts term B to $350 million, ups term A to $550 million

By Sara Rosenberg

New York, June 20 - Wolverine Worldwide Inc. downsized its seven-year term loan B to $350 million from $500 million and upsized its five-year term loan A to $550 million from $400 million, according to a market source.

Additionally, price talk on the term loan B is now Libor plus 375 basis points to 400 bps, versus prior talk of just Libor plus 375 bps, the source said.

The B loan now also includes a ticking fee of 50% of the drawn spread starting on July 16, stepping up to 100% of the drawn spread plus the Libor floor on Oct. 16, the source said.

The 1% Libor floor, original issue discount of 99 and 101 soft call protection for one year were left unchanged

The company's $1.1 billion senior secured credit facility (Ba2/BB) also provides for a $200 million five-year revolver.

Price talk on the revolver and term loan A is Libor plus 225 bps.

Recommitments are due at 3 p.m. ET on Thursday.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the lead banks on the deal.

Proceeds from the credit facility will be used to fund the company's $1.23 billion acquisition of Collective Brands Inc.'s Performance + Lifestyle Group.

Other funds for the transaction are expected to come from $375 million of senior unsecured notes that are backed by a commitment for a $375 million senior unsecured bridge loan.

Under the agreement, Wolverine Worldwide, Blum Capital Partners and Golden Gate Capital are acquiring Collective Brands for $21.75 per share in cash, or roughly $2 billion including the assumption of debt.

At close, Wolverine Worldwide will acquire Collective Brands' Performance + Lifestyle Group, which includes the wholesale and retail operations of the Sperry Top-Sider, Saucony, Stride Rite and Keds brands. The company will continue to operate from Lexington, Mass.

Blum Capital and Golden Gate will obtain the operations of Payless ShoeSource and Collective Licensing International, which together will operate as a stand-alone entity. Payless will continue to have headquarters in Topeka, Kan., and Collective Licensing will continue to be based in Englewood, Colo.

Blum Capital and Golden Gate Capital have received a commitment for a $250 million senior secured asset-based revolving credit facility from Wells Fargo Capital Finance for the buyout.

Closing is expected late in the third quarter or early in the fourth quarter, subject to customary conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and Collective Brands' shareholder approval.

Wolverine Worldwide is a Rockford, Mich.-based marketer of branded casual, active lifestyle, work, outdoor sport and uniform footwear and apparel. Collective Brands is a Topeka, Kan.-based footwear and related accessories company.

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