5-Hour Energy starts roadshow for $400 million seven-year notes

By Paul A. Harris

Portland, Ore., July 18 - Innovation Ventures, LLC, makers of 5-Hour Energy, in conjunction with Innovation Ventures Finance Corp., began a brief roadshow on Wednesday for a $400 million offering of seven-year senior secured notes, according to an informed source.

The deal is expected to price on Thursday.

Bank of America Merrill Lynch and Jefferies & Co. are the joint bookrunners.

The Rule 144A for life notes become callable in three years at par plus 75% of the coupon. A special call provision allows the issuer to redeem 10% of the principal annually at 103 during the non-call period.

The notes also feature a 101% poison put.

Credit ratings remain to be determined.

Proceeds will be used to pay bank debt and for general corporate purposes, including capital investments in a new manufacturing plant and distribution facility, new product development, international expansion and selective strategic acquisitions.

The Farmington Hills, Mich.-based company produces energy drinks manufactured and marketed under the brand name 5-hour Energy.

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