Educate LBO financing to include $290 million credit facility

By Sara Rosenberg

New York, Feb. 5 - Educate Inc. detailed financing plans for its buyout by management and other investors, including that there will be a $290 million credit facility, according to an SC 13D/A filed recently with the Securities and Exchange Commission.

JPMorgan is the lead bank on the deal.

The facility, as committed, consists of a $170 million six-year term loan expected at Libor plus 275 basis points, a $15 million five-year revolver expected at Libor plus 275 bps with a 50 bps commitment fee, and a $105 million seven-year second-lien term loan expected at Libor plus 550 bps.

The second-lien loan will carry call premiums of 102 in year one and 101 in year two.

Under the transaction agreement, Christopher Hoehn-Saric, chairman and chief executive officer, Peter Cohen, president and chief operating officer, and certain other members of management and affiliates of Sterling Capital Partners and Citigroup Private Equity are buying Educate for $8.00 per share in cash.

The total value of the transaction, including assumed debt, is about $535 million.

The transaction is expected to close in the second quarter, subject to approval by the company's stockholders, as well as other customary closing conditions, including the receipt of regulatory approvals.

Educate is a Baltimore, based pre-K-12 education company.

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