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EPL Finance to sell $150 million 8-year bonds to fund El Pollo Loco acquisition
By Paul Deckelman
New York, Nov. 1 - EPL Finance Corp. will sell $150 million of eight-year notes (Caa1) to help finance its acquisition of the El Pollo Loco grilled chicken restaurant chain, the latter company announced Tuesday.
The deal will be brought to market via joint bookrunners Merrill Lynch & Co. and Banc of America Securities, junk market primary sources said.
It will be marketed to potential investors via a roadshow that is slated to begin Wednesday, with pricing expected sometime in the middle-to-latter part of next week. The bonds will be non-callable for the first four years after issue, other than a three year provision for a 35% equity clawback, the sources said.
The notes will be sold under Rule 144A, with registration rights, by EPL Finance, which is an affiliate of Trimaran Capital Partners, LP, a New York-based private asset management firm. Trimaran is acquiring the stock of EPL Holdings Inc., the parent company of the Irvine, Calif.-based restaurant chain, which operates 328 outlets (189 franchised locations and 139 company-owned restaurants), located principally in California, with additional restaurants in Arizona, Nevada and Texas. The privately held company is currently owned by New York-based American Securities Capital Partners, LP and company management. EPL Finance will be merged with EPL Holdings.
In addition to the bond deal, EPL Finance is also lining up a $125 million senior secured credit agreement to partly fund the estimated $400 million purchase price. The balance will consist of equity from Trimaran and from El Pollo Loco's current management.
The acquisition is expected to close during the current 2005 fourth quarter.
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