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Energizer plans $2.04 billion credit facilities, $720 million notes
By Sara Rosenberg
New York, Jan. 16 – Energizer Holdings Inc. has received a commitment for $2.04 billion of senior secured credit facilities and an up to $720 million one-year senior unsecured bridge loan to fund its acquisition of Spectrum Brands’ Global Battery and Portable Lighting Business for $2 billion in cash, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.
The bridge loan is expected to be replaced with senior notes.
J.P. Morgan Securities LLC and Barclays are the joint lead arrangers and bookrunners on the debt, with JPMorgan the left lead on the credit facilities and Barclays the left lead on the bridge loan.
The credit facilities consist of a $400 million five-year revolver and a $1.64 billion seven-year covenant-light first-lien term loan.
As committed, pricing on the revolver and term loan is expected at Libor plus 275 basis points with a 0% Libor floor. The revolver is anticipated to have a 50 bps commitment fee.
The term loan includes 101 soft call protection for six months.
Amortization on the term loan is 1% per annum.
Pricing on the bridge loan is Libor plus 500 bps with a 1% Libor floor. The spread will increase by 50 bps every three months until it hits a specified cap.
In addition to funding the acquisition, the new debt, along with cash on hand, will be used to refinance Energizer’s existing credit facility, to provide working capital and for the payment of related fees and expenses.
Pro forma leverage is expected to be around 5 times fiscal year 2018 estimated adjusted EBITDA.
Closing is expected before year-end, subject to regulatory approvals and customary conditions.
Energizer is a St. Louis-based manufacturer of primary batteries and portable lighting products.
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