Flexera Software add-on term loan frees to trade; Beacon Roofing schedules bank meeting

By Sara Rosenberg

New York, Sept. 3 – Flexera Software LLC’s add-on first-lien term loan made its way into the secondary market on Thursday, with levels quoted above it original issue discount.

Meanwhile, in the primary market, Beacon Roofing Supply Inc. nailed down timing on the launch of its proposed credit facility.

Flexera starts trading

Flexera Software’s fungible $45 million add-on first-lien term loan broke for trading on Thursday, with levels seen at 99¼ bid, 99¾ offered, according to a trader.

Pricing on the add-on term loan is Libor plus 350 basis points with a 1% Libor floor, in line with the existing first-lien term loan, and it was issued at an original issue discount of 99.03.

Jefferies Finance LLC is leading the deal that will be used to fund an acquisition.

Flexera is a Schaumburg, Ill.-based provider of strategic application usage management services for application producers and their enterprise customers.

Beacon timing emerges

Switching to the primary market, Beacon Roofing set a bank meeting for 10 a.m. ET in New York on Sept. 10 to launch its credit facility, which was previously broadly labeled as September business, according to a market source.

Past filings with the Securities and Exchange Commission outlined the debt as a $1.15 billion credit facility comprised of a $700 million five-year ABL revolver, expected at Libor plus 125 bps to 175 bps based on quarterly average excess availability, and a $450 million seven-year covenant-light term loan B, expected at Libor plus 300 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

Citigroup Global Markets Inc. and Wells Fargo Securities LLC are leading the deal, with Citi left on the term loan and Wells Fargo left on the revolver.

Beacon buying Roofing

Proceeds from Beacon Roofing’s credit facility will be used to help fund the acquisition of Roofing Supply Group from Clayton, Dubilier & Rice in a cash and stock transaction valued at around $1.1 billion, under which Roofing Supply Group shareholders will receive about $286 million in cash and $291 million of common stock. Also, Beacon will refinance around $565 million of Roofing Supply’s net debt.

The filings said that other funds for the purchase would come from $300 million of eight-year senior unsecured notes, backed by a commitment for a $300 million senior unsecured bridge loan, and $291 million in new stock and options, the filings added.

Bridge loan pricing is Libor plus 525 bps with a 1% Libor floor. The spread will increase by 50 bps every three months until it hits a cap.

Closing is expected on Oct. 1, subject to the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Beacon Roofing is a Herndon, Va.-based distributor of residential and commercial roofing materials and complementary building products. Roofing Supply is a Dallas-based wholesale distributor of roofing supplies and related materials.

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