X-Rite sets talk; Jacobs Entertainment downsizes; Hanger Orthopedic, Cricket Communications break

By Sara Rosenberg

New York, May 25 - X-Rite Inc. came out with price talk on its credit facility as the deal was launched to investors through a bank meeting on Thursday. Also in the primary, Jacobs Entertainment Inc. reduced the size of its credit facility while leaving pricing unchanged.

In secondary happenings, Hanger Orthopedic Group Inc. and Cricket Communications Inc. freed for trading on Thursday, with both deals' term loan quoted in the par-plus region.

X-Rite released price talk on its $220 million credit facility as syndication on the transaction officially kicked off with a bank meeting during market hours, according to a source.

The $40 million revolver (B1/B+) and the $120 million first-lien term loan (B1/B+) were both presented to lenders with opening price talk of Libor plus 225 basis points, and the $60 million second-lien term loan (B3/B-) was presented to lenders with opening price talk of Libor plus 500 to 550 basis points, the source said.

Goldman Sachs is the lead bank on the deal.

Proceeds from the facility, along with $80 million in equity and $44 million in cash on hand, will fund the acquisition of Amazys Holding AG, which is split between approximately $280 million in cash plus 2.11 shares of X-Rite for each share of Amazys.

X-Rite is a Grandville, Mich., provider of color measurement solutions comprised of hardware, software and services for the verification and communication of color data. Amazys is a Regensdorf, Switzerland, technological leader of color management solutions for graphic arts, photography, digital imaging, paints, plastics, apparel, textiles and automotive, among other industries.

Jacobs cuts deal size

Jacobs Entertainment downsized its credit by $55 million through a reduction in the revolver tranche and a reduction in the funded term loan B tranche, according to a syndicate document.

The five-year revolver is now sized at $40 million, down from an original size of $50 million, and the funded six-year term loan B is now sized at $40 million, down from an original size of $85 million, the document said.

The size of the six-year delayed-draw term loan was left unchanged at $20 million.

Pricing on all three tranches remained at Libor plus 250 basis points, the document added. The revolver carries a 50 basis point commitment fee.

Credit Suisse and CIBC are the lead banks on the now $100 million credit facility (B+) - reduced from a total size of $155 million.

Proceeds will be used to help refinance the company's existing $148 million of 11 7/8% senior secured notes due 2009 and $19 million of subordinated debt.

Jacobs is a Golden, Colo.-based owner and operator of multiple gaming properties.

Hanger frees to trade

Hanger Orthopedic's credit facility hit the secondary on Thursday after allocations went out, with the $230 million term loan quoted at par 1/8 bid, par 5/8 offered consistently throughout the session, according to a trader.

The term loan is priced with an interest rate of Libor plus 250 basis points and contains a step down to Libor plus 225 basis points if total leverage is less than 5x and corporate ratings are no less than B2/B. During syndication, pricing on the term loan was reverse flexed from Libor plus 275 basis points, with the addition of the step down.

Hanger Orthopedic's $305 million credit facility (B2/B) also contains a $75 million revolver.

Lehman and Citigroup are the lead banks on the deal, with Lehman the left lead. Citi is administrative agent.

Proceeds from the credit facility, along with proceeds from a $50 million private placement of 3.33% convertible perpetual preferred stock to Ares Corporate Opportunities Fund LP and $175 million of senior notes, will be used to refinance all of the company's outstanding bank, bond debt and preferred stock.

The 10¼% bond offering had been downsized from $190 million prior to pricing, with the difference in funds to be made up by the company through available cash.

Of the total amount of proceeds, about $166 million will be used to repay revolver and term loan debt, $200 million will be used to refinance its 10 3/8% senior notes due 2009, $16 million will be used to refinance its 11¼% senior subordinated notes due 2009 and approximately $65 million will be used to redeem its outstanding 10% redeemable preferred stock.

Each of the proposed transactions will be conditioned upon, among other things, the consummation of each other component of the refinancing.

Hanger Orthopedic is a Bethesda, Md.-based provider of orthotic and prosthetic patient-care services.

Cricket breaks atop par

Also breaking for trading on Thursday was Cricket Communications (Leap Wireless International Inc.), which saw its $900 million term loan B quoted at par ½ bid, par ¾ offered by the end of the session, after bouncing a bit during market hours, according to a trader.

The term loan B is priced with an interest rate of Libor plus 275 basis points and provides for a step down to Libor plus 250 basis points under certain conditions.

Cricket's $1.1 billion credit facility (B2/B) also contains a $200 million revolver.

Bank of America and Goldman Sachs are the lead banks on the deal, with Bank of America the left lead.

Proceeds will be used to refinance the company's existing $600 million term loan B and $110 million revolver as well as to help finance the company's participation in the FCC's upcoming Auction #66 and in the spectrum after-market.

The company is also planning a $600 million bridge facility and a $250 million forward common stock sale for Auction #66.

Cricket Communications is a wholly owned subsidiary of Leap, a San Diego-based provider of mobile wireless services.

United Components closes

United Components, Inc. closed on its $330 million term loan D due June 2012 (B2/BB-) that is priced with an interest rate of Libor plus 225 basis points.

Proceeds were used to fund the acquisition of water pump manufacturer ASC Industries, Inc. and repay United Components' existing term loan C.

Lehman and JPMorgan acted as the lead banks on the deal, with Lehman the left lead.

United Components is an Evansville, Ind., auto parts manufacturer.

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