Orbitz better with acquisition news; Targa breaks; PetSmart, Hoover Container revise deals

By Sara Rosenberg

New York, Feb. 12 – Orbitz Worldwide Inc.’s term loan headed higher in trading on Thursday after news came out that the company is being acquired by Expedia Inc., and Targa Resources Corp. saw its credit facility emerge in the secondary market.

Moving to the primary, PetSmart Inc. lowered pricing on its term loan B, tightened the original issue discount and accelerated the commitment deadline, Hoover Container Solutions widened the spread on its term loan while also shortening the maturity, and Hanson Building Products and Indivior plc released talk with launch.

Orbitz gains ground

Orbitz’s term loan was stronger in the secondary market on Thursday following the announcement of its acquisition agreement with Expedia, according to a trader.

The term loan was quoted at par bid, par 1/8 offered, up from 99½ bid, par offered, the trader said.

Under the agreement, Orbitz is being bought by Expedia for $12.00 per share in cash, representing an enterprise value of about $1.6 billion.

Closing is subject to Orbitz shareholder approval, regulatory approvals and other customary conditions.

Chicago-based Orbitz and Bellevue, Wash.-based Expedia are online travel companies.

Targa frees up

Targa Resources’ credit facility began trading during the session, with the $430 million seven-year senior secured covenant-light term loan quoted at 99 bid, 99½ offered, a trader remarked.

Pricing on the term loan is Libor plus 475 basis points with a 1% Libor floor, and it was sold at an original issue discount of 98¼. There is 101 soft call protection for one year.

Earlier this week, the spread on the term loan firmed at the high end of the Libor plus 450 bps to 475 bps talk and the discount was modified from 98½.

The company’s $1.1 billion credit facility (Ba3/B+) also includes a $670 million revolver.

Bank of America Merrill Lynch, RBS Securities Inc., Wells Fargo Securities LLC, ING and MUFG are leading the deal that will be used to help fund the acquisition of Atlas Energy LP following the spinoff of its non-midstream assets, to pay related fees and expenses and to refinance existing debt.

Targa is buying Atlas Energy for $1,869,000,000, including 10.35 million shares and $610 million in cash.

The Houston-based midstream energy company expects the transaction to close this quarter, subject to the spinoff of the non-midstream assets and customary approvals and conditions.

PetSmart trims pricing

Switching to the primary, PetSmart cut pricing on its $4.3 billion seven-year senior secured covenant-light term loan B (Ba3/BB-) to Libor plus 425 bps from talk of Libor plus 450 bps to 475 bps and moved the original issue discount to 99½ from 99, according to a market source.

Also, it was outlined that beginning on March 20, the buyout financing loan has a ticking fee of the spread plus the Libor floor, the source said.

However, it is anticipated that the transaction will close during the week of March 9, subject to shareholder and regulatory approval and other customary conditions. The shareholder vote will take place on March 6.

Unchanged on the term loan was the 1% Libor floor and 101 soft call protection for one year.

Commitments are due at noon ET on Friday, moved up from 5 p.m. ET on Feb. 20, the source continued.

In addition to the term loan B, the company’s $5.05 billion credit facility includes a $750 million five-year asset-based revolver.

PetSmart lead banks

Citigroup Global Markets Inc., Barclays, Deutsche Bank Securities Inc., Nomura Securities International Inc., Jefferies Finance LLC, RBC Capital Markets and Macquarie Capital (USA) Inc. are leading PetSmart’s credit facility.

Proceeds will be used with $1.9 billion of senior notes and about $2.3 billion of equity to fund the buyout of the company by a consortium led by BC Partners Inc. for $83.00 per share in cash, or about $8.7 billion.

The buying consortium includes funds advised by BC Partners, alongside several of its limited partners, such as La Caisse de depot et placement du Quebec and StepStone.

PetSmart is a Phoenix-based specialty pet retailer.

Hoover tweaks deal

Hoover Container Solutions lifted pricing on its $165 million first-lien term loan to Libor plus 675 bps from Libor plus 550 bps and shortened the maturity to six years from seven years, a market source remarked.

The loan still has a 1% Libor floor, an original issue discount of 98 and 101 soft call protection for one year.

The company’s $195 million credit facility (B2/B) also includes a $30 million revolver.

Macquarie Capital (USA) Inc. is leading the deal that will be used to help fund the buyout of the company by First Reserve.

Hoover Container is a Houston-based provider of chemical tanks, cargo carrying units and related products and services to the energy, petrochemical and related industrial end markets.

Hanson discloses guidance

Also on the new deal front, Hanson Building Products held its bank meeting on Thursday afternoon, and with the event, price talk on its first- and second-lien term loans was announced, according to a market source.

The $595 million seven-year first-lien covenant-light term loan (B1/B+) is talked at Libor plus 525 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and the $300 million eight-year second-lien covenant-light term loan (Caa1/CCC+) is talked at Libor plus 900 bps with a 1% Libor floor, a discount of 98, and call protection of 103 in year one, 102 in year two and 101 in year three, the source said.

The company’s $1,045,000,000 credit facility also includes a $150 million ABL revolver.

Commitments are due on Feb. 26.

Hanson being acquired

Proceeds from Hanson Building Products’ credit facility will be used to help fund its buyout by Lone Star Funds from HeidelbergCement for $1.4 billion, of which up to $100 million will be payable in 2016, depending on the performance of the business in 2015.

Credit Suisse Securities (USA) LLC, Barclays and Citigroup Global Markets Inc. are the lead banks on the deal.

Closing is expected this quarter, subject to the satisfaction of customary conditions.

Hanson Building Products is a manufacturer of concrete and clay building products.

Indivior sets talk

Indivior disclosed talk of Libor/Euribor plus 575 bps with a 1% floor, an original issue discount of 97 to 98 and 101 soft call protection for six months on its $750 million five-year term loan B that launched with a morning bank meeting, a source said.

Included in the term loan B is a $115 million euro equivalent tranche.

The company’s $800 million senior secured credit facility (B3/B) also provides for a $50 million revolver that is talked at Libor plus 525 bps with no Libor floor and an original issue discount of 99½, the source continued.

Commitments are due on Feb. 27.

Morgan Stanley Senior Funding Inc. and Deutsche Bank Securities Inc. are leading the deal that will be used to fund a dividend and for general corporate purposes.

Indivior is a Richmond, Va.-based specialty pharmaceutical company focused on addiction and related mental health disorders.

Arctic Glacier allocates

In other news, Arctic Glacier LLC allocated its fungible $35 million add-on first-lien term loan due May 2019, according to a market source.

Pricing on the add-on loan is Libor plus 500 bps with a 1% Libor floor and it was sold at an original issue discount of 99. The debt has 101 soft call protection for six months.

Jefferies Finance LLC is leading the deal that will be used to repay revolver borrowings.

Along with the add-on, the company is repricing its existing $275.81 million term loan due May 2019 to Libor plus 500 bps with a 1% Libor floor from Libor plus 400 bps with a 1% Libor floor and resettin the 101 soft call protection for six months.

Arctic Glacier is a Winnipeg-based manufacturer and distributor of packaged ice.

Digital River closes

The buyout of Digital River Inc. by Siris Capital Group LLC for $26 per share in cash, or about $840 million, has been completed, a news release said.

To help fund the transaction, Digital River for a $345 million senior secured credit facility consisting of a $10 million revolver (B1/B), a $255 million six-year first-lien term loan (B1/B), and an $80 million second-lien term loan (Caa1/CCC) that was pre-sold.

Pricing on the first-lien term loan is Libor plus 650 bps with a 1% Libor floor and it was sold at an original issue discount of 98. There is 101 soft call protection for six months.

Recently, the spread on the first-lien term loan was increased from Libor plus 575 bps and amortization was changed to 2.5% in years one and two, and 5% per annum thereafter, from 1% per annum.

Macquarie Capital (USA) Inc. is leading the deal, which is expected to allocate on Friday.

Digital River is a Minneapolis-based provider of commerce as a service.

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