BMC dips with Compuware acquisition news; Duravant frees up; PPD, Micro Focus postponed

By Sara Rosenberg

New York, March 2 – BMC saw its term loan weaken in the secondary market on Monday after it was announced that the company is purchasing Compuware.

Also, Duravant LLC (Engineered Machinery Holdings Inc.) accelerated the commitment deadline for its incremental first-lien term loan and then the debt broke for trading late in the session.

In more happenings, PPD Inc. and Micro Focus International plc pulled their loan transactions from market, and Tata Chemicals North America Inc. joined this week’s primary calendar.

BMC softens

BMC’s term loan dropped to 95¼ bid, 96¼ offered from 96 7/8 bid, 97 5/8 offered following news that it is acquiring Compuware from Thoma Bravo, a trader said.

Compuware’s term loan was quoted at 99¾ bid, par ¼ offered, unchanged on the day, the trader added.

Financial terms of the transaction were not disclosed.

Macquarie Capital and Jefferies LLC acted as financial advisers to BMC. Credit Suisse served as financial adviser to Compuware.

BMC, a KKR portfolio company, is a Houston-based provider of IT solutions for the digital enterprise. Compuware is a Detroit-based provider of mainframe application development, delivery and support solutions.

Duravant accelerated, breaks

Duravant moved up the commitment deadline for its $155 million incremental first-lien term loan due July 2024 to 4 p.m. ET on Monday from 2 p.m. ET on Tuesday, a market source remarked.

Pricing on the incremental term loan is Libor plus 425 basis points with a 1% Libor floor, in line with existing term loan pricing, and the new debt was sold at an original issue discount of 99.5.

Late in the day, the incremental term loan freed to trade and levels were quoted at 99½ bid, par ¼ offered, another source added.

Along with the incremental term loan, the company is getting a $50 million incremental revolver.

Jefferies LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Antares Capital, Societe Generale, MUFG and KeyBanc Capital Markets are leading the deal that will be used to fund the acquisition Woodside Electronics Corp., a manufacturer of optical color and defect sorting equipment.

Duravant is a Downers Grove, Ill.-based automation solutions platform providing highly engineered equipment and related aftermarket parts and services.

PPD postponed

In other news, PPD withdrew its $4.6 billion of credit facilities (Ba3/B+) due to market conditions, according to a market source.

The facilities consisted of a $500 million five-year revolver, and a $4.1 billion seven-year covenant-lite term loan B that launched last month with talk of Libor plus 200 bps to 225 bps with a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

J.P. Morgan Securities LLC was the left lead on the deal, which was going to be used to refinance a revolver due May 2022, a term loan B due August 2022 and 6 3/8% senior notes due August 2023.

PPD is a Wilmington, N.C.-based contract research organization focused on clinical development and laboratory services.

Micro Focus pulled

Micro Focus decided to postpone its $1.435 billion equivalent seven-year senior secured term loan B (B1) and the extension of its $500 million revolver (B1) to June 2024 from September 2022 because of adverse market conditions, a company news release said.

The term loan B was expected to have a minimum $500 million tranche and a minimum €500 million tranche, with he U.S. loan talked at Libor plus 375 bps to 400 bps with a 0% Libor floor and an original issue discount of 99, and the euro term loan talked at Euribor plus 325 bps to 350 bps with a 0% floor and a discount of 99.5. Both term loans were talked with 101 soft call protection for six months.

J.P. Morgan Securities LLC was the physical bookrunner. Citigroup Global Markets Inc., Barclays, HSBC, Royal Bank of Scotland, BofA Securities, Inc. and Goldman Sachs were mandated lead arrangers.

Proceeds from the term loan B were going to be used by the Newbury, England-based enterprise software company to refinance existing term loan B borrowings due November 2021.

The company said in the release that it plans to relaunch the refinancing when market conditions improve.

Tata Chemicals on deck

Tata Chemicals North America set a bank meeting for Tuesday to launch a $380 million term loan (Ba3), according to a market source.

J.P. Morgan Securities LLC is leading the deal that will be used to help repay an existing term loan and a bridge loan.

Tata Chemicals North America is a Sandy, Utah-based producer of soda ash.

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