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Jarden new term loan B debt to help fund American Household acquisition
By Sara Rosenberg
New York, Sept. 20 - Jarden Corp. plans to use new term loan B debt and an equity contribution from Warburg Pincus to finance the acquisition of American Household Inc. for $745.6 million, which includes the assumption or repayment of debt, company officials said in a conference call Monday.
The equity contribution totals $350 million and the "balance of the acquisition price will be funded through a new senior credit facility," company officials said in the call.
"We currently borrow at Libor plus 225 [basis points]. We're hopeful that the new term B, because we're financing all of the additional debt with a term B facility, will be in that same range," officials added.
Citigroup Global Markets and CIBC World Markets, Jarden's primary financial advisers for this transaction, have provided commitments to underwrite the bank debt. Citigroup is left lead on the deal.
A bank meeting to launch the deal for syndication won't be held for some time because the acquisition isn't expected to close until the first quarter of 2005. The deal is subject to Hart-Scott-Rodino approval and other customary closing conditions.
Total debt to adjusted EBITDA at closing is expected to be around 3.75x. The company expects the ratio to return to below the "3.5x objective" within one year of closing the acquisition, officials said.
Jarden's total pro forma debt will be about $1.04 billion to $1.05 billion.
Jarden is a Rye, N.Y., provider of niche consumer products. American Household is a Boca Raton, Fla., consumer products company that produces brand names such as BRK, Campingaz, Coleman, First Alert, Health o meter, Mr. Coffee, Oster and Sunbeam.
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