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PanAmSat to get new loan, issue bonds to support leveraged buyout by KKR
By Sara Rosenberg
New York, April 20 - PanAmSat Corp. plans to get a new credit facility and issue high-yield bonds to support its leveraged buyout by affiliates of Kohlberg Kravis Roberts & Co. from The DirecTV Group Inc. Credit Suisse First Boston and Citigroup will lead the debt financings, however, the order in which the banks will be listed on the transactions has not yet been established, according to an informed source.
The acquisition, which was announced Tuesday, is valued at approximately $4.3 billion, including the assumption of about $750 million of net debt. Completion is subject to regulatory approvals, including the Federal Communications Commission, and PanAmSat stockholders' approvals. The boards of directors of both PanAmSat and DirecTV already voted unanimously in favor of the transaction.
Because of the regulatory approvals needed, timing on the debt financings is still to be determined, the source added.
"Today, PanAmSat is the leading distributor of video signals in the world, transmitting more than 2,100 broadcast TV channels globally. With KKR as our partner, we will have the opportunity to enhance our competitive position and significantly expand PanAmSat's capabilities," said Joe Wright, president and chief executive officer of PanAmSat, in a company news release.
"KKR understands our mission of servicing a strong customer base in the entertainment, communications and government sectors and will support our efforts to grow by developing new products and services, forging strategic alliances and developing new markets. This new alliance puts us on an excellent footing to build for our future."
Also as part of the transaction, DirecTV agreed to extend and enhance some agreements with PanAmSat, at market rates, to assure future revenue flows to PanAmSat and continuity of services.
The LBO is expected to be completed in the second half of 2004.
PanAmSat is a Wilton, Conn., satellite operator.
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