Rexnord launches $200 million term B add-on at Libor plus 250 bps

By Sara Rosenberg

New York, Jan. 26 - Rexnord Corp. launched its proposed $200 million term loan B add-on to investors on Friday, and in conjunction with the launch, price talk of Libor plus 250 bps surfaced on the deal, according to a market source.

Proceeds from the add-on, along with $460 million of high-yield bonds, will be used to fund the acquisition of Zurn Industries Inc., the plumbing products business of Jacuzzi Brands, Inc., for a cash purchase price of about $950 million.

According to various filings with the Securities and Exchange Commission, Rexnord had received a commitment for a $710 million credit facility consisting, of a $100 million revolver, a $360 million first-lien term loan and a $250 million second-lien term loan, but apparently, the company just opted to use the loan add-on and bonds, which is the structure the company had said it was contemplating when the acquisition was first announced in 2006.

Credit Suisse is the left lead bank on the deal.

Closing is subject to, among other things, the receipt of financing and the completion of Apollo Management LP's proposed acquisition of Jacuzzi Brands.

RBS Global, Inc., the parent company of Rexnord and a portfolio company of Apollo Management, is a Milwaukee-based, manufacturer of highly engineered power transmission, aerospace and other precision motion technology products.

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