Reynolds to launch roughly $1.45 billion credit facility on Tuesday

By Sara Rosenberg

New York, Oct. 15 - Reynolds is scheduled to hold a bank meeting on Tuesday to launch a roughly $1.45 billion credit facility, according to a market source.

Credit Suisse is the lead bank on the deal.

The facility consists of a $120 million revolver, an €80 million revolver, an $835 million term loan and a €250 million term loan, the source said.

Proceeds will be used to help fund the acquisition of Closure Systems International and Reynolds Consumer Products by Beverage Packaging Holdings.

Other funds for the acquisition will come from $1.1 billion of senior secured notes, €450 million of senior secured notes, €116 million of existing cash and €500 million of equity.

In addition to helping fund the acquisition, the senior secured debt also will repay existing bank borrowings at Beverage Packaging of around €485 million and repay existing Reynolds debt.

The total purchase price for the companies is $3.023 billion, or 7.7 times LTM adjusted pro forma EBITDA.

Pro forma for the transaction, net senior secured leverage will be 3.3 times and net total leverage will be 4.8 times.

The company said in a press release that it is committed to the rapid deleveraging of the combined company with free cash flow.

Closing is expected to take place in the fourth quarter and the combined entity will assume the Reynolds name.

Reynolds is a manufacturer of aluminum foil, wraps and bags. Closure Systems is a manufacturer of plastic caps and closures, primarily serving the beverage market. And, Beverage Packaging is a manufacturer of aseptic carton packaging systems.

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