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Staples launches $2.4 billion term loan at Libor plus 425 bps
By Sara Rosenberg
New York, Aug. 2 – Staples Inc. launched on Wednesday its $2.4 billion seven-year first-lien term loan with price talk of Libor plus 425 basis points with a 1% Libor floor and an original issue discount of 99.5, according to a market source.
The term loan has 101 soft call protection for six months, the source said.
UBS Investment Bank, Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets, Jefferies LLC, Fifth Third Bank, Goldman Sachs Bank USA, Citigroup Global Markets Inc., KKR Capital Markets and Natixis are the bookrunners on the deal.
Commitments are due on Aug. 14, the source added.
Proceeds will be used to help fund the buyout of the company by Sycamore Partners for $10.25 in cash per share of common stock. The transaction is valued at about $6.9 billion.
As part of the financing packaging, the company is also getting a $1.2 billion ABL facility for which Wells Fargo is the left lead, and has received a commitment for a $1.6 billion unsecured bridge loan for which Bank of America is the left lead.
With the acquisition, there will be an internal reorganization under which the U.S. retail, Canadian retail, and North American delivery business will be separated into stand-alone entities.
The debt financing is for the North American delivery business, which will have pro forma leverage of around 4 times.
Closing is expected no later than December, subject to customary conditions, including the receipt of regulatory and stockholder approval. The transaction is not subject to a financing condition.
Staples is a Framingham, Mass.-based retailer of office supplies.
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