Targa Resources, Digital River revised; Riverbed, Lattice, Hanson, American Beacon on deck

By Sara Rosenberg

New York, Feb. 11 – Targa Resources Corp. firmed pricing on Wednesday on its term loan at the high end of talk and widened the original issue discount, and Digital River Inc. lifted the spread on its first-lien term loan while also sweetening amortization.

Additionally, Riverbed Technology Inc. released timing, structure and price talk on its upcoming buyout deal, and Lattice Semiconductor Corp., Hanson Building Products and American Beacon Advisors Inc. joined the near-term calendar.

Targa updates pricing

Over in the primary, Targa Resources set pricing on its $430 million seven-year senior secured covenant-light term loan at Libor plus 475 basis points, the high end of the Libor plus 450 bps to 475 bps talk, and moved the original issue discount to 98Ľ from 98˝, a source said, adding that the 1% Libor floor and 101 soft call protection for one year were unchanged.

Allocations are expected on Thursday, the source remarked.

The company’s $1.1 billion credit facility (Ba3/B+) also includes a $670 million revolver.

Bank of America Merrill Lynch, RBS Securities Inc., Wells Fargo Securities LLC, ING and MUFG are leading the deal that will be used to help fund the acquisition of Atlas Energy LP following the spinoff of its non-midstream assets, to pay related fees and expenses and to refinance existing debt.

Targa is buying Atlas Energy for $1,869,000,000, including 10.35 million shares valued at $1,259,000,000 based on the closing price of the company’s common stock on Oct. 10, 2014 and $610 million in cash.

The Houston-based midstream energy company expects the transaction to close this quarter, subject to the spinoff of the non-midstream assets and customary approvals and conditions.

Digital River flexes

Digital River raised pricing on its $255 million six-year first-lien term loan (B1/B) to Libor plus 650 bps from Libor plus 575 bps and revised the amortization to 2.5% in years one and two, and 5% per annum thereafter, from 1% per annum, according to a market source.

As before, the first-lien term loan has a 1% Libor floor, an original issue discount of 98 and 101 soft call protection for six months.

The company’s $345 million senior secured credit facility also includes a $10 million revolver (B1/B), and an $80 million second-lien term loan (Caa1/CCC) that was pre-sold.

Allocations are expected later this week, the source said.

Macquarie Capital (USA) Inc. is leading the deal.

Digital River buyout

Proceeds from Digital River’s credit facility and up to $328.9 million in equity will be used to finance its acquisition by Siris Capital Group LLC for $26 per share in cash, or about $840 million.

Closing is expected this quarter, subject to customary conditions, including the receipt of shareholder approval and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Digital River is a Minneapolis-based provider of commerce as a service.

Riverbed details emerge

Also in the primary, Riverbed Technology set a bank meeting for 10 a.m. ET in New York on Thursday to launch its $1,625,000,000 senior secured credit facility, which is now known to consist of a $100 million five-year revolver and a $1,525,000,000 seven-year first-lien term loan, according to a market source.

Also, with timing and tranching announced, talk on the term loan came out at Libor plus 525 bps with a 1% Libor floor, an original issue discount of 98˝ and 101 soft call protection for six months, the source said.

Commitments are due on Feb. 26.

Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Barclays and Morgan Stanley Senior Funding Inc. are leading the deal.

Riverbed being acquired

Proceeds from Riverbed’s credit facility, an expected $625 million unsecured notes offering and about $1.4 billion of equity will be used to fund its buyout by Thoma Bravo LLC and Teachers’ Private Capital for $21.00 per share in cash, or a total of about $3.6 billion.

The notes are backed by a commitment for a $625 million senior unsecured bridge loan.

Closing is expected in the first half of this year, subject to stockholder approval, regulatory approvals and other customary conditions. There are no financing conditions for the transaction.

Riverbed is a San Francisco-based technology company that specializes in improving the performance of networks and networked applications.

Lattice timing disclosed

Lattice Semiconductor emerged with plans to a bank meeting on Feb. 18 to launch its $350 million six-year senior secured covenant-light term loan, a market source said. The deal was previously labeled as February business.

A recent filing with the Securities and Exchange Commission said the loan is expected at Libor plus 400 bps with a 1% Libor floor and 101 soft call protection for six months, however, official talk is not yet out.

Jefferies Finance LLC and HSBC Securities USA Inc. are leading the deal that will be used with about $250 million of cash on the balance sheet to fund the acquisition of Silicon Image Inc. in an all-cash tender offer of $7.30 per share, representing an equity value of about $600 million.

Closing is anticipated by the end of March, subject to customary conditions, including Hart-Scott-Rodino and the tender of a majority of Silicon Image’s common stock.

Pro forma net leverage will be about 1.4 times, the source added.

Lattice Semiconductor is a Portland, Ore.-based provider of programmable connectivity services. Silicon Image is a Sunnyvale, Calif.-based provider of wired and wireless connectivity services.

Hanson readies deal

Hanson Building Products scheduled a bank meeting for 2:30 p.m. ET in New York on Thursday to launch a $1,045,000,000 credit facility, a market source said.

The facility consists of a $150 million ABL revolver, a $595 million seven-year first-lien covenant-light term loan with a 1% Libor floor and a $300 million eight-year second-lien covenant-light term loan with a 1% Libor floor, the source continued.

Commitments are due on Feb. 26.

Credit Suisse Securities (USA) LLC, Barclays and Citigroup Global Markets Inc. are leading the deal that will be used to help fund the buyout of the company by Lone Star Funds from HeidelbergCement for $ 1.4 billion, of which up to $100 million will be payable in 2016, depending on the performance of the business in 2015.

Closing is expected this quarter, subject to the satisfaction of customary conditions.

Hanson Building Products is a manufacturer of concrete and clay building products.

American Beacon on deck

American Beacon Advisors set a bank meeting for Feb. 19 to launch a $350 million credit facility, according to a market source.

The facility consists of a $40 million revolver, a $220 million first-lien term loan and a $90 million second-lien term loan, the source said.

RBC Capital Markets and Barclays are leading the deal that will be used to help fund the buyout of the company by Kelso & Co. and Estancia Capital Management from TPG Capital and Pharos Capital Group LLC.

Closing is expected in the second quarter, subject to customary conditions, including approvals of the Board of Trustees and shareholders of the American Beacon family of mutual funds and consents from other American Beacon clients.

Total leverage is 5.5 times and equity is 50% of the capitalization, the source added.

American Beacon Advisors is a Fort Worth, Texas-based provider of investment advisory services to institutional and retail markets.

Nellson Nutraceutical allocates

Nellson Nutraceutical LLC’s $368 million senior credit facility allocated on Wednesday, according to a market source.

The facility includes a $240 million seven-year first-lien term loan (B), a $55 million five-year revolver (B) and a $73 million second-lien term loan (CCC+) that was privately placed.

Pricing on the first-lien term loan is Libor plus 500 bps with a 1% Libor floor and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, the spread on the first-lien term loan was lifted from talk in the Libor plus 450 bps area and the call protection was extended from six months.

GE Capital Markets, BMO Capital Markets, RBC Capital Markets and Madison Capital are leading the deal that will be used to fund the tack-on acquisition of Le Groupe Multibar Inc. and refinance existing debt.

Nellson Nutraceutical is an Irwindale, Calif.-based nutritional diet protein energy diabetic medical bar and powder manufacturer. Le Groupe Multibar is a Montreal-based manufacturer of nutritional and snack bars.

Rite Aid dips

Moving to the secondary market, Rite Aid Corp.’s T-1 loan softened to par 3/8 bid, 101 3/8 offered from par ˝ bid, 101˝ offered, while its T-2 loan was unchanged at par bid, par ˝ offered, a trader remarked.

In the morning, the company announced plans to acquire Envision Pharmaceutical Services from TPG for about $1.8 billion in cash and $200 million in stock.

The cash portion of the acquisition is expected to be financed with proceeds from the issuance of unsecured notes, a news release said. Citigroup Global Markets Inc., Bank of America Merrill Lynch, Wells Fargo Securities LLC and Credit Suisse provided the debt commitment backing the notes.

Closing is expected by September, subject to regulatory approvals and other customary conditions.

The trader said that the shift in T-1 loan levels was probably more about making a market than about the acquisition news since no new loans are anticipated to be used for the transaction.

Rite Aid is a Camp Hill, Pa.-based drugstore chain. Envision Pharmaceutical is a Twinsburg, Ohio-based pharmacy benefit management company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.