Del Laboratories merger to result in paydown under facility, offer for floaters, 8% notes

By Jennifer Chiou

New York, Dec. 7 - Del Laboratories, Inc.'s merger agreement will constitute a change of control and will trigger the repayment obligations under the senior ABL credit facility as well as an offer to purchase the $185 million of senior secured floating-rate notes due 2011 and 8% senior subordinated notes due 2012, according to an 8-K filing with the Securities and Exchange Commission.

On Dec. 6, Del's indirect parent company, DLI Holding Corp., entered into an agreement and plan of merger with DLI Holding LLC, Coty Inc. and Bella Acquisition, Inc. under which DLI will merge with and into Bella and DLI will continue as a wholly owned subsidiary of Coty.

The redemption date for the floaters is slated for Jan. 7, assuming that the merger is completed by Jan. 4. In the case that the floaters have not been redeemed or that the merger is terminated prior to Feb. 5, the redemption will automatically be rescinded.

The floaters will be redeemed at 102% plus accrued interest to the redemption date.

Under the agreement, Coty has the right to request DLI to redeem the 8% notes.

Del Laboratories is a Uniondale, N.Y.-based producer of cosmetics.

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