Varietal Distribution sets pricing in tender for VWR notes

By Jennifer Chiou

New York, June 12 - Varietal Distribution Merger Sub, Inc. said it has determined the pricing in the tender offer for VWR International, Inc.'s $320 million of 8% senior subordinated notes due 2014 and $200 million of 6 7/8% senior notes due 2012, CDRV Investors, Inc.'s $350 million senior floating-rate notes due 2011 and CDRV Investment Holdings Corp.'s $481 million of 9 5/8% senior discount notes due 2015.

Varietal Distribution Merger Sub is a subsidiary of Varietal Distribution Holdings, LLC, a new company set up by Madison Dearborn Partners, LLC to acquire CDRV, the indirect parent of VWR. As already announced, the tenders are being carried out as part of the leveraged buyout.

For 8% notes tendered with consents by the consent date, Varietal will pay $1,078.10, which is the present value of $1,040 on the notes' first call date of April 15, 2009, plus future interest payments to that date minus accrued interest from the last coupon payment date up to but excluding the payment date. The present value was determined using the yield on the 3.125% U.S. Treasury note due April 15, 2009, plus a fixed spread of 50 basis points.

For the 6 7/8% notes tendered with consents by the consent date, Varietal said it will pay $1,042.94, which is the present value of $1,034.38 on the notes' first call date of April 15, 2008, plus future interest payments to that date minus accrued interest from the last coupon payment date up to but excluding the payment date. The present value was determined using the yield on the 4.625% U.S. Treasury note due March 31, 2008, plus a fixed spread of 50 bps.

For the floaters, Varietal is offering par plus accrued interest up to but excluding the payment date.

For the discount notes, Varietal will pay $914.11, which is the present value of $1,048.13 on the notes' first call date of Jan. 1, 2010. The present value was determined using the yield on the 3.5% U.S. Treasury note due Dec. 15, 2009, plus a fixed spread of 50 bps.

The total for each series of notes includes a consent payment of $30.00 per $1,000 principal amount that will only be paid to those who tendered with consents by the consent deadline of 5 p.m. ET on June 12. The tender ends at 5 p.m. ET on June 26. It began on May 30.

The offers are subject to conditions including the receipt of tenders of a majority of each series of notes and the necessary consents to amend the notes. They also depend on the acquisition and related financing being completed.

Financing is expected to include a new senior secured credit facility and the issuance of new senior notes and senior subordinated notes.

Varietal observed that the note issuers have the right to redeem the notes and so can complete the financing transactions even if the tender offer does not succeed. CDRV Investors plans to issue a conditional redemption notice for the floaters.

Goldman, Sachs & Co. is dealer manager and solicitation agent (800 828-3182 or 212 357-0775). D.F. King & Co., Inc. is information agent and depositary (800 431-9643 or call collect 212 269-5550).

VWR is a West Chester, Pa., distributor of laboratory products.

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