Multi-Color launches revised $1.39 billion notes; pricing Monday

By Paul A. Harris

Portland, Ore., June 17 – Multi-Color launched a revised $1.39 billion offering of high-yield notes on Monday, sources said.

Revisions saw $50 million of proceeds shifted to the secured notes from the unsecured notes.

Price talk widened on the unsecured notes, and there were changes to the offering documents.

The deal, as revised, features an upsized $700 million tranche of seven-year senior secured notes (B2/B). The tranche size increased from $650 million. Price talk remains unchanged in the 7% area; initial talk was in the low 7% area.

Talk on a downsized $690 million tranche of eight-year unsecured notes (Caa2/B-) widened to 10¼% to 10½% versus earlier talk of 10% to 10¼%; initial talk was in the low 9% area. The unsecured tranche is decreased from $740 million.

Books close at 12:30 p.m. ET on Monday, and the deal is set to price thereafter.

The deal had previously been expected to price on Friday. However, the unsecured tranche engendered pushback from investors objecting to the 10% to 10¼% price talk, as well as a covenant package that afforded too little protection for lenders, market sources say.

The secured tranche, on the other hand, has been oversubscribed since early in the roadshow, a trader said, adding that were it not for the upsizing of the secured tranche, talk might have wound as tight as the 6¾% area.

BofA Securities Inc. is the left bookrunner for the Rule 144A for life offering. Deutsche Bank Securities Inc., Barclays, BMO Securities, Credit Suisse Securities (USA) LLC, Houlihan Lokey and Morgan Stanley & Co. LLC are the joint bookrunners.

The notes in both tranches come with three years of call protection.

Proceeds will be used to help fund the buyout of the company by Platinum Equity LLC and fund the merger of Multi-Color with W/S Packaging Group, a portfolio company of Platinum Equity. The transaction is valued at $2.5 billion.

The initial issuing entity is LABL Escrow Issuer, LLC, which is to be merged with and into W/S Packaging Holdings, Inc.

Multi-Color is a Cincinnati-based label maker. W/S Packaging is a Green Bay, Wis.-based provider of labels and packaging solutions.

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