Dell up with acquisition news; FullBeauty revised; Lannett, XPO, Talen, Plaskolite set talk

By Sara Rosenberg

New York, Oct. 13 – Dell Inc.’s term loan headed higher in the secondary market on Tuesday on the back of the company’s announcement that it is purchasing EMC Corp.

Meanwhile, in the primary market, FullBeauty Brands increased spreads on its first- and second-lien term loans, widened original issue discounts and modified the call protection on the second-lien debt.

Also, Lannett Co. Inc., XPO Logistics Inc., Talen Energy Supply LLC and Plaskolite released price talk with launch, and eBay Enterprise Omni-Channel Logistics and Solutions Inc. and Pilot Travel Centers LLC joined this week’s calendar.

Dell gains ground

Dell’s term loan was stronger in trading on Tuesday with news that the company is buying EMC Corp. in a transaction valued at about $67 billion, according to a trader.

The term loan was quoted at 99½ bid, par offered, up from 99 bid, 99½ offered, the trader said.

Dell is acquiring EMC for receive $24.05 per share in cash in addition to tracking stock linked to a portion of EMC’s economic interest in the VMware business. VMware will be maintained as a publicly traded company.

To fund the transaction, Dell Inc. has received a commitment for up to $49.5 billion in debt financing and up to $4.25 billion in equity. Also, the company plans to use cash on hand.

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Barclays, Bank of America Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs Bank USA and RBC Capital Markets are leading the debt.

Dell focuses on ratings

Dell revealed in a press release that the transaction is expected to have a neutral to positive impact on its current corporate credit ratings, and the plan is to rapidly delever in the first 18 to 24 and to focus on achieving and maintaining investment-grade debt ratings.

With the financing of the transaction, Dell expects to redeem any outstanding 5 5/8% senior first-lien notes due 2020.

Closing is expected in mid-2016, subject to EMC shareholder approval, regulatory approval and other customary conditions.

There is a “go shop” period until Dec. 11.

Dell is a Round Rock, Texas-based technology and services company. EMC is a Hopkinton, Mass.-based technology company. The combined enterprise systems business will be located in Hopkinton, Mass.

FullBeauty reworked

Moving to the primary market, FullBeauty Brands lifted pricing on its $820 million seven-year first-lien term loan (B1/B-) to Libor plus 475 basis points from Libor plus 450 bps and moved original issue discount talk to 92 to 93 from 99, while keeping the 1% Libor floor intact, according to a market source.

Also, pricing on the $345 million eight-year second-lien term loan (Caa1/CCC) was increased to Libor plus 900 bps from Libor plus 850 bps, the discount was changed to the 87 area from 98 to 98.5, and the call protection was adjusted to non-callable for one year, then at 102 in year two and 101 in year three, from 102 in year one and 101 in year two, the source said. This tranche still has a 1% Libor floor.

Furthermore, the company’s asset-based revolver was downsized to $100 million from $125 million, the MFN sunset was removed and the excess cash flow sweep was lifted to 75%.

Recommitments were due at 5 p.m. ET on Tuesday, the source added.

FullBeauty being acquired

Proceeds from FullBeauty’s now $1,265,000,000 credit facility will be used to help fund its buyout by Apax Partners LLP from Charlesbank Capital Partners and Webster Capital. However, Charlesbank will maintain a substantial ownership interest in the company.

J.P. Morgan Securities LLC, Goldman Sachs Bank USA, Jefferies Finance LLC and Deutsche Bank Securities Inc. are leading the deal, with JPMorgan left lead on the first-lien and Goldman left lead on the second-lien.

Closing is expected during the fourth quarter, subject to customary conditions.

FullBeauty Brands is a New York-based catalog retailer and online marketplace for plus-size consumers.

Lannett discloses talk

Lannett held its bank meeting on Tuesday, and in connection with the event, price talk on its $1,285,000,000 senior secured credit facility (B1) was announced, a source remarked.

The $1.16 billion seven-year covenant-light term loan B is talked at Libor plus 425 bps to 450 bps with a 1% Libor floor, an original issue discount of 98.5 and 101 soft call protection for six months, and the $125 million five-year revolver is talked at Libor plus 425 bps to 450 bps with no floor and a 50 bps undrawn fee, the source continued.

By comparison, the commitment letter had pricing on the term loan and revolver expected at Libor plus 425 bps, with the term loan having a 1% Libor floor and 101 soft call protection for six months.

Commitments are due on Oct. 27, the source added.

Lannett lead banks

Morgan Stanley Senior Funding Inc., RBC Capital Markets and Citigroup Global Markets Inc. are leading Lannett’s credit facility.

Proceeds will be used with cash on hand to fund the acquisition of Kremers Urban Pharmaceuticals Inc., the U.S. specialty generic pharmaceuticals subsidiary of biopharmaceuticals company UCB SA, for $1.23 billion plus potential contingency payments.

Closing is expected in the fourth quarter.

Lannett is a Philadelphia-based manufacturer of generic pharmaceutical products.

XPO launches

XPO Logistics disclosed guidance of Libor plus 400 bps to 425 bps with a 1% Libor floor, an original issue discount of 98.5 and 101 soft call protection for one year on its $1.75 billion six-year senior secured covenant-light term loan B (Ba1/BB-) that launched with a bank meeting during the session, according to a market source.

Commitments are due on Oct. 22, the source said.

Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC, Barclays, Deutsche Bank Securities Inc., HSBC Securities Inc. and Credit Agricole Securities Inc. are leading the deal that will be used to help fund the acquisition of Con-way Inc. for $47.60 per share, to refinance existing Con-way debt and for general corporate purposes. The total transaction value is about $3 billion, including $290 million of net debt.

Closing is expected this month, subject to completion of a tender offer for Con-way’s shares and customary conditions, including regulatory approvals.

XPO is a Greenwich, Conn.-based provider of supply chain solutions. Con-way is an Ann Arbor, Mich.-based transportation and logistics company.

Talen guidance emerges

Talen Energy Supply released talk of Libor plus 350 bps to 375 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months on its $400 million seven-year senior secured covenant-light term loan B (Baa2/BB) that launched with a morning bank meeting, according to a market source.

Commitments are due at 5 p.m. ET on Oct. 22, the source said.

Citigroup Global Markets Inc., MUFG, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Barclays and RBC Capital Markets are leading the deal, which will help fund the acquisition of MACH Gen LLC for $1,175,000,000 inclusive of any assumed debt, subject to customary purchase price adjustments.

Closing is expected in the fourth quarter, subject to regulatory approvals.

Talen is an Allentown, Pa.-based energy and power generation company. MACH Gen is an Athens, N.Y.-based operator of gas-fired generation plants.

Plaskolite reveals terms

Plaskolite also held a bank meeting, launching its $305 million seven-year covenant-light term loan (B1/B+) with talk of Libor plus 450 bps to 475 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source said.

The company’s $450 million credit facility also includes a $40 million five-year revolver (B1/B+) and a $105 million privately-placed second-lien term loan (Caa1/CCC+).

Commitments are due on Oct. 26 and closing is expected on Oct. 30, the source added.

Antares Capital and Keybanc Capital Markets are leading the deal that will be used to help fund the buyout of the company by Charlesbank Capital Partners.

Plaskolite is a Columbus, Ohio-based manufacturer of acrylics and other plastic products.

eBay Enterprise on deck

Also in the primary, eBay Enterprise set a bank meeting for 10:30 a.m. ET in New York on Thursday to launch $640 million in senior secured term loans, split between a $540 million first-lien term loan and a $100 million second-lien term loan, according to a market source.

Morgan Stanley Senior Funding Inc. and Credit Suisse Securities (USA) LLC are leading the deal.

Proceeds will be used to help fund the $925 million buyout of the company by Permira, Sterling Partners, Longview Asset Management, the Innotrac Corp., a Sterling Partners portfolio company, and companies owned by the Permira funds from eBay Inc.

Closing is subject to regulatory approvals and customary conditions.

eBay Enterprise is a King of Prussia, Pa.-based provider of retail-optimized commerce solutions, including the Magento platform, order management, fulfillment, customer care, and marketing solutions.

Pilot Travel plans call

Pilot Travel Centers scheduled a call for Wednesday for credit facility lenders, according to a market source, who said details on the purpose of the call are not yet available.

Bank of America Merrill Lynch, Wells Fargo Securities LLC, SunTrust Robinson Humphrey Inc. and U.S. Bank NA are leading the deal.

Pilot is a Knoxville, Tenn.-based operator of travel centers and travel plazas.

HelpSystems closes

In other news, the buyout of HelpSystems LLC by H.I.G. Capital from Summit Partners has been completed, a news release said.

To help fund the transaction, HelpSystems got a new $465 million credit facility consisting of a $35 million revolver (B2/B), a $300 million six-year first-lien term loan (B2/B) and a $130 million seven-year second-lien term loan (Caa2/CCC+).

Pricing on the first-lien term loan is Libor plus 525 bps with a 1% Libor floor, and it was sold at an original issue discount of 98. The debt has 101 call protection for one year.

The second-lien term loan is priced at Libor plus 950 bps with a 1% Libor floor, and was issued at a discount of 97. This tranche has call protection of 103 in year one, 102 in year two and 101 in year three.

HelpSystems preps allocations

Although the buyout closed, HelpSystems’ credit facility is not expected to allocate until Wednesday, a source remarked.

Credit Suisse Securities (USA) LLC and Antares Capital are the leads on the deal.

During syndication, pricing on the first-lien term loan was lifted from Libor plus 475 bps, the discount was revised from 99, the call protection was extended from six months and the maturity was shortened from seven years. Also, pricing on the second-lien term loan was increased from Libor plus 875 bps, the discount widened from 98.5, the call protection was sweetened from 102 in year one and 101 in year two, and the maturity was shortened from eight years.

HelpSystems is an Eden Prairie, Minn.-based provider of system and network management, business intelligence, and security and compliance solutions.

© 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.