DMT Solutions cuts term loan to $250 million, flexes pricing higher

By Sara Rosenberg

New York, June 20 – DMT Solutions Global Corp. downsized its term loan to $250 million from $260 million and increased pricing to Libor plus 700 basis points from talk in the range of Libor plus 575 bps to 600 bps, according to a market source.

In addition, the original issue discount on the term loan was changed to 97 from 99, the call protection was revised to a hard call of 102 in year one and 101 in year two from a 101 soft call for one year, and the maturity was shortened to six years from seven years, the source said.

Also, amortization on the term loan was modified to 5% per year from 1% per year, and the MFN is now 50 bps for life on all pari debt with no carve-outs instead of 75 bps for six months.

The incremental was changed to the greater of $45 million and 0.75 times LTM EBITDA, with unlimited secured debt subject to 0.5 times below closing leverage and unlimited junior debt subject to 0.5 times above closing leverage, from the greater of $60 million and 1 times LTM EBITDA, with unlimited secured debt subject to closing leverage and unlimited junior debt subject to 1 times above closing leverage.

The general restricted payment basket was reduced to $5 million from $30 million, the available amount basket was revised to $25 million, with the use of starter and grower now subject to 0.5 times below closing total leverage, from $15 million, and the junior debt repayment basket was lowered to $10 million from $30 million, the source continued.

Furthermore, the excess cash flow sweep was increased to 75%, stepping down at 0.5 times, 1 times and 1.5 times below closing leverage from 50%, stepping down at 0.5 times and 1 times below closing leverage, the asset sale step-downs were removed, and the management fee was trimmed to $3 million per year from $5 million per year.

The term loan still has a 0% Libor floor.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Goldman Sachs Bank USA and KeyBanc Capital Markets are the bookrunners on the deal.

Commitments are due at noon ET on Friday.

Proceeds will be used with $110 million in equity, up from $104 million, to fund the buyout of the company by Platinum Equity from Pitney Bowes Inc. for $361 million.

Closing is expected in the second quarter or early in the third quarter, subject to customary conditions.

Total leverage is 4.2 times, down from 4.4 times under the original structure, the source added.

DMT is a provider of global enterprise solutions for mail inserting, parcel sorting and printing equipment and services.

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