Brand Energy ups term B to $1.28 billion, firms at Libor plus 375 bps

By Sara Rosenberg

New York, Nov. 25 - Brand Energy & Infrastructure Services Inc. upsized its seven-year covenant-light term loan B to $1,275,000,000 from $1,225,000,000 and firmed pricing at Libor plus 375 basis points, the wide end of the Libor plus 350 bps to 375 bps talk, according to a market source.

The 1% Libor floor, original issue discount of 991/2, 101 soft call protection for six months and amortization of 1% per annum were unchanged.

The company's upsized $1,575,000,000 senior secured credit facility (B1) also includes a $300 million five-year revolver that has a total senior secured leverage ratio covenant of 6 times when 25% is drawn.

Morgan Stanley Senior Funding Inc., Citigroup Global Markets Inc., Goldman Sachs Bank USA, UBS Securities LLC, HSBC Bank USA, ING Capital LLC, Natixis, RBS Securities Inc., Societe Generale, and SunTrust Robinson Humphrey Inc. are the joint lead arrangers and bookunners on the deal.

Proceeds will be used to help fund the buyout of the company by Clayton, Dubilier & Rice from First Reserve and the merger with an infrastructure business that is being bought from Harsco Corp.

Other funds for the transaction will come from $500 million of notes, downsized from $550 million with the term loan B upsizing, the source added.

The buyout of Brand Energy is for an undisclosed amount, and the purchase of the infrastructure business is for about $300 million, plus Harsco will receive a 29% equity stake in the combined company.

The enterprise value of the combined company is estimated to be about $2.5 billion, which includes $1.7 billion of debt financing.

Pro forma 2013 annual revenues for the combined company are estimated at nearly $3 billion, and EBITDA margin is anticipated to be in the low double digits.

Closing is expected by year-end, subject to customary conditions and regulatory approvals, as well as satisfactory conclusion of the relevant works council/trade union consultation procedures.

Brand Energy is an Atlanta-based provider of specialized industrial services to the energy and infrastructure sectors.

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