Olaplex closes $150 million five-year revolving credit facility

By Marisa Wong

Los Angeles, Feb. 23 – Olaplex, Inc., an indirect wholly owned subsidiary of Olaplex Holdings, Inc., entered into a credit agreement on Feb. 23 for a $150 million revolving credit facility and previously announced term B loans totaling $675 million, according to an 8-K filing with the Securities and Exchange Commission.

Penelope Intermediate Corp. is the parent guarantor.

Goldman Sachs Bank USA is administrative agent, collateral agent and swingline lender.

The credit agreement replaces the Olaplex’s credit agreement dated Jan. 8, 2020 with MidCap Financial Trust as administrative agent and collateral agent.

The revolver is available in dollars and euros.

The revolver contains a $25 million letter-of-credit sub-facility and a $25 million swingline sub-facility.

The revolver matures on Feb. 23, 2027.

Borrowings under the revolver bear interest at adjusted SOFR (Euribor for euro-denominated loans), subject to a floor of zero, plus 375 basis points, with a 25-bps step-down tied to achieving a first-lien net leverage ratio of 1.2 times.

The company must pay a quarterly commitment fee on the average daily amount of the unused revolving commitments. The commitment fee is 50 bps if the company’s first-lien leverage ratio is greater than 1.2 to 1.0, 37.5 bps if the ratio is less than or equal to 1.2 to 1.0 but greater than 0.7 to 1.0 and 25 bps if the ratio is less than or equal to 0.7 to 1.0.

The credit agreement contains a springing first-lien leverage ratio financial covenant, which is applicable only to the lenders under the revolver.

As previously reported, Olaplex finalized pricing on its seven-year term loan B at SOFR plus 375 basis points, the low end of the SOFR plus 375 bps to 400 bps talk.

Also, the original issue discount on the term loan was changed to 99.75 from 99.5, according to a market source.

The term loan still has a 25 bps step-down at 0.5x inside closing date first-lien net leverage, a 0.5% floor, 101 soft call protection for six months and amortization of 1% per annum.

At closing, the full amount of the term B loans were drawn but the revolver was undrawn. The amounts drawn under the credit facilities at closing were used to repay all of the term loans outstanding under the 2020 credit agreement and to pay related fees and expenses.

Goldman Sachs, JPMorgan Chase Bank, Morgan Stanley Senior Funding Inc., Barclays, BofA Securities Inc., Jefferies LLC and Truist are the bookrunners on the deal.

Olaplex is a hair care company based in Santa Barbara, Calif.

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