Leidos Holdings plans $1.44 billion senior secured credit facility

By Sara Rosenberg

New York, April 18 – Leidos Holdings Inc. has received a commitment for a $1.44 billion five-year senior secured credit facility in connection with its merger with Lockheed Martin Corp.’s realigned Information Systems & Global Solutions business (Abacus Innovations Corp.), according to an S-4 filed with the Securities and Exchange Commission on Monday.

The facility consists of a $750 million revolver and a $690 million term loan A.

Proceeds will be used with cash on hand to pay a special dividend to Leidos stockholders in an amount not to exceed about $1.03 billion and to repay existing debt.

Additionally, Bethesda, Md.-based Abacus has received a commitment for a $1.841 billion senior secured credit facility that consists of a $400 million three-year term loan A, a $310 million five-year term loan A and a $1.131 billion seven-year term loan B.

Citigroup Global Markets Inc., MUFG, Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Goldman Sachs Bank USA are the lead banks on the Leidos and the Abacus credit facilities.

Proceeds from the Abacus credit facility will be used to make a special cash payment of $1.8 billion to Lockheed Martin.

The merger will result in Lockheed Martin shareholders receiving about 50.5% of the combined company on a fully diluted basis, with pre-transaction Leidos shareholders owning the balance.

Closing is expected in the second half of this year, subject to approval by the shareholders of Leidos, as well as regulatory approvals and customary conditions.

Leidos is a Reston, Va.-based provider of technology and sector expertise to customers in national security, health and engineering.

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