Ultimate Software talks $2.3 billion loan at Libor plus 400-425 bps

By Sara Rosenberg

New York, March 28 – Ultimate Software Group Inc. launched on Thursday its $2.3 billion seven-year covenant-lite first-lien term loan with price talk of Libor plus 400 basis points to 425 bps with a 0% Libor floor and an original issue discount of 99.5, according to a market source.

The term loan has 101 soft call protection for six months.

The company’s $2,575,000,000 of first-lien credit facilities (B2/B) also include a $275 million revolver.

Credit Suisse Securities (USA) LLC, Nomura, Bank of America Merrill Lynch, BNP Paribas Securities Corp. and Ares are the lead arrangers on the deal.

Commitments are due at 5 p.m. ET on April 11.

Proceeds will be used to help fund the buyout of the company by an investor group led by Hellman & Friedman for $331.50 per share in cash, representing an aggregate value of about $11 billion.

The Hellman & Friedman-led investor group includes Blackstone, GIC, Canada Pension Plan Investment Board and JMI equity.

Other funds for the transaction will come from a $900 million privately placed second-lien term loan and up to $8,133,000,000 of equity.

Ares and GSO provided the second-lien loan commitment.

Closing is expected in mid-2019, subject to stockholder approval, regulatory approvals and other customary conditions.

Ultimate Software is a Weston, Fla.-based provider of human capital management solutions in the cloud.

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