By Paul A. Harris
Portland, Ore., Oct. 22 – LABL, Inc. priced a downsized $960 million of high-yield notes backing the acquisitions of Multi-Color Corp. and Fort Dearborn Co. by Clayton Dubilier & Rice, LLC (CD&R), according to market sources.
The two-part deal, which priced Friday, featured a downsized $500 million tranche of 5 7/8% seven-year senior secured notes (B2/B-) that priced at 99.293 to yield 6%. The tranche size decreased from $750 million.
It also featured a $460 million tranche of eight-year senior unsecured notes (Caa2/CCC+) that priced at par to yield 8¼%.
Pricing on both tranches widened while the deal was in the market.
The 5 7/8% secured notes priced in the middle of final yield talk in the 6% area, which had widened from earlier guidance of 5½% to 5¾%. The 8¼% unsecured notes priced at the wide end of the 8% to 8¼% final yield talk, which had widened from early guidance of 7¾% to 8%.
In addition to wider pricing, both tranches of the deal underwent covenant changes.
The overall amount of issuance decreased from $1.21 billion, with $250 million of proceeds shifted to a concurrent term loan.
Goldman Sachs & Co. LLC was the left bookrunner. Joint bookrunners were BofA Securities Inc., Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., RBC Capital Markets LLC, UBS Securities LLC, Wells Fargo Securities LLC, HSBC Securities (USA) Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., KKR Capital Markets LLC, Mizuho Securities USA Inc., MUFG and Truist Securities Inc.
Proceeds will be used to help fund CD&R's acquisition of Multi-Color from Platinum Equity and Fort Dearborn from Advent International, and to put cash on the balance sheet.
Both target entities are label manufacturers that will be combined into a single company called LABL following the acquisition, which is expected to close by the end of 2021.
The combined company is expected to generate about $3 billion of annual revenue.
| Issuer: | LABL, Inc.
|
| Amount: | $960 million, decreased from $1.21 billion
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| Left bookrunner: | Goldman Sachs & Co. LLC
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| Joint bookrunners: | BofA Securities Inc., Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., RBC Capital Markets LLC, UBS Securities LLC, Wells Fargo Securities LLC, HSBC Securities (USA) Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., KKR Capital Markets LLC, Mizuho Securities USA Inc., MUFG and Truist Securities Inc.
|
| Trade date: | Oct. 22
|
| Settlement date: | Oct. 29
|
| Distribution: | Rule 144A and Regulation S
|
| Marketing: | Roadshow
|
|
|
| Secured notes
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| Amount: | $500 million, decreased from $750 million
|
| Maturity: | Nov. 1, 2028
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| Securities: | Senior secured notes
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| Coupon: | 5 7/8%
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| Price: | 99.293
|
| Yield: | 6%
|
| Call protection: | Three years
|
| Ratings: | Moody's: B2
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| S&P: B-
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| Price talk: | 6% area
|
|
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| Unsecured notes
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| Amount: | $460 million
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| Maturity: | Nov. 1, 2029
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| Securities: | Senior notes
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| Coupon: | 8¼%
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| Price: | Par
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| Yield: | 8¼%
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| Call protection: | Three years
|
| Ratings: | Moody’s: Caa2
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| S&P: CCC+
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| Price talk: | 8% to 8¼%
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