US LBM lifts funded term loan to $1.35 billion, trims pricing

By Sara Rosenberg

New York, Dec. 8 – US LBM (LBM Acquisition LLC) upsized its funded seven-year senior secured term loan B to $1.35 billion from $1.2 billion, according to a market source.

Pricing on the funded term loan and on the $300 million delayed-draw term loan was reduced to Libor plus 375 basis points from Libor plus 450 bps, and the original issue discount firmed at 99, the tight end of the 98.5 to 99 talk, the source said.

Ticking fees on the delayed-draw term loan were changed to half the margin from days 46 to 90 and the full margin thereafter, from half the margin from days 61 to 120 and Libor plus the full margin thereafter.

Also, the MFN was revised to 75 bps for six months from 100 bps for six months, and the company added “Chewy” protection language for the release of guarantees subject to bona fide business purpose restriction.

As before, the term loan debt has a 0.75% Libor floor and 101 soft call protection for six months.

The delayed-draw term loan is available for 24 months, subject to pro forma first-lien net leverage of 4.50x, or if used to finance an acquisition or to refinance a replenishment of cash on hand or revolving facility used to consummate an acquisition, the pro forma first-lien net leverage shall be “no worse than” immediately prior.

Barclays, BofA Securities Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets, Truist, Deutsche Bank Securities Inc. and U.S. Bank are the bookrunners on the now $1.65 billion of term loans (B2/B/B+), up from $1.5 billion. Barclays is the administrative agent.

Books were scheduled to close at 2 p.m. ET on Tuesday, the source continued.

Proceeds will be used to help fund the buyout of the company by Bain Capital Private Equity.

Other funds for the transaction will come from $550 million of unsecured notes, upsized from $390 million.

Closing is expected in December, subject to customary conditions, including regulatory approvals.

Due to the funded term loan and notes upsizings, $169 million of the previously planned closing date ABL draw will not be needed, leaving $6 million drawn on the ABL at closing, and $141 million of the additional proceeds raised will be used to fund two additional acquisitions under letters of intent that are expected to contribute a total of about $26 million of EBITDA (including synergies) and close by year-end, the source added.

US LBM is a Buffalo Grove, Ill.-based distributor of specialty building materials.

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