McAfee plans $9.98 billion of new debt financing for buyout

By Sara Rosenberg

New York, Nov. 8 – McAfee Corp. has received a commitment for $7.66 billion of credit facilities and a $2.32 billion senior unsecured bridge facility to help fund its acquisition by an investor group led by Advent International Corp., Permira Advisers LLC, Crosspoint Capital Partners, Canada Pension Plan Investment Board, GIC Private Ltd. and Abu Dhabi Investment Authority, according to an 8-K filed with the Securities and Exchange Commission on Monday.

JPMorgan Chase Bank, BofA Securities Inc., Credit Suisse, Barclays, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., RBC Capital Markets, CPPIB Credit Investments III Inc., UBS Securities LLC and PSP Investments Credit II USA LLC provided the debt commitment.

The credit facilities consist of a $1 billion first-lien cash flow revolver and a $6.66 billion first-lien term loan.

The bridge facility may be replaced with senior notes.

Other funds for the transaction will come from $5.2 billion of equity.

Also, PSP Investments Credit USA LLC and investment funds managed by Neuberger Berman have agreed to provide the investor group with preferred equity financing with an aggregate liquidation preference of up to $800 million, subject to customary conditions.

Under the agreement, McAfee is being bought for $26.00 per share in an all-cash transaction valued at about $12 billion on an equity value basis, and over $14 billion on an enterprise value basis after giving effect to repayment of McAfee debt.

There is a 45-day “go shop” period.

Closing is expected in the first half of 2022, subject to customary conditions, including approval by McAfee shareholders, receipt of regulatory approvals, and clearance by the Committee on Foreign Investment in the U.S.

McAfee is a San Jose, Calif.-based provider of online protection for consumers.

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