APi Group launches $300 million term loan at 99.5-99.75 OID

By Sara Rosenberg

New York, Feb. 28 – APi Group DE Inc. launched without a lender call on Wednesday a fungible $300 million incremental covenant-lite term loan B due Jan. 3, 2029 that is talked with an original issue discount of 99.5 to 99.75, according to a market source.

Pricing on the incremental term loan B is SOFR+CSA plus 250 basis points with a 0% floor, in line with existing 2029 term loan pricing.

CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Expected term loan ratings are Ba1/BB-.

Citigroup Global Markets Inc. is the lead arranger on the deal and the administrative agent.

Commitments are due at 5 p.m. ET on Thursday, with allocations expected on Friday, the source added.

Proceeds will be used with cash on hand and a revolving credit facility draw to repurchase a portion of the company’s conversion shares from Blackstone and Viking’s outstanding series B perpetual convertible preferred stock.

The company will issue to the series B holders an aggregate of 32,803,519 shares of common stock upon conversion, and immediately thereafter repurchase an aggregate of 16,260,160 shares of common stock from the series B holders for a price of $36.90 per share, for an aggregate purchase price of $600 million, with Blackstone receiving $450 million in value and Viking receiving $150 million in value, the company disclosed in an 8-K filed with the Securities and Exchange Commission.

“The series B transaction represents another step in our journey to drive value for our investors by simplifying our capital structure, reducing our adjusted diluted share count, and providing immediate accretion to adjusted earnings per share, while having no impact on our focus on opportunistic M&A,” said Russ Becker, APi’s president and chief executive officer, in a news release.

The company reported 2023 fourth quarter numbers on Wednesday morning, with net revenues at $1.759 billion, up from $1.703 billion in the fourth quarter of 2022, adjusted net income at $120 million, or $0.44 adjusted diluted earnings per share, compared to adjusted net income of $98 million, or $0.36 adjusted diluted earnings per share, in the prior year, and adjusted EBITDA at $208 million, versus $183 million in the comparable period in 2022.

APi is a New Brighton, Minn.-based business services provider of safety, specialty and industrial services.

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