Ultimate Software flexes $2.3 billion term loan to Libor plus 375 bps

By Sara Rosenberg

New York, April 5 – Ultimate Software Group Inc. lowered pricing on its $2.3 billion seven-year covenant-lite first-lien term loan to Libor plus 375 basis points from talk in the range of Libor plus 400 bps to 425 bps and added a 25 bps step-down at 5 times total net leverage, according to a market source.

Also, the original issue discount on the term loan was changed to 99.75 from 99.5, the source said.

The term loan still has a 0% Libor floor and 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.

Recommitments were scheduled to be due at 5 p.m. ET on Friday, the source added.

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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