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Colfax cuts spread on $900 million term loan B to Libor plus 350 bps
By Sara Rosenberg
New York, Nov. 21 - Colfax Corp. trimmed pricing on its $900 million seven-year term loan B to Libor plus 350 basis points from Libor plus 375 bps, according to a market source.
In addition, the Libor floor was reduced to 1% from 1.25%, the source said.
As before, the B loan has an original issue discount of 99 and 101 soft call protection for one year.
Recommitments were due at the end of the day Monday. Initially, the commitment deadline had been set for Nov. 23.
The company's $2.1 billion credit facility (Ba2/BB+) also provides for a $300 million revolver, a $200 million term loan A-1 and a $700 million term loan A-2, all talked at Libor plus 300 bps.
Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc. are the joint lead arrangers. Barclays Capital, SunTrust Robinson Humphrey, RBS Securities Inc. and KeyBanc Capital Markets are agents.
Financial covenants include a maximum total leverage ratio and a minimum interest coverage ratio.
Proceeds will be used to help fund the purchase of Charter International plc for 910p per share, or roughly $14.45, comprised of 730p in cash and a fixed ratio of 0.1241 of a Colfax common share per share. The total consideration is $2.43 billion.
Other funds for the transaction will come from $805 million of new equity from some existing shareholders and BDT Capital Partners.
Closing is expected in the first quarter of 2012, subject to approval of both companies' shareholders, court approval in Jersey and other terms and conditions.
Colfax is a Fulton. Md.-based supplier of fluid-handling products, including pumps, fluid-handling systems and controls, and specialty valves. Charter International is a Dublin-based owner of ESAB, a welding, cutting and automation business.
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