Jostens IH price talk hits market as launch nears; Aquila syndication may be dependent on revolver success

By Sara Rosenberg

New York, Sept. 3 - Price talk on Jostens IH Corp.'s $1.27 billion credit facility surfaced as the syndicate is gearing up for the launch during the Sept. 6 week. Meanwhile, although Aquila Inc.'s credit facility is expected to get done, the combination of an approximately one week syndication process and the addition of a revolver into the mix may complicate matters slightly.

For the first time since the deal was first announced in July, price talk has come out on Jostens IH's proposed credit facility (B+) as Thursday's bank meeting is fast approaching, with the $870 million seven-year term loan B talked at Libor plus 275 basis points, the $150 million six-year term loan A talked at Libor plus 250 basis points and the $250 million five-year revolver talked at Libor plus 250 basis points with a 50 basis point commitment fee, according to a market source.

Credit Suisse First Boston is the sole lead arranger and bookrunner on the deal. Deutsche Bank and Bank of America are involved in the deal in agent roles as well.

Proceeds from the credit facility will be used to help fund Kohlberg Kravis Roberts & Co.'s $2.2 billion combination of Jostens Inc., Von Hoffman Corp. and Arcade Marketing into one large company.

KKR will acquire Von Hoffmann and Arcade from DLJ Merchant Banking Partners, and Von Hoffmann and Arcade will contribute to Jostens Holdings in exchange for stock of Jostens Holdings, which will then be recapitalized. Upon completion of these transactions, KKR and DLJ Merchant Banking will each own a 45% stake of Jostens Holdings, which will be renamed. The remaining 10% stake will be held by the management team as well as a small group of existing minority investors in Jostens.

The transaction is expected to close this fall and is subject to customary closing conditions.

Jostens is a Minneapolis provider of yearbooks, class rings and graduation products. Von Hoffman is a St. Louis printer of educational textbooks and supplemental materials and direct marketing print services. Arcade is a New York printer and manufacturer of sampling products for the fragrance, cosmetics, consumer products, and food and beverage industries.

Aquila seeks revolver lenders

Aquila is basically approaching existing lenders on Wednesday about a proposed $300 million unsecured working capital facility, but the company is seeking to raise $100 million of that facility in a revolver, something that is not common practice for Aquila.

"The revolver adds a curveball because existing lenders are term loan lenders, but I think it should go fine. I think there are some big tickets pending," a market source said.

Furthermore, the facility needs to be funded by Sept. 16 so the syndication process is hoped to be a short one since the syndicate will not fund the deal until it is syndicated, the source added.

Both the revolver and the $200 million are talked at Libor plus 575 basis points, with the revolver also containing a 100 basis point commitment fee.

Credit Suisse First Boston is the lead bank on the deal that will be used help retire Aquila's existing $430 million secured credit facility.

Aquila is a Kansas City, Mo., operator of electricity and natural gas distribution utilities and owner of power generation assets.

Primary picking up

After about two weeks or so of few new deal launches, the Sept. 6 week will be a nice change of pace for investors as bank meetings have been scheduled for a number of deals including the previously mentioned Jostens IH and Aquila credit facilities, as well as Knoll Inc., Bell Sports Corp. and Raycom Media Inc. - with Thursday, so far, taking the role as the most prominent launch day.

Knoll's $500 million credit facility (BB-), set to launch Thursday, consists of a $75 million revolver and a $425 million term loan, both expected to price in the Libor plus 250 basis points context.

UBS Securities LLC and Goldman Sachs are the lead banks on the refinancing and dividend payment deal, with UBS listed on the left.

Knoll is an East Greenville, Pa., designer and manufacturer of branded office furniture products and textiles.

Bell Sports joins friends Knoll and Jostens with a Thursday launch of its $160 million credit facility consisting of a $50 million revolver with price talk of Libor plus 275 basis points and a $110 million term loan with price talk of Libor plus 300 basis points.

Goldman Sachs and Wachovia are joint leads on the deal, with Goldman listed on the left. UBS will be involved in the transaction as well.

Proceeds, combined with proceeds from a proposed $150 million bond deal, will be used to help fund Fenway Partners Inc.'s acquisition of Bell Sports. Under the acquisition agreement, Fenway will purchase Bell Sports from an investor group including GarMark Partners LP, Wachovia Investors Inc. and Chartwell Investors, for about $240 million. The transaction will merge Bell Sports and Riddell Sports Group, which Fenway purchased in June 2003.

Bell Sports is an Irving, Texas, marketer of helmets and accessories for bicycling and other action sports. Riddell is a Chicago provider of football helmets and other branded sporting goods, equipment reconditioning services and sports collectibles.

Meanwhile, Raycom Media opted to go with a Friday bank meeting to launch its $700 million credit facility consisting of a $150 million seven-year revolver with an interest rate of Libor plus 175 basis points, a $400 million seven-year term loan A with an interest rate of Libor plus 175 basis points and a $150 million 71/2-year term loan B with an interest rate of Libor plus 175 basis points.

Wachovia is the lead bank on the Montgomery, Ala., television broadcaster's refinancing deal.

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