Acosta Sales rises with buyout; CommScope, SourceMedia, Electrical Components set talk

By Sara Rosenberg

New York, Jan. 5 - Acosta Sales & Marketing's term loan gained some ground in trading on Wednesday as the company confirmed recent rumors by announcing that it is being acquired by Thomas H. Lee Partners.

Over in the primary market, CommScope Inc., SourceMedia Inc. and Electrical Components International came out with price talk on their bank deals as the transactions were presented to lenders during the session.

Acosta Sales strengthens

Acosta Sales & Marketing's term loan headed higher in the secondary market in reaction to news that the company is being bought out by Thomas H. Lee Partners from AEA Investors in a transaction that is expected to close within the next 60 days, according to a trader.

The term loan was quoted at 99 7/8 bid, par 1/8 offered, up from 99 3/8 bid, 99 7/8 offered, the trader said.

Committed debt financing for the acquisition is being provided by affiliates of Goldman Sachs, including its principal mezzanine and loan funds, and Barclays. Goldman Sachs has also committed to make an equity investment in Acosta.

The debt financing is anticipated to include a new credit facility, a market source added.

Acosta is a Jacksonville, Fla.-based sales and marketing agency in the consumer packaged goods industry.

CommScope guidance emerges

Moving to the primary, CommScope held a bank meeting on Wednesday morning to kick off syndication on its proposed $1 billion seven-year covenant-light term loan (Ba3/BB), and in connection with the event, price talk was announced, according to market sources.

The term loan was launched at Libor plus 400 basis points with a 1.5% Libor floor and an original issue discount of 99, sources said. There is 101 soft call protection for one year.

Commitments are due on Jan. 11, and closing and funding is expected to occur on Jan. 14.

The company's $1.4 billion senior secured credit facility also includes a $400 million asset-based revolver that was already presented to lenders on Dec. 8.

JPMorgan is the lead bank on the deal that will be used to help fund the acquisition of the company by the Carlyle Group for $31.50 per share in cash. The transaction is valued at $3.9 billion.

CommScope getting notes

Other funding for the buyout of CommScope will come from senior notes, which are expected to price next week, and equity.

Initially, it was thought that the company would get $2.25 billion of bonds for the transaction. Then, it was revealed that the debt could come in the form of notes and a term loan. And, this week, it was disclosed that the company is actually roadshowing $1.5 billion of bonds in addition to the $1 billion term loan - a $250 million increase from what was originally proposed.

Under the original financing plans, the company had said that the equity portion would be $1.75 billion and that $215 million could be drawn under the revolver for the buyout. As a result of the upsizing of bond/term loan debt, the equity portion is being reduced to $1.6 billion.

CommScope leverage multiples

At close, secured leverage will be around 2.5 times and total leverage will be around 5.5 times, sources said.

The term loan has already seen a good amount of interest from investors with a bunch of early orders being placed, one source remarked.

"People have known about it for a while. Not a lot of deals in the market. Accounts have a lot of cash on their plate right now, so they've been looking at this one," the source added.

Closing on the acquisition is expected to occur in the first quarter. Stockholder approval for the buyout was obtained on Dec. 30, and the company was granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in November.

CommScope is a Hickory, N.C.-based provider of infrastructure services for communication networks.

SourceMedia reveals pricing

Another deal to come out with price talk in connection with its launch on Wednesday was SourceMedia, as its $170 million credit facility (B1) was presented at Libor plus 525 bps with a 1.5% Libor floor and an original issue discount of 981/2, according to a market source.

The facility is comprised of a $25 million revolver and a $145 million term loan.

Citigroup, GE Capital and BMO are the lead banks on the deal that will be used to refinance existing debt.

SourceMedia is a New York-based provider of news, analysis, research, data and insights for members of the financial services community and related fields in professional services and technology.

Electrical Components talk

Electrical Components also held a bank meeting on Wednesday, at which time it launched its $160 million term loan with talk of Libor plus 500 bps to 525 bps with a 1.5% Libor floor and an original issue discount of 981/2, according to sources.

Credit Suisse is the lead bank on the $190 million credit facility, which also includes a $30 million revolver.

Proceeds will be used to refinance existing debt.

Electrical Components is a St. Louis-based provider of wire harnesses, subassemblies and assembly services.

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