Nalco Holding bounces around; ConvergEx steady on acquisition news; Autoparts tweaks discount

By Sara Rosenberg

New York, July 20 - Nalco Holding Co.'s term loan B-1 headed lower on Wednesday and its term loan C-1 moved higher - with both converging towards par - after word emerged that the company is being acquired by Ecolab Inc.

Meanwhile, ConvergEx Holdings LLC's first-lien term loan was unchanged on its buyout announcement, and levels on its second-lien term loan were nowhere to be found due to confusion over the take out price on that debt.

Moving to the primary, Autoparts Holdings Ltd. tightened the original issue discount on its first-and second-lien term loans as a result of strong investor demand, while Hawaiian Telcom Holdco Inc. ended up removing its refinancing credit facility from market due to unfavorable conditions.

Additionally, Clement Pappas and Co. Inc., Phillips Plastics Corp. and Amneal Pharmaceuticals LLC came out with price talk on their credit facilities as the deals were launched to investors during market hours.

Nalco moves on buyout

Nalco's term loan B-1 and term loan C-1 both headed towards par as the company announced that it is being purchased by Ecolab for about $5.4 billion, plus the assumption of $2.7 billion of debt.

The term loan B-1 was quoted by one trader at par bid, par ½ offered, down from par 3/8 bid, par 7/8 offered, and by a second trader at par 1/8 bid, par ½ offered, down from par ¾ bid, 101¼ offered.

As for the term loan C-1, that was quoted by the first trader at 99 5/8 bid, par 1/8 offered, up from 99 3/8 bid, 99 7/8 offered, and by the second trader at 99 7/8 bid, par 1/8 offered, up from 99½ bid, 99 7/8 offered.

Nalco purchase details

Under the acquisition agreement, Nalco's shareholders may elect to receive either 0.7005 share of Ecolab common stock or $38.80 in cash per share. The overall mix of consideration paid to Nalco shareholders will be approximately 30% cash and 70% stock.

In total, Ecolab, a St. Paul, Minn.-based provider of cleaning, sanitizing, food safety and infection prevention products and services, will issue 68.9 million shares of stock and pay roughly $1.6 billion in cash.

Nalco, a Naperville, Ill.-based sustainability services company focused on industrial water, energy and air applications, expects the transaction to close in the fourth quarter, subject to customary regulatory and shareholder approvals.

Nalco releases numbers

Also on Wednesday, Nalco came out with preliminary second quarter results that showed sales of $1.2 billion, a 16% increase over the prior year, excluding the one-time sales of $70 million from the Gulf of Mexico response efforts in the year ago period.

Estimated adjusted EPS is $0.47 per share, compared to $0.41 cents in second quarter of 2010.

And, estimated adjusted EBITDA is $175 million, up 13% from last year, excluding $44 million of adjusted EBITDA in the year-ago period associated with the above mentioned one-time sales.

Furthermore, the company raised full-year adjusted EBITDA guidance to $740 million from $735 million, and full-year adjusted EPS guidance to$1.70 per share from $1.65 per share, excluding merger-related expenses.

ConvergEx first-lien steady

ConvergEx's first-lien term loan held flat at 99 7/8 bid, par ¼ offered after the company said that it is being bought out by CVC Capital Partners from GTCR since lenders are expecting a par paydown, according to a trader.

However, levels on the second-lien term loan were not seen because investors aren't sure of the price at which they will be taken out.

"It has hard call protection for voluntary prepayments. This may be a mandatory prepayment because of change of control, which would be a par takeout. No one quoting this until it gets figured out," the trader explained about the second-lien loan.

ConvergEx plans new facility

To help fund its buyout, ConvergEx expects to get a new credit facility that is being led by Bank of America Merrill Lynch, Barclays Capital Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. Inc. and Citigroup Global Markets Inc.

With this transaction, the Bank of New York Mellon Corp. will remain as a minority shareholder in the company and the existing management team will remain substantial shareholders.

Closing on the acquisition is expected in the early fall, subject to the receipt of financing and customary regulatory approvals.

ConvergEx is a New York-based technology company providing mission-critical proprietary software products and technology-enabled services to asset managers and financial intermediaries.

Autoparts modifies OID

Continuing on the topic of new deals, Autoparts Holdings moved the original issue discount on its $530 million six-year first-lien term loan (B1/B+) and $150 million 61/2-year second-lien term loan (Caa1/B-) to 99½ from 99, according to a market source, who said that all other terms of the deal were left unchanged.

The first-lien term loan is priced at Libor plus 500 basis points and provides for 101 soft call protection for one year, and the second-lien term loan is priced at Libor plus 900 bps and has call protection of 103 in year one, 102 in year two and 101 in year three. Both tranches have a 1.5% floor.

The company's $730 million senior secured credit facility also includes a $50 million five-year revolver (B1/B+) priced at Libor plus 500 bps with a 1.5% Libor floor.

Recommitments were due by 5 p.m. ET on Wednesday.

Autoparts lead banks

Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc. and Nomura are the joint lead arrangers on Autoparts' credit facility that will be used to fund the acquisition of the company by Rank Group from Honeywell in a cash transaction valued at about $950 million.

Other funds for the purchase will come from about $307 million of equity,

Closing is expected in the third quarter, subject to regulatory approval and customary conditions. It is not subject to financing.

Autoparts is a Danbury, Conn.-based supplier to the light- and heavy-duty vehicle aftermarket for replacement parts.

Hawaiian withdraws deal

Hawaiian Telcom, a Honolulu, Hawaii-based provider of integrated communications services, pulled its $330 million refinancing credit facility due to market conditions, according to a market source.

Another source explained that "the current challenging market conditions led to a change in the economics and made it unattractive for the company to proceed with a transaction at this time."

The facility consisted of a $300 million six-year term loan (B1/B-) talked at Libor plus 550 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and a $30 million revolver (Ba1/B+).

The deal was going to refinance a $300 million term loan due Oct. 28, 2015 priced at Libor plus 600 bps with a 3% Libor floor and a $30 million revolver priced at Libor plus 400 bps with a 1.5% floor.

Credit Suisse Securities (USA) LLC was the lead arranger on the term loan, and First Hawaiian Bank was providing the revolver.

Clement talk emerges

In more primary happenings, Clement Pappas held a bank meeting on Wednesday morning to launch its proposed $230 million six-year term loan B (B2), at which time talk of Libor plus 525 bps with a 1.25% Libor floor, an original issue discount of 99 and 101 soft call protection for one year was released, according to a market source.

Commitments towards the term loan B are due on Aug. 3, the source added.

The company's $280 million credit facility also includes a $50 million five-year ABL revolver.

Jefferies & Co. and BMO Capital Markets Corp. are the lead banks on the deal, with Jefferies running the term loan and BMO running the revolver.

Clement funding buyout

Proceeds from Clement Pappas' credit facility will be used to help fund its acquisition by Lassonde Industries Inc. for a total cash consideration of $390 million payable at closing, subject to adjustments for working capital and other items.

Closing is expected in August, subject to customary terms and conditions, including a breakup fee and receipt of regulatory approvals.

Pro forma senior leverage is around 4.25 times.

Clement Pappas is a Carneys Point, N.J.-based producer of store brand ready-to-drink fruit juices, drinks and sauces. Lassonde Industries is a Quebec-based developer, manufacturer and marketer of fruit and vegetable juices and drinks as well as specialty food products.

Phillips Plastics guidance

Also launching with a bank meeting was Phillips Plastics' $245 million credit facility, and price talk on the deal was announced as Libor plus 500 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

The facility consists of a $45 million revolver and a $200 million term loan.

GE Capital Markets and BNP Paribas Securities Corp. are the lead banks on the deal that will be used to fund an acquisition.

Phillips Plastics is a Hudson, Wis.-based outsource provider of design and manufacturing services to the commercial and medical device and drug delivery markets.

Amneal launches deal

Amneal Pharmaceuticals launched on Wednesday its $250 million credit facility - comprised of a $70 million revolver and a $180 million term loan A - with price talk of Libor plus 325 bps with no Libor floor, according to a market source.

GE Capital Markets and RBS Citizens are the lead banks on the deal that will be used to refinance existing debt.

Leverage is 3.1 times.

Amneal Pharmaceuticals is a Bridgewater N.J.-based generic pharmaceuticals company.

SRA International closes

In other news, the buyout of SRA International Inc., a Fairfax, Va.-based provider of technology and strategic consulting services to government organizations and commercial clients, by Providence Equity Partners for $31.25 in cash per share has been completed, according to a news release.

With the transaction, SRA got a new $975 million senior secured deal (B1/B) consisting of a $100 million five-year revolver, and an $875 million seven-year term loan priced at Libor plus 525 bps with a 1.25% Libor floor, and sold at a discount of 95. The term loan has 101 soft call protection for one year.

During syndication, term loan pricing was increased from talk of Libor plus 425 bps to 450 bps, the Libor floor was cut from 1.5% and the discount widened from 99.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. led the deal.

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