Franchise, DRW Holdings, Wedgewood, DiversiTech, Science, Novolex, Infinite, Hillman break

By Sara Rosenberg

New York, Feb. 24 – Franchise Group Inc. lowered the spread on its first-lien term loan B, DRW Holdings LLC firmed pricing on its first-lien term loan at the low end of talk and Wedgewood Pharmacy trimmed the spread on its term loan B, and then all of these deals made their way into the secondary market on Wednesday.

Other deals to free up for trading during the session included DiversiTech Holdings Inc., Science Applications International Corp., Novolex Holdings LLC, Infinite Electronics (Infinite Bidco LLC) and Hillman Group Inc.

In more happenings, Petco Health and Wellness Co. Inc. set pricing on its first-lien term loan B at the low side of talk and tightened the original issue discount, and Kodiak Building Partners increased the size of its term loan B and trimmed the spread.

Also, Anthology finalized the spread on its first-lien term loan at the narrow end of guidance, and Renaissance Learning (Renaissance Holding Corp.) moved up the commitment deadline for its first-and second-lien term loans.

Furthermore, Leslie’s Poolmart Inc., DuPage Medical Group (Midwest Physician Administrative Services LLC), Go Daddy Operating Co. LLC, Liaison (LI Group Holdings Inc.), Barrette (LEB Holdings (USA) Inc.) and Corel Corp. released price talk with launch, and Harsco Corp. and Yum! Brands Inc. joined this week’s primary calendar.

Franchise cuts spread

Franchise Group trimmed pricing on its $1 billion first-lien term loan B (Ba3/BB-) to Libor plus 475 bps from Libor plus 500 bps, and left the 0.75% Libor floor and original issue discount of 99 unchanged, according to a market source.

Recommitments were due at 3 p.m. ET on Wednesday, the source said.

Earlier in syndication, the first-lien term loan was upsized from $750 million as plans were cancelled for a committed $250 million last-out term loan, the Libor floor was reduced from 1% and the discount firmed at the tight end of the 98.5 to 99 talk. Also, a $300 million second-lien term loan (B3/B-) was added to replace $300 million of proposed unsecured debt.

J.P. Morgan Securities LLC, Citizens Bank and Credit Suisse Securities (USA) LLC are leading the deal.

Franchise frees up

Franchise Group’s first-lien term loan started trading late in the day, with levels quoted at 99 5/8 bid, par 1/8 offered, another source added.

Proceeds will be used to fund the acquisition of Pet Supplies Plus, a Livonia, Mich.-based omnichannel retail chain and franchisor of pet supplies and services, from Sentinel Capital Partners for about $700 million, and to refinance an existing term loan.

Closing is expected in March, subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Franchise Group is a Virginia Beach, Va.-based operator of franchised and franchisable businesses, including Liberty Tax Service, Buddy’s Home Furnishings, American Freight and the Vitamin Shoppe.

DRW updated, trades

DRW Holdings LLC set pricing on its $500 million seven-year first-lien term loan (BB-) at Libor plus 375 basis points, the low end of the Libor plus 375 bps to 400 bps talk, according to a market source.

The term loan still has a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

On Wednesday, the term loan broke for trading, with levels quoted at 99¾ bid, par ¼ offered, another source added.

Jefferies LLC is leading the deal that will be used to refinance the company’s existing $297 million senior secured first-lien term loan issued in 2019, expand its trading capital and pay related fees and expenses.

DRW is a technology-driven electronic trading firm.

Wedgewood flexes, breaks

Wedgewood Pharmacy cut the spread on its $220 million term loan B (B3/B-) to Libor plus 450 bps from talk in the range of Libor plus 475 bps to 500 bps, a market source said.

As before, the term loan has a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The term loan began trading in the afternoon, with levels quoted at 99 3/8 bid, 99 7/8 offered, the source added.

Macquarie Capital (USA) Inc. and Natixis are the leads on the deal.

Proceeds will be used to help fund the buyout of the company by Partners Group.

Wedgewood Pharmacy is a compounding pharmacy devoted to animal health.

DiversiTech hits secondary

DiversiTech’s fungible $165 million add-on first-lien term loan due December 2024 and extended $362 million term loan due December 2024 freed to trade as well, with levels quoted at 99 7/8 bid, par 3/8 offered on the break and then it moved up to par bid, par ½ offered, a trader remarked.

Pricing on the term loan debt is Libor plus 325 bps with a 1% Libor floor, and the debt has 101 soft call protection for six months. The add-on term loan was sold at an original issue discount of 99.5.

On Tuesday, the add-on term loan was upsized from $125 million and the discount was tightened from 99.

RBC Capital Markets is leading the deal.

The add-on term loan will be used to fund two acquisitions, with the extra proceeds raised through the recent upsizing eliminating the need to use just under $40 million of cash from the balance sheet to fund the acquisitions. The extension will push out the maturity on the existing term loan from June 2024 and increase existing pricing from Libor plus 300 bps.

DiversiTech is an Atlanta-based manufacturer of components and products related to the heating, ventilating, air conditioning and refrigeration industry.

Science Applications breaks

Science Applications’ $272 million senior secured covenant-lite term loan B-2 (Ba1/BB+) due March 13, 2027 began trading too, with levels quoted at par 1/8 bid, par ½ offered, according to a market source.

Pricing on the term loan is Libor plus 187.5 bps with a 0% Libor floor and it was issued at par. The debt has 101 soft call protection for six months.

Citigroup Global Markets Inc. is leading the deal that will be used to reprice an existing term loan B-2 down from Libor plus 225 bps with a 0% Libor floor.

Closing is expected on Monday.

Science Applications is a Reston, Va.-based technology integrator.

Novolex tops OID

Novolex’s $1.276 billion seven-year first-lien term loan (B2/B) also broke for trading, with levels quoted at 99 7/8 bid, par 3/8 offered, a market source said.

Pricing on the term loan is Libor plus 350 bps with a 0.5% Libor floor and it was sold at an original issue discount of 99.5. The debt has 101 soft call protection for six months.

During syndication, the discount on the term loan finalized at the tight end of the 99 to 99.5 talk.

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA, Citigroup Global Markets Inc., Jefferies LLC, Fifth Third, ING, Citizens and Carlyle are leading the deal that will be used to refinance an existing term loan due 2023.

Novolex is a Hartsville, S.C.-based manufacturer of packaging products for consumer-focused end markets.

Infinite starts trading

Infinite Electronics’ bank debt emerged in the secondary market, with the $640 million seven-year first-lien term loan (B2/B-) quoted at par bid, par ½ offered and the $240 million eight-year second-lien term loan (Caa2/CCC) quoted at par bid, 101 offered, a market source remarked.

Pricing on the first-lien term loan is Libor plus 375 bps with two leveraged based step-downs and an additional step-down following an initial public offering and a 0.5% Libor floor. The debt was sold at an original issue discount of 99.75 and has 101 soft call protection for six months.

The second-lien term loan is priced at Libor plus 700 bps with a 0.5% Libor floor and was issued at a discount of 99.5. This tranche has hard call protection of 102 in year one and 101 in year two.

During syndication, the Libor floor on both term loans was changed from 0.75%, the discount on the first-lien term loan was tightened from 99.5, pricing on the second-lien loan was lowered from talk in the range of Libor plus 725 bps to 750 bps and the discount on the second-lien loan was revised from 99.

Infinite being acquired

Proceeds from Infinite Electronics’ credit facilities will be used to help fund its buyout by funds affiliated with Warburg Pincus and to pay related fees and expenses.

Along with the funded term loan, the company’s $1.055 billion of senior secured credit facilities include a $100 million five-year revolver (B2/B-), a $55 million privately placed first-lien delayed-draw term loan (B2/B-) and a $20 million privately placed second-lien delayed-draw term loan (Caa2/CCC).

Jefferies LLC, Antares Capital, RBC Capital Markets, Wells Fargo Securities LLC, Golub Capital and TD Securities (USA) LLC are leading the debt.

Infinite Electronics is an Irvine, Calif.-based supplier of electronic components serving the needs of engineers.

Hillman frees up

Hillman Group’s bank debt began trading, with the strip of $835 million seven-year first-lien term loan B-1 (B1/B+/BB), $150 million seven-year first-lien term loan B-2 (B1/B+/BB) and $200 million first-lien 24-month availability delayed-draw term loan (B1/B+/BB) debt quoted at par bid, par ½ offered, according to a market source.

Pricing on the term loan debt is Libor plus 275 bps with a 25 bps step-down at 0.5x deleveraging and a 0.5% Libor floor. The debt was sold at an original issue discount of 99.75 and has 101 soft call protection for six months. Ticking fees paid from the time of allocations are half the margin for days 46 to 90 and the full margin thereafter. Delayed-draw term loan ticking fees paid from closing are half the margin from days 61 to 120 and the full margin thereafter. The original issue discount on the delayed-draw term loan will be paid at funding.

During syndication, pricing on the term loan debt was trimmed from talk in the range of Libor plus 300 bps to 325 bps and the discount was modified from 99.5.

Hillman getting revolver

In addition to the term loans, Hillman’s $1.435 billion of credit facilities include a $250 million five-year ABL revolver.

Jefferies LLC and Barclays are leading the deal that is being done in conjunction with the company’s merger with Landcadia Holdings III Inc., a publicly traded special purpose acquisition company.

The transaction implies an enterprise valuation for Hillman of $2.642 billion.

Closing is expected in the second quarter, subject to approval of the stockholders of Landcadia III and of Hillman and other customary conditions.

Hillman is a Cincinnati-based distributor of hardware and home improvement products, personal protective equipment and robotic kiosk technologies.

Petco revised

Back in the primary market, Petco set pricing on its $1.7 billion seven-year senior secured covenant-lite first-lien term loan B at Libor plus 325 bps, the low end of the Libor plus 325 bps to 350 bps talk, and moved the original issue discount to 99.75 from 99.5, a market source remarked.

The 0.75% Libor floor and 101 soft call protection for six months were unchanged.

Earlier in syndication, the term loan was upsized from $1.2 billion as plans were canceled to sell other secured debt.

Recommitments were due at 5 p.m. ET on Wednesday and allocations are expected on Thursday, the source added.

Citigroup Global Markets Inc., Goldman Sachs Bank USA, Wells Fargo Securities LLC, BofA Securities Inc., Credit Suisse Securities (USA) LLC and UBS Investment Bank are leading the loan that will be used with an up to $500 million ABL facility to refinance the company’s existing capital structure.

Petco is a San Diego-based specialty retailer of pet food, supplies and services.

Kodiak changes emerge

Kodiak Building Partners raised its seven-year term loan B (B2/B-) to $560 million from $540 million and reduced pricing to Libor plus 350 bps from Libor plus 375 bps, according to a market source.

As before, the term loan has a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months

The company’s now $760 million of credit facilities also include a $200 million five-year ABL revolver.

Commitments are due at noon ET on Friday, accelerated from noon ET on March 3, the source added.

RBC Capital Markets is the left lead on the deal that will be used to refinance the company’s capital structure and pay a shareholder dividend, which was increased to $200 million from $175 million as a result of the term loan upsizing.

Kodiak Building is a Highlands Ranch, Colo.-based building products distribution platform and provider of fabrication and assembly services.

Anthology firms

Anthology finalized the spread on its $322.6 million first-lien term loan (B2/B-) due March 2027 at Libor plus 475 bps, the low end of the Libor plus 475 bps to 500 bps talk, a market source remarked.

The term loan still has a 0.75% Libor floor, a par issue price and 101 soft call protection for six months.

Allocations went out on Wednesday, the source added.

UBS Investment Bank is leading the deal that will be used to reprice an existing term loan down from Libor plus 550 bps with a 1% Libor floor.

Anthology, formerly known as Astra Acquisition Corp., is a Boca Raton, Fla.-based provider of higher education solutions that support the entire learner lifecycle.

Renaissance tweaks timing

Renaissance Learning accelerated the commitment deadline for its non-fungible $358 million incremental first-lien term loan (B2/B-) and fungible $135 million incremental second-lien term loan (Caa2/CCC) to 5 p.m. ET on Wednesday from 5 p.m. ET on Thursday, a market source said.

The first-lien term loan is talked at Libor plus 375 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and the second-lien term loan is talked at Libor plus 700 bps with a 0% Libor floor and a discount of 99.

Barclays, Jefferies LLC, Nomura Securities, Macquarie Capital (USA) Inc., BMO Capital Markets and Madison are leading the deal that will be used to fund the acquisition of Nearpod.

Renaissance Learning is a Wisconsin Rapids, Wis.-based provider of software solutions for assessment, teaching and learning to K-12 schools and districts. Nearpod is a provider of an instructional platform that merges real-time formative assessment and dynamic media for learning experiences inside and outside of the classroom.

Leslie’s launches

Leslie’s Poolmart held its call on Wednesday morning and announced price talk on its $810 million seven-year covenant-lite term loan B at Libor plus 300 bps with a step-down to Libor plus 275 bps at 3x net first-lien leverage, a 0.5% Libor floor and an original issue discount of 99.5, according to a market source.

The term loan has 101 soft call protection for six months.

Commitments are due at noon ET on March 3, the source added.

Nomura, BofA Securities Inc., Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA and US Bank are leading the deal that will be used to refinance an existing term loan and pay related fees and expenses.

Leslie’s Poolmart is a Phoenix-based retailer of swimming pool and spa care supplies and related products.

DuPage sets guidance

DuPage Medical Group came out with talk of Libor plus 325 bps to 350 bps with a 0.75% Libor floor and an original issue discount of 99.5 on its $650 million seven-year covenant-lite first-lien term loan that launched iwht a call in the morning, a market source remarked.

The term loan has 101 soft call protection for six months.

The company’s $750 million of credit facilities (B2/B) also include a $100 million revolver.

Commitments are due at noon ET on March 5.

Credit Suisse Securities (USA) LLC is the left lead on the deal, which will be used with balance sheet cash to refinance first-and second-lien term loans and pay a distribution.

DuPage is a Downers Grove, Ill.-based multi-specialty physician group.

Go Daddy comes to market

Go Daddy launched without a call a $746 million senior secured first-lien term loan B due Aug. 10, 2027 talked at Libor plus 200 bps with a 0% Libor floor, a par issue price and 101 soft call protection for six months, according to a market source.

Commitments are due at 5 p.m. ET on Tuesday, the source added.

Barclays is the left lead on the deal that will be used to refinance/reprice an existing first-lien term loan B-3 due Aug. 10, 2027 priced at Libor plus 250 bps with a 0% Libor floor.

Go Daddy is Scottsdale, Ariz.-based provider of web hosting and domain names.

Liaison proposed terms

Liaison released talk of Libor plus 375 bps with a 0.75% Libor floor and an original issue discount of 99.5 on its $300 million seven-year covenant-lite first-lien term loan (B2/B) shortly before its 11:30 a.m. ET lender call began, a market source said.

The term loan has 101 soft call protection for six months.

Commitments are due at 5 p.m. ET on March 3.

Credit Suisse Securities (USA) LLC and UBS Investment Bank are leading the deal that will be used to refinance an existing term loan and for general corporate purposes.

Liaison is an admission management software provider for higher education.

Barrette holds call

Barrette emerged in the morning with plans to hold a lender call at 2 p.m. ET to launch a fungible $125 million incremental covenant-lite first-lien term loan (B2/B) due November 2027 talked with an original issue discount of 99.5 to 99.75, according to a market source.

Like the existing term loan, the incremental term loan is priced at Libor plus 400 bps with a 25 bps step-down at 3.65x first-lien net leverage and a 0.75% Libor floor, and has 101 soft call protection through May 2.

Commitments are due at 5 p.m. ET on Tuesday, the source added.

Credit Suisse Securities (USA) LLC is leading the deal, which will be used for general corporate purposes, including mergers and acquisitions.

Barrette is a manufacturer and distributor of wood alternative fence, railing and other outdoor living products.

Corel reveals talk

Corel launched on its morning call its fungible $75 million add-on first-lien term loan with original issue discount talk of 99, a market source remarked.

Pricing on the incremental term loan is Libor plus 500 bps with a 0% Libor floor, in line with existing term loan pricing.

Commitments are due at 5 p.m. ET on Tuesday, the source added.

KKR Capital Markets, Citigroup Global Markets Inc. and Barclays are leading the deal that will be used to repay some second-lien term loan borrowings.

Corel is an Ottawa-based software company.

Harsco joins calendar

Harsco set a lender call for 1 p.m. ET on Thursday to launch a $500 million first-lien term loan B (BB), according to a market source.

Goldman Sachs Bank USA, Citigroup Global Markets Inc., BMO Capital Markets, BofA Securities Inc., HSBC Securities (USA) Inc., RBC Capital Markets, PNC Bank and Fifth Third are leading the deal that will be used to refinance the company’s existing term loan A and term loan B.

Harsco is a Camp Hill, Pa.-based industrial company providing engineered products and industrial services to the steel, rail and energy industries.

Yum! Brands on deck

Yum! Brands scheduled a lender call for 11 a.m. ET on Thursday to launch a $1.5 billion seven-year term loan B talked at Libor plus 175 bps with a 0% Libor floor, an original issue discount of 99.5 to 99.75 and 101 soft call protection for six months, a market source said.

Commitments are due at noon ET on March 9, the source added.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance an existing term loan due 2025, which is being paid down by $400 million.

Yum! Brands is a Louisville, Ky.-based quick-service restaurant operator.

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