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Cumulus Media plans $1.02 billion credit facility for buyout by management and Merrill
By Sara Rosenberg
New York, July 23 - Cumulus Media Inc. plans on getting a new $1.02 billion senior secured credit facility to help fund its buyout by management and Merrill Lynch Global Private Equity, according to a SC 13D/A filed with the Securities and Exchange Commission Monday.
Merrill Lynch is the lead arranger and bookrunner on the deal.
The facility consists of a $780 million seven-year first-lien term loan expected at Libor plus 225 basis points, a $100 million six-year revolver expected at Libor plus 225 bps, with a 50 bps commitment fee, and a $140 million eight-year second-lien term loan expected at Libor plus 425 bps.
The second-lien term loan has call protection of 102 in year one and 101 in year two.
First-lien financial covenants will include a minimum consolidated interest coverage ratio and maximum total leverage ratio.
Second-lien financial covenants will include a maximum total leverage ratio with set-backs from the first-lien credit facility to be agreed upon.
There is a $200 million accordion feature.
Under the terms of the agreement, Lewis W. Dickey, Jr., chairman, president and chief executive officer, John W. Dickey, executive vice president and co-chief operating officer, other members of their family and Merrill Lynch Global will pay Cumulus stockholders $11.75 in cash per share.
The transaction is valued at $1.3 billion.
Other financing will from a $286 million equity commitment.
The company has a 45-day "go-shop" period.
The deal is expected to be completed in early 2008, subject to stockholder approval, expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and approval of the Federal Communications Commission, as well as satisfaction of other closing conditions. There is no financing condition.
Cumulus Media is an Atlanta-based radio company.
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