Dealertrack launches $575 million term loan at Libor plus 275-300 bps

By Sara Rosenberg

New York, Feb. 6 - Dealertrack Technologies Inc. launched on Thursday its $575 million seven-year term loan B with price talk of Libor plus 275 basis points to 300 bps with a 1% Libor floor and an original issue discount of 991/2, according to a market source.

The term loan B has 101 soft call protection for six months, the source said.

The company's $775 million senior secured credit facility (Ba2/BB-) also includes a $200 million revolver.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Barclays and Wells Fargo Securities LLC are leading the debt.

Proceeds will be used to help fund the acquisition of Dealer.com for about 8.7 million shares of Dealertrack's common stock and $620 million in cash.

Initially, it was expected that the term loan would be sized at $625 million, but the company disclosed in an 8-K filed with the Securities and Exchange Commission that it reduced the amount by $50 million since it expects to sell substantially all of its shares of TrueCar Inc. common stock for about $92.5 million and use some of those proceeds for the Dealer.com acquisition.

Closing is expected this quarter, subject to regulatory approval.

Dealertrack is a Lake Success, N.Y.-based provider of web-based software solutions and services to the automotive industry. Dealer.com is a Burlington, Vt.-based provider of marketing and operations software and services for the automotive industry.

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