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Hercules details $1.25 billion credit facility for Todco buy
By Sara Rosenberg
New York, April 24 - Hercules Offshore Inc. released details on its proposed $1.25 billion credit facility that will be used to help fund its acquisition of Todco, according to an S-4 filed with the Securities and Exchange Commission Tuesday.
UBS is the lead bank on the deal. Other banks involved include Amegy Bank, Comerica Bank, Credit Suisse, Deutsche Bank, Jefferies Finance LLC and JPMorgan.
The facility consists of a $1.1 billion six-year term loan and a $150 million five-year revolving credit facility.
Pricing on the term loan is expected to range somewhere between Libor plus 175 and 250 basis points, the filing said.
Financial covenants will include maximum leverage and fixed-charge coverage.
Under the terms of the agreement, Todco shareholders will receive average total consideration equal to 0.979 shares of Hercules Offshore and $16.00 in cash for each share of Todco common stock outstanding, or an estimated 56.9 million shares of Hercules Offshore and cash of $930.7 million. The transaction is valued at $2.3 billion.
In addition to financing the acquisition, proceeds from the facility will be used to repay in full and terminate Hercules' existing senior secured term loan facility and refinance Todco's revolver.
Closing of the acquisition is expected to take place in mid-2007, subject to regulatory approvals and other customary conditions, as well as both Hercules Offshore and Todco shareholder approval.
Hercules Offshore is a Houston-based operator of jack-up drilling rigs and liftboats. Todco is a Houston-based provider of contract oil and gas drilling services.
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