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High Liner plans $250 million term loan, ABL upsizing for acquisition
By Sara Rosenberg
New York, Nov. 17 - High Liner Foods Inc. plans on getting a new $250 million term loan B and increasing its existing asset-based credit facility to $180 million from $120 million to help fund the acquisition of Icelandic Group's U.S. subsidiary and Asian procurement operations, company officials said in a conference call on Thursday.
RBC Capital Markets and BMO Capital Markets are the lead banks on the term loan.
Officials said that the term loan B will come to market in "a little while," and while future market conditions are unknown, based on current conditions, a B loan would likely price somewhere in the area of Libor plus 550 basis points to 600 bps with a 1.5% Libor floor and an original issue discount of 98 to 99.
In addition to financing the $230.6 million acquisition, proceeds from the new debt will be used to help repay an existing approximately $47 million term loan.
Closing is anticipated to occur late this year or during the first quarter of 2012, subject to customary conditions, including regulatory approvals.
Near-term synergies are expected at $12.1 million and total ongoing annual synergies are expected to be in the range of $16 million to $18 million.
The company said that leverage would be reduced to about 3.8 times on a pro forma basis adjusted for the expected near-term synergies and seasonal debt levels.
And, on a pro forma basis, the company's annual revenue would be about $900 million for the last 12 months ending September 2011 with pro forma adjusted EBITDA of about $94 million including near-term synergies.
High Liner is a Lunenburg, N.S.-based frozen seafood company. Icelandic's U.S. subsidiary is a supplier of seafood to the U.S. food service market.
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