Ancestry.com launches $670 million term loan at Libor plus 475-500 bps

By Sara Rosenberg

New York, Dec. 3 - Ancestry.com launched its $670 million seven-year covenant-light term loan on Monday afternoon with price talk of Libor plus 475 basis points to 500 bps with a 1.25% Libor floor and an original issue discount of 99, according to a market source.

The $720 million senior secured credit facility also includes a $50 million five-year revolver.

Commitments are due by 5 p.m. ET on Dec. 14, the source said.

Barclays, Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and RBC Capital Markets LLC are the lead banks on the deal.

Proceeds will be used to help fund Permira Funds' buyout of the company for $32 per share in cash in a transaction valued at $1.6 billion.

The company is also expected to sell $300 million of senior unsecured notes, which are backed by a commitment for a $300 million one-year senior unsecured bridge loan.

Pricing on the bridge loan is Libor plus 825 bps with a 1.25% Libor floor. The spread will increase by 50 bps after three months and every three months thereafter up to an undisclosed cap.

Other funds for the transaction will come from up to $503 million of equity from Permira and from $100 million of equity that Spectrum Equity, which owns about 30% of the company's shares, will exchange for shares in the acquired company.

Also, Timothy Sullivan, president and chief executive officer of the company, and Howard Hochhauser, chief financial officer and chief operating officer, have agreed to roll over a substantial majority of their respective shares of Ancestry.com's common stock.

Closing is expected in early 2013, subject to stockholder approval and other customary conditions.

Senior secured leverage is 3.9 times and total leverage is 5.6 times.

Ancestry.com is a Provo, Utah-based online family history resource.

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