Maax $110 million term loan B to launch May 11

By Sara Rosenberg

New York, May 4 - Maax Inc. is scheduled to hold a bank meeting on May 11 in the United States for its proposed credit facility, according to a market source. Goldman Sachs, Merrill Lynch and Royal Bank of Canada are the lead banks on the deal, with Goldman listed on the left.

The facility consists of a US$110 million term loan B with price talk still to be determined since the syndicate is waiting on ratings that are expected to be released any day now, a C$50 million revolver with an interest rate of Libor plus 250 basis points and a C$130 million term loan A with an interest rate of Libor plus 250 basis points, the source said.

A bank meeting was already held in Montreal last week and two commitments have already come into the books on the Canadian side, the source added.

Proceeds will be used to support Maax's leveraged buyout by J.W. Childs Associates LP, Borealis Private Equity LP and Ontario Municipal Employees Retirement System. Under the terms of the acquisition, which was announced in March, Maax shareholders will receive US$22.50 per common share in cash and the Sponsor Group will indirectly acquire all the issued and outstanding shares for a total purchase price of about US$640 million, including the assumption of existing debt.

The company will also be launching a US$160 million high-yield bond offering later this month and will receive US$131 million as an equity contribution to help fund the leveraged buyout, the source said.

Previously, it was known that Maax would tap the debt markets for this transaction, however, the only details available were that the bank and bond deals would launch some time in May, that total funding would be around US$500 million, that the bond deal would be a minimum of US$150 million and that the credit facility would contain a Canadian revolver and Canadian term loan A and a U.S. term loan B over US$100 million in size.

The merger is subject to certain conditions including, shareholder approvals, funding under the existing debt commitments and receipt of all necessary consents and regulatory approvals, including approvals under the Competition Act, Hart-Scott-Rodino Antitrust Improvements Act and Investment Canada Act. Closing is expected to occur on or about June 1.

Maax is a Sainte-Marie de Beauce, Quebec-based manufacturer of bathroom products and accessories, spas and kitchen cabinets.

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