Marketo gets $375 million five-year term loan, $25 million revolver

By Angela McDaniels

Tacoma, Wash., Aug. 16 – Marketo, Inc. entered into a credit agreement on Tuesday that provides for a $375 million senior secured term loan and a $25 million revolving line of credit, according to an 8-K filing with the Securities and Exchange Commission.

The new credit agreement was entered into in connection with the acquisition of Marketo by Vista Equity Partners. Marketo is now a subsidiary of Milestone Holdco, Inc. The term loans were made available to fund a portion of the $1.79 billion acquisition.

For both the term loan and the revolver, the maturity date is Aug. 16, 2021 and the interest rate is Libor plus 950 basis points.

No amortization of the term loan is required prior to maturity.

The credit facilities are subject to mandatory prepayments in amounts equal to 100% of the net cash proceeds from certain non-ordinary course sales or other dispositions of assets (including as a result of casualty or condemnation) by Marketo or some of its subsidiaries, subject to customary reinvestment provisions and certain other exceptions; 100% of the net cash proceeds from issuances or incurrences of debt by Marketo or some of its subsidiaries that are not permitted under the credit agreement; and a customary annual excess cash flow prepayment.

The credit agreement requires Marketo and the guarantors to maintain certain liquidity levels and recurring revenue or total leverage ratio levels.

Golub Capital Markets LLC is the administrative agent and collateral agent.

Milestone Holdco; Milestone Merger Sub, Inc., a subsidiary of Milestone Holdco; Marketo; and some of its domestic subsidiaries granted a first-priority security interest in substantially all of their assets to secure their obligations under the credit agreement.

In connection with the entry into the new credit agreement and the completion of the acquisition, the company’s loan and security agreement with Silicon Valley Bank was terminated, and all obligations outstanding thereunder (other than letters of credit and credit cards subject to customary cash collateralization arrangements) were paid off and extinguished.

Based in San Mateo, Calif., Marketo provides engagement marketing software and solutions.

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