Michael Foods to launch $585 million credit facility Thursday

By Sara Rosenberg

New York, Oct. 27 - Michael Foods Inc. is scheduled to hold a bank meeting for a $585 million credit facility on Thursday, according to a market source. Bank of America and Deutsche Bank are the lead banks on the deal.

The facility consists of a $100 million revolver and a $485 million term loan B. Price talk is not currently being disclosed.

The size of the facility, although currently set at $585 million, may change depending on the size of the company's bond offering, the source added.

Proceeds will be used to help support the company's leveraged buyout by Thomas H. Lee Partners, chairman and chief executive officer Gregg A. Ostrander and senior management from Vestar Capital Partners, Goldner Hawn Johnson & Morrison and the Michael family.

The transaction, which is expected to close by year-end, values Michael Foods at approximately $1.05 billion, subject to certain adjustments.

Michael Foods is a Minnetonka, Minn. diversified food processor and distributor of egg products, refrigerated grocery products and refrigerated potato products.

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