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Michaels Stores reveals plans for $3.4 billion credit facility, $1.4 billion bonds
By Sara Rosenberg
New York, Aug. 1 - Michaels Stores Inc. detailed plans to get a new $3.4 billion senior secured credit facility and $1.4 billion in high-yield bonds to help back its leveraged buyout by Bain Capital and The Blackstone Group, according to a PREM14A filed with the Securities and Exchange Commission Tuesday.
Deutsche Bank, JPMorgan, Bank of America and Credit Suisse are the lead banks on the debt financing.
The credit facility consists of an up to $1 billion asset-based revolver and a $2.4 billion term loan.
The revolver will be subject to a borrowing base that will calculated periodically based on specified percentages of the value of eligible credit card receivables and eligible inventory. A maximum of $250 million may be borrowed under the revolver for LBO financing.
As a backup for the bonds, the company has received commitments for an up to $700 million senior unsecured bridge loan and an up to $700 million senior subordinated unsecured bridge loan.
Under the LBO agreement, Michaels Stores' shareholders will receive $44.00 per share in cash, representing a transaction value of more than $6 billion.
Bain and Blackstone have each committed to provide $1.092 billion in equity to help fund the transaction, for a total equity contribution of $2.184 billion.
Completion of the buyout is contingent on regulatory review and approval by shareholders, and is expected to occur by the end of the year.
Michaels Stores is an Irving, Texas, specialty retailer of arts, crafts, framing, floral, wall decor and seasonal merchandise for the hobbyist and do-it-yourself home decorator.
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