Aramark details expected pricing on upcoming $4.605 billion facility

By Sara Rosenberg

New York, Oct. 11 - Aramark Corp. released information on expected spreads for its proposed $4.605 billion senior secured credit facility as it filed the debt commitment letter with the Securities and Exchange Commission Wednesday in an SC 13E3/A document.

According to the commitment letter, the $600 million six-year revolver is expected at Libor plus 200 basis points if the deal is rated B1/B+ or better, otherwise it's Libor plus 225 bps. The $250 million seven-year synthetic letter-of-credit facility and the $3.755 billion seven-year term loan are expected at Libor plus 225 bps if the deal is rated B1/B+ or better, otherwise they're anticipated at Libor plus 250 bps.

Goldman Sachs and JPMorgan are joint bookrunners, joint lead arrangers and co-syndication agents on the deal.

A senior managing agent bank meeting for the deal already took place on Sept. 26. No word on timing for the retail launch has emerged as of yet, a market source said.

Proceeds from the facility, along with $2.47 billion of notes, will be used to help fund the buyout of Aramark by chairman and chief executive officer Joseph Neubauer and a group of investors.

The notes will be comprised of $770 million of senior subordinated notes and up to $1.7 billion senior cash pay notes and/or senior PIK option notes, with 50% of the principal amount of the up to $1.7 billion having to come in the form of PIK option notes.

As a backup for the notes, the company has a commitment for a $770 million senior subordinated bridge facility and a commitment for a $1.7 billion senior bridge facility.

Under the acquisition agreement, Neubauer and investment funds managed by GS Capital Partners, CCMP Capital Advisors and J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus LLC will acquire Aramark in a transaction valued at $8.3 billion, including the assumption or repayment of about $2 billion of debt.

The transaction is expected to be completed by late 2006 or early 2007, subject to receipt of stockholder approval and regulatory approvals, as well as satisfaction of other customary closing conditions.

Aramark is a Philadelphia-based professional services company that provides food, hospitality, facility management services as well as uniform and work apparel.

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