Aramark $4.605 billion credit facility expected to launch in January

By Sara Rosenberg

New York, Dec. 12 - Aramark Corp. expects to hold a bank meeting for retail investors in January to launch its proposed $4.605 billion senior secured credit facility, according to a market source.

A senior managing agent bank meeting for the deal already took place on Sept. 26.

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

The facility consists of a $600 million six-year revolver, a $250 million seven-year synthetic letter-of-credit facility and a $3.755 billion seven-year term loan.

According to various filings with the Securities and Exchange Commission, the 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, and the synthetic letter-of-credit facility and 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.

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.

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 now expected to be completed at the end of January, as opposed to previous expected timing of late 2006/early 2007, subject to receipt of stockholder approval and regulatory approvals, as well as satisfaction of other customary closing conditions.

The company recently said in an 8-K that the anticipated 2007 closing is due to a number of factors, including the efforts of the investor group to obtain more favorable financing terms.

A special meeting of stockholders to approve the merger is scheduled for Dec. 20.

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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