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On Assignment revises $822 million incremental loan issue price to par
By Sara Rosenberg
New York, Feb. 16 – On Assignment Inc. tightened the issue price on its $822 million seven-year incremental covenant-light term loan B (Ba2/BB) to par from 99.75, according to a market source.
Pricing on the incremental loan remained at Libor plus 200 basis points with a 0% Libor floor.
The incremental loan still includes 101 soft call protection for six months and amortization of 1% per annum.
Wells Fargo Securities LLC is the lead arranger on the deal.
Proceeds will be used to help fund the acquisition of ECS Federal LLC from Roy Kapani, the company’s majority owner and founder, and Lindsay Goldberg for $775 million in cash.
With the incremental loan, the company is seeking an amendment to its existing $578 million term loan B due June 5, 2022 that is priced at Libor plus 200 bps with a 0% Libor floor in order to allow for the transaction.
Existing lenders will receive a 7.5 bps amendment fee and 101 soft call protection for six months on the existing term loan B.
There is no amortization on the existing term loan B as the 1% per annum was already met.
Commitments/consents continue to be at 5 p.m. ET on Tuesday, the source added.
On a pro forma basis, which assumes the acquisition of ECS occurred at the beginning of 2017, On Assignment’s revenues are estimated to be about $3.2 billion and adjusted EBITDA is estimated to be around $379 million.
Closing is expected on April 2, subject to regulatory approvals and customary conditions.
On Assignment intends to change its name to ASGN Inc. effective April 2.
On Assignment is a Calabasas, Calif.-based provider of IT and professional services in the technology, creative/digital, engineering and life sciences sectors. ECS is a Fairfax, Va.-based provider of cyber security, cloud, DevOps, IT modernization and advanced science and engineering solutions to government enterprises.
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