Alere, Lawson Software, Sophos break; INC Research, Mondrian, Norit Holding revise deals

By Sara Rosenberg

New York, June 30 - Alere Inc.'s credit facility made its way into the secondary market on Thursday, with the term loan quoted above its original issue discount price, and levels on Lawson Software Inc. and Sophos surfaced as they freed up as well.

Over in the primary, INC Research LLC widened price talk on its credit facility and increased the original issue discount on its term loan B, and Mondrian Investment Partners Ltd. downsized its deal while firming the spread at the wide end of talk, revising the discount price and adding a covenant.

Also, Norit Holding upsized its first-lien term loan as demand for the recently flexed up loan was strong, and Ipreo Holdings LLC nailed down timing on the launch of its credit facility.

Alere hits secondary

Alere's credit facility allocated and freed up for trading on Thursday, with the $925 million term loan B quoted at 99¾ bid, par ¼ offered on the open and then it moved to 99 7/8 bid, par 1/8 offered, according to a trader.

Pricing on the term loan B is Libor plus 350 basis points with a 1% Libor floor, and it was sold at an original issue discount of 991/2. There is a leverage-based pricing grid under which pricing increases by 25 bps when senior secured leverage is greater than 3.0 times and by an additional 50 bps when senior secured leverage is greater than 4.0 times.

During syndication, the B loan underwent a number of revisions. It was first sized at $1 billion, then cut to $750 million, then lifted to $875 million before ending up at the final amount. Also, pricing had been flexed up from talk of Libor plus 300 bps to 325 bps, and a $300 million delayed-draw term loan B was eliminated.

Alere revolver, A loans

Alere's $2.1 billion senior secured credit facility (Ba2/BB-) also provides for a $250 million revolver, a $625 million term loan A and a $300 million delayed-draw term loan A, all priced at Libor plus 275 bps with no Libor floor.

Pricing on these tranches will step up by 25 bps when senior secured leverage is greater than 3 times and by an additional 50 bps when senior secured leverage is greater than 4 times.

Just like the term loan B, the revolver and term loan As saw lots of changes before getting to final terms. The A loan was initially $450 million and then moved to $700 million before ending up at its final amount, the delayed-draw term A was upsized from $100 million, and pricing on the revolver and the A loans was increased from Libor plus 250 bps.

Alere recapitalizing

Proceeds from Alere's credit facility are being used to refinance existing debt, to fund the buyback of common stock and to add cash to the balance sheet.

Jefferies & Co., GE Capital Markets, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. are the lead banks on Alere's credit facility.

Alere is a Waltham, Mass.-based provider of near-patient diagnosis, monitoring and health management to enable individuals to improve their health and quality of life at home.

Lawson starts trading

Lawson's $1.04 billion six-year term loan (Ba3/B+) also broke, with the debt quoted by a trader at 95¾ bid, 96¼ offered. The trader noted there was little activity in the name. A second source heard that one dealer was quoting it at 95 5/8 bid, 95 7/8 offered early on in the day, but realized no one would sell below 96, so he moved his levels to wrap around 96 too.

Pricing on the term loan B, of which $600 million was syndicated and $440 million was held by the underwriters, is Libor plus 525 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 96. There is 101 soft call protection for one year against repricings.

The underwriters have agreed not to sell the term loan below the 96 issue price for a period of 120 days after closing.

During syndication, pricing was increased from Libor plus 500 bps and, before that, from Libor plus 450 bps, the discount widened from revised talk of 98 and from initial guidance of 98½ to 99, call protection was added, the maturity was shortened from seven years, and the excess cash flow sweep was increased to 75% initially from 50%.

Lawson being acquired

Proceeds from Lawson's $1.115 billion senior secured credit facility, which also includes a $75 million five-year revolver (Ba3), will be used to help fund its buyout by GGC Software Holdings Inc., an affiliate of Golden Gate Capital and Infor Global Solutions, for $11.25 per share. The acquisition is valued at about $2 billion.

Other funds for the acquisition, which is expected to close in the third quarter, will come from $560 million of senior notes that are backed by a bridge loan commitment and $618 million of equity.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Morgan Stanley & Co. Inc., RBC Capital Markets LLC and Deutsche Bank Securities Inc. are the lead banks on the credit facility that allocated late on Wednesday.

Lawson Software is a St. Paul, Minn.-based enterprise software developer. Infor is an Alpharetta, Ga.-based provider of business software and services.

Sophos tops par

Another deal to start trading was Sophos' $125 million term loan add-on, with levels seen at par bid on the open and then it moved to par ¼ bid, 101¼ offered in light volume, a trader told Prospect News.

The add-on is comprised of a $65 million piece and €42 million piece. Pricing on the U.S. tranche is Libor plus 562.5 bps and pricing on the euro is Euribor plus 512.5 bps, with both having a 2% Libor floor and sold at an original issue discount of 991/2.

Proceeds will be used to fund the acquisition of Astaro, a provider of network security services that is based in Wilmington, Mass., and Karlsruhe, Germany.

RBC Capital Markets LLC is the lead bank on the deal for the IT security and data protection firm that has headquarters in Boston and Oxford, England.

Sophos forgoes refinancing

As was already reported, Sophos was originally going to refinance and upsize its existing credit facility with the acquisition, but as a result of market conditions, the refinancing plan was dropped.

The roughly $460 million six-year senior secured credit facility (B+) that was launched around mid-June consisted of a $20 million revolver, a $280 million term B and a €110 million term loan that was going to be divided into an A tranche and a B tranche. Price talk on the revolver and A loan had been Libor/Euribor plus 400 bps with no floor and a 100 bps upfront fee, and talk on the B loan had been Libor/Euribor plus 450 bps with a 1.5% floor, a discount of 99 and 101 soft call protection for one year.

Last summer, to help fund its buyout by Apax Partners, Sophos got a $229.4 million six-year term loan B priced at Libor/Euribor plus 575 bps with a 2% Libor floor that was sold at a discount of 96, as well as a $75 million six-year euro equivalent term loan A and a $20 million six-year revolver, both priced at Libor plus 450 bps.

No changes are being made to the existing deal with the add-on transaction.

INC Research lifts talk

Moving to the primary, INC Research raised price talk on its $425 million credit facility (Ba3/B+) to Libor plus 550 bps to 575 bps from Libor plus 475 bps to 500 bps and widened the original issue discount on the term loan B to 98 from 99, according to a market source.

The facility consists of a $75 million revolver and a $350 million term loan B, and both tranches still include a 1.25% Libor floor.

Commitments are due on Wednesday, extended from the original deadline of June 29.

Morgan Stanley & Co. Inc., ING Financial Markets LLC and RBC Capital Markets LLC are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of Kendle International Inc. for $15.25 per share in cash. The total equity value is roughly $232 million.

INC Research plans notes

In addition to the credit facility, INC Research plans on getting $250 million of bonds and equity for the acquisition.

Backing the bonds is a commitment for a $250 million senior unsecured bridge loan. It is priced at Libor plus 750 basis points with a 1.25% Libor floor. The spread will step up by 50 bps every four months until it hits an 11.5% cap.

Closing on the transaction is expected in the third quarter, subject to approval by Kendle's shareholders as well as satisfaction of customary conditions and regulatory approvals.

INC Research is a Raleigh, N.C.-based therapeutically focused contract research organization privately held by Avista Capital Partners and Ontario Teachers' Pension Plan. Kendle is a Cincinnati-based clinical research organization.

Mondrian reworks deal

Mondrian Investment Partners cut its senior secured term loan B to $440 million from $500 million, set pricing at Libor plus 425 bps, the high end of the Libor plus 400 bps to 425 bps talk, and moved the original issue discount to 97 from talk of 99 to 991/2, according to a market source.

As before, the B loan has a 1.25% Libor floor and 101 soft call protection for one year.

However, there were some other revisions to the deal, including adding a total leverage covenant to the previously covenant-light deal, and lifting amortization to 10% per annum from 1% per annum, the source remarked.

Morgan Stanley & Co. Inc. and Deutsche Bank Securities Inc. are the lead banks on the loan that will be used to buy out a minority shareholder and pay a dividend.

Books have closed and allocations are expected to go out early next week.

Mondrian is a money manager with offices in London and Philadelphia.

Norit ups loan

Norit Holding increased its six-year first-lien term loan to $260 million from $230 million, while leaving pricing on the tranche, as well as on a €75 million six-year first-lien term loan (size unchanged), at Libor/Euribor plus 525 bps with a 1.5% Libor floor and an original issue discount of 981/2, according to a market source.

The first-lien loans (B1/BB-) include soft call protection of 102 in year one and 101 in year two.

Books closed at 3:30 p.m. ET on Thursday.

Pricing on the debt had been flexed up earlier in the week from talk of Libor plus 450 bps to 475 bps with a 1.25% Libor floor and an original issue discount of 99, at which time call protection was also revised from just 101 for one year.

Deutsche Bank Securities Inc. and Goldman Sachs & Co. are the lead banks on the deal.

Norit funding dividend recap

Proceeds from Norit's roughly $420 million credit facility, which also includes a $50 million revolver (B1), will be used to fund a distribution to shareholders and refinance existing debt.

Originally, as part of the transaction, the company was planning on getting a $110 million 61/2-year second-lien term loan that was talked at Libor plus 825 bps with a 1.25% Libor floor, an original issue discount of 98½ and call protection of 103 in year one, 102 in year two and 101 in year three.

However, this second-lien loan was removed at the time of the pricing changes to the first-lien term loans. With the elimination of the second-lien, the dividend amount was reduced, and now with the first-lien upsizing, it was increased.

Total leverage under the new structure is 4.35 times versus 4.0 times after the removal of the second-lien loan and 5.3 times before.

Norit is a Netherlands-based producer of activated carbon and related services.

Ipreo discloses timing

Ipreo Holdings firmed up timing on its proposed $170 million credit facility (B1) with the scheduling of a bank meeting for July 7 with a 2 p.m. ET start time, according to a market source.

The facility consists of a $20 million revolver and a $150 million term loan.

RBC Capital Markets LLC is the lead bank on the deal that will be used to help fund the buyout of the company acquisition by Kohlberg Kravis Roberts & Co. LP from Veronis Suhler Stevenson.

Other funds for the transaction will come from $70 million of mezzanine debt from Crescent Capital.

Ipreo is a New York-based capital markets and corporate analytics firm.

Open Mobile closes

In other news, Open Mobile closed on Thursday on its $71.5 million term loan B add-on (B2/B) due June 4, 2016 that is priced at Libor plus 475 bps with a 2% Libor floor and was sold at an original issue discount of 99, according to a market source.

SunTrust Robinson Humphrey Inc., Morgan Stanley & Co. Inc., RBC Capital Markets LLC and ING Financial Markets LLC led the deal that was used to fund a dividend.

Open Mobile is a provider of pre-paid wireless service in Puerto Rico.

Pre-Paid buyout wraps

MidOcean Partners completed its acquisition of Pre-Paid Legal Services Inc. for $66.50 per share, or about $650 million, according to a news release.

To help fund the transaction, Pre-Paid Legal got a new $430 million senior secured credit facility consisting of a $30 million five-year revolver (Ba2/BB-) priced at Libor plus 550 bps with a 1.5% Libor floor and sold at a discount of 981/2, a $250 million 51/2-year first-out term B (Ba2/BB-) priced at Libor plus 600 bps with a 1.5% Libor floor and sold at 981/2, and a $150 million 51/2-year last-out term B (B3/B) priced at Libor plus 950 bps with a 1.5% Libor floor, and sold at 97.

There is call protection of 102 in year one and 101 in year two on the last-out tranche.

Pre-Paid lead banks

Macquarie Capital, RBC Capital Markets LLC, KeyBanc Capital Markets LLC and Bank of Ireland led Pre-Paid Legal's credit facility.

During syndication, the deal moved from a $400 million six-year term loan talked at Libor plus 450 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 981/2, to a first-out last-out structure.

Then, the first-out loan was downsized to $250 million from $300 million and pricing firmed at the wide end of the Libor plus 550 bps to 600 bps talk, and the last-out loan was upsized to $150 million from $100 million and the maturity was shortened to 5½ years from six years.

Pre-Paid Legal is an Ada, Okla.-based provider of legal service benefits through a network of independent law firms.

Husky completes deal

Husky International Ltd.' buyout by Berkshire Partners LLC and Omers Private Equity Inc. from Onex Corp. for $2.1 billion closed, according to a news release.

Funding for the transaction came in part from a $1.03 billion credit facility (B), consisting of a $110 million revolver and a $920 million covenant-light term loan B priced at Libor plus 525 bps with a 1.25% Libor floor that was sold at a discount of 99 and includes hard call protection of 101 for one year.

During syndication, pricing on the B loan firmed at the high end of revised talk of Libor plus 500 bps to 525 bps and up from initial talk of Libor plus 425 bps to 450 bps, the original issue discount came at the wide end of the 99 to 99½ guidance and call protection was changed from a soft call.

Goldman Sachs & Co., Morgan Stanley & Co. Inc., RBC Capital Markets LLC and TD Securities (USA) LLC led the deal.

Husky is a Bolton, Ont.-based supplier of injection molding equipment and services to the plastics industry.

SBA closes

SBA Senior Finance II LLC closed on its $500 million seven-year term loan B (Ba2/BB) and extended the maturity of its existing $500 million revolver (Ba2/BB) to June 2016 from February 2015, according to a news release.

Pricing on the B loan finalized at Libor plus 275 bps, the low end of the Libor plus 275 bps to 300 bps talk. The tranche has a 1% Libor floor and 101 soft call protection for one year, and was sold at an original issue discount of 993/4.

Revolver pricing ranges from Libor plus 187.5 bps to 237.5 bps based on leverage.

J.P. Morgan Securities LLC, Barclays Capital Inc., TD Securities (USA) LLC, RBS Securities Inc. Deutsche Bank Securities Inc., Wells Fargo Securities LLC and Citigroup Global Markets Inc. led the deal.

Proceeds were used to repay revolver debt and for general corporate purposes.

SBA Senior Finance is a wholly owned subsidiary of SBA Communications Corp., a Boca Raton, Fla.-based owner and operator of wireless communications infrastructure.

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