Flexera Software softens with buyout news; Terex, Quad/Graphics, Smart Modular tweak deals

By Sara Rosenberg

New York, July 19 - Flexera Software Inc.'s term loan B headed lower in trading on Monday after the company announced that it is being acquired by Teachers' Private Capital as guys are expecting that the transaction will result in a par paydown.

Over in the primary, Terex Corp. lowered pricing on its U.S. term loan B due to strong demand, and Quad/Graphics Inc. shifted funds between its term loan B and pro rata tranches, while also cutting the Libor floor on the B loan and firming the discount price at the low end of talk.

Continuing on the topic of revisions, Smart Modular Technologies Inc. made a slew of changes to its term loan B, including moving the discount price to the high end of talk, sweetening call premiums and shortening the maturity.

In other primary happenings, Academy Sports + Outdoors, Ocwen Financial Corp. and Water Pik Inc. released price talk as their new deals were launched to lenders during the session, and La Paloma Generating Co. LLC emerged with plans to bring a new credit facility to market later this week.

Flexera B loan slides

Flexera's term loan B dropped in trading on Tuesday to par bid, 101 offered, from par ¾ bid, 102¼ offered, with news that the company is being bought out by Teachers' Private Capital, the private investment department of the Ontario Teachers' Pension Plan, according to a source.

Thoma Bravo LLC, the current owner of Flexera, will retain a minority interest in the company.

Terms of the transaction were not disclosed.

Closing is expected in late September.

Flexera is a Schaumburg, Ill.-based provider of software to help simplify the business relationship between software producers and enterprises.

Terex trims spread

Moving to the primary, Terex reverse flexed pricing on its $462 million six-year U.S. term loan B to Libor plus 400 bps from Libor plus 450 bps, while keeping the 1.5% Libor floor and original issue discount of 99 intact, according to a market source.

The company's $1.25 billion credit facility (Ba2/BB) also includes a $288 million six-year euro equivalent term loan B and a $500 million five-year revolver, with pricing on both these tranches left unchanged.

Specifically, the euro term loan is priced at Euribor plus 450 bps with a 1.5% floor and a discount of 99, and the revolver is priced at Libor plus 450 bps with a 1.5% floor.

Also, as before, the dollar and euro term loans have 101 soft call protection for one year.

Terex lead banks

Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., UBS Securities LLC and RBS Securities Inc. are the lead banks Terex's credit facility and are asking for recommitments by noon ET on Wednesday.

The original commitment deadline had been July 18.

Proceeds will be used to help fund Terex Industrial Holding AG's tender offer to purchase Demag Cranes AG for €45.50 per share.

Terex is a Westport, Conn.-based diversified manufacturer. Demag is a Dusseldorf, Germany-based provider of industrial cranes, crane components, harbor cranes and port automation technology.

Quad/Graphics reworks deal

Also coming out with changes was Quad/Graphics as it downsized its term loan B by $100 million and upsized its pro rata debt by the equivalent amount and updated B loan pricing, according to a market source.

The now $200 million seven-year term loan B, down from $300 million, is priced at Libor plus 300 bps with a 1% Libor floor and an original issue discount of 991/2, the source said. Previously, the Libor floor had been talked at 1.25%, and the discount was guided at 99 to 991/2. There is still 101 soft call protection for one year.

Meanwhile, the five-year revolver is now sized at $850 million, up from $800 million, and the five-year term loan A is now $450 million, up from $400 million, the source continued. Both of these tranches are priced at Libor plus 225 bps.

Quad/Graphics repaying debt

Proceeds from Quad/Graphics' new $1.5 billion credit facility (Ba2/BBB-) will be used to refinance an existing senior secured credit facility.

The company's existing credit facility was obtained in 2010 as a $530 million four-year revolver and a $700 million six-year term loan B, of which about $685 million was outstanding as of March 31.

Pricing on the existing term loan B is Libor plus 400 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 981/2.

J.P. Morgan Securities LLC is the lead bank on the new deal and is seeking recommitments by noon ET on Wednesday versus the original commitment deadline of July 15.

Quad/Graphics is a Sussex, Wis.-based provider of print and related services.

Smart Modular revises OID

Smart Modular Technologies modified the original issue discount on its $300 million first-lien term loan B (B2/B+) to 98, the wide end of the 98 to 98½ talk, and left pricing at Libor plus 700 bps with a 1.25% Libor floor, according to a market source. The spread had been flexed up earlier in the syndication process from the Libor plus 650 bps area.

Also, the maturity on the B loan was shortened to six years from seven years, and call protection was beefed up to 103 in year one, 102 in year two and 101 in year three, from 102 in year one and 101 in year two, the source said.

The company's $350 million senior secured credit facility also includes a $50 million five-year first-lien first-out revolver (B1).

Smart Modular being acquired

Proceeds from Smart Modular Technologies' credit facility will be used to help fund the buyout of the company by Silver Lake Partners and Silver Lake Sumeru for $9.25 per share in cash. The transaction is valued at about $645 million.

J.P. Morgan Securities LLC and UBS Securities LLC are the lead arrangers and bookrunners on the deal.

Other funds for the acquisition will come from up to $381 million of equity.

Closing is expected in the third quarter, subject to receipt of shareholder and regulatory approval.

Smart Modular is a Newark, Calif.-based manufacturer of memory modules and solid state storage products.

Academy Sports sets talk

In other news, Academy Sports + Outdoors held a bank meeting on Tuesday afternoon to launch its proposed credit facility, and with the event, talk on the $840 million covenant-light term loan (B2/B) surfaced, a market source told Prospect News.

The term loan is being guided at Libor plus 475 bps to 500 bps with a 1.5% Libor floor, an original issue discount of 98½ and 101 soft call protection for one year, the source remarked.

Commitments are due on July 28, the source added.

The company's $1.49 billion credit facility also provides for a $650 million asset-based revolver.

Academy plans notes

In addition to the credit facility, Academy Sports plans on selling $450 million of high-yield bonds, with proceeds from the new loan and notes helping fund the acquisition of the company by Kohlberg Kravis Roberts & Co.

When the buyout was announced at the end of May, it was said that closing was expected in six to eight weeks, subject to customary conditions.

Morgan Stanley & Co. Inc., Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Goldman Sachs & Co., Mizuho Securities USA Inc. and KKR Financial are leading the term loan and are all involved in the revolver too, but J.P. Morgan Securities LLC is the left lead on that asset-based tranche.

Academy Sports is a Katy, Texas-based chain of sporting goods and outdoor stores.

Ocwen reveals pricing

Ocwen Financial was another company to hold a bank meeting in the afternoon, launching its $575 million five-year senior secured term loan (B1/B) with talk of Libor plus 575 bps with a 1.5% Libor floor, an original issue discount of 98 and 101 soft call protection for one year, according to a market source.

Barclays Capital Inc., the lead bank on the deal, is asking for commitments by Aug. 5.

Proceeds will be used to help fund the acquisition of Litton Loan Servicing LP, a provider of servicing and subservicing of primarily non-prime residential mortgage loans, from Goldman Sachs Group Inc. for a base purchase price of $263.7 million in cash.

Ocwen leverage multiples

Pro forma for the transaction, Ocwen's corporate debt to run rate adjusted EBITDA is 1.7 times and total debt to total equity is 4.5 times, the company said in an 8-K filed with the Securities and Exchange Commission on Tuesday.

Closing on the acquisition is expected on Sept. 1, subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other conditions.

Ocwen is an Atlanta-based provider of residential and commercial loan servicing, special servicing and asset management services.

Water Pik discloses guidance

Water Pik also came out with price talk with its Tuesday bank meeting, launching its $197 senior secured credit facility (B2/B) to lenders at Libor plus 500 bps to 525 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

The facility is comprised of a $20 million five-year revolver and a $177 million six-year term loan.

GE Capital Markets is the lead bank on the deal that will be used to refinance existing debt and fund a dividend.

Water Pik is a Fort Collins, Colo.-based developer and manufacturer of personal and oral health care products.

La Paloma readies deal

La Paloma Generating is set to hold a bank meeting on Thursday morning to launch a $424.2 million credit facility that consists of a $15 million five-year working capital facility, a $299.2 million six-year first-lien term loan and a $110 million seven-year second-lien term loan, according to a source.

Price talk is not yet available, but it is known that the first-lien term loan has 101 soft call protection for one year and the second-lien term loan is non-callable for one year, then at 102 in year two and 101 in year three, the source said.

Bank of America Merrill Lynch and Macquarie Capital are the lead arrangers on the deal for the 1,022 MW combined-cycle gas-fired facility located in Kern, Calif., with Bank of America the left lead. SunTrust Robinson Humphrey Inc. is a co-manager.

Proceeds will be used to refinance existing first- and second-lien term loans, prefund a debt service reserve, prefund 2011 through 2013 major maintenance and cash collateralize letters of credit.

Cumulus Media fills out

Also on the new deal front, Cumulus Media Inc.'s $2.415 billion credit facility was fully syndicated ahead of Tuesday's commitment deadline, according to a market source, who added that first-lien pricing should firm up shortly.

The facility consists of a $375 million five-year revolver (Ba2/BB), a $1.25 billion seven-year first-lien term loan (Ba2/BB) talked at Libor plus 425 bps to 450 bps with a 1.25% Libor floor, a discount of 99 and 101 soft call protection for one year, and a $790 million 71/2-year second-lien term loan (B2/B-) talked at Libor plus 600 bps with a 1.5% Libor floor, a discount of 981/2, and call protection of non-call one, 103, 102, 101.

The second-lien term loan was added to the capital structure last week as the first-lien term loan was downsized from $2.04 billion. Prior to the downsizing, the first-lien loan was talked at Libor plus 375 bps to 400 bps with a 1.25% Libor floor, a discount of 99 to 99½ and 101 soft call protection for one year.

Cumulus buying Citadel

Proceeds from Cumulus' credit facility, along with $500 million of equity from Crestview Partners and Macquarie Capital, will be used to fund the acquisition of Citadel Broadcasting Corp. and to refinance all of the outstanding debt of Cumulus, Citadel and Cumulus Media Partners LLC.

Citadel is being acquired for $37 per share, or $2.4 billion. Citadel stockholders have the option to receive the per-share payment in cash or get 8.525 shares of Cumulus common stock, subject to proration.

Closing is expected by the end of this year, subject to customary conditions, including Citadel stockholder approval, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and regulatory approval from the Federal Communications Commission.

J.P. Morgan Securities LLC, UBS Securities LLC, Macquarie Capital, RBC Capital Markets LLC and ING Financial Markets LLC are the lead banks on the credit facility.

Cumulus is an Atlanta-based radio broadcaster. Citadel is a Las Vegas-based radio company.

Penn National closes

Penn National Gaming Inc. completed its $2.15 billion senior secured credit facility (Ba1/BBB-), consisting of a $700 million five-year revolver priced at Libor plus 175 bps, a $700 million five-year term loan A priced at Libor plus 175 bps and a $750 million seven-year term loan B priced at Libor plus 275 bps with a 1% Libor floor, according to a news release.

The B loan was sold at an original issue discount of 99¾ and includes 101 soft call protection for six months.

Bank of America Merrill Lynch, Wells Fargo Securities LLC, Commerz Markets LLC, RBS Securities Inc. and UBS Securities LLC led the deal, with Bank of America the left lead on the B loan and Wells Fargo the left lead on the pro rata.

Proceeds were used by the Wyomissing, Pa.-based gaming company to refinance existing debt.

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