Quantum sets July 19 launch for $500 million credit facility

By Sara Rosenberg

New York, June 23 - Quantum Corp. has scheduled a bank meeting for July 19 to launch its proposed $500 million credit facility (B3/B), according to a market source.

KeyBanc Capital Markets is the lead bank on the deal.

Originally, the deal was anticipated to launch on June 27, but as was previously reported, the meeting was moved into the July timeframe because of scheduling issues.

The facility consists of a $150 million three-year revolver and a $350 million six-year term loan B, with price talk still to be determined.

Proceeds from the credit facility, along with available cash on hand, will fund the about $770 million acquisition of Advanced Digital Information Corp.

When the acquisition was first announced in early May, the company had said in a conference call that it anticipates paying an interest rate of Libor plus 275 basis points or better on the $500 million in new loan debt.

Under the purchase agreement, Advanced Digital shareholders will receive $12.25 per share in cash, with the right to elect, in lieu of cash, 3.461 shares of Quantum stock for each share they own. The stock election is subject to pro-ration such that Quantum will issue no more than about 10% of the total merger consideration in Quantum stock.

Quantum expects the transaction to be up to 15 cents accretive on a cash earnings per share basis, with annual cost synergies of about $45 million in the first full year of combined operations.

The transaction is subject to customary closing conditions and regulatory approvals, as well as approval by Advanced Digital shareholders.

Quantum is a San Jose, Calif., provider of storage, backup, recovery and archive services. Advanced Digital is a Redmond, Wash., provider of intelligent storage services for the open systems marketplace.

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