Quikrete ups term loan B-1 to $1.7 billion, sets OID at 99.25

By Sara Rosenberg

New York, June 10 – Quikrete Holdings Inc. upsized its seven-year incremental covenant-lite term loan B-1 to $1.7 billion from $1.5 billion and firmed the original issue discount at 99.25, the midpoint of the 99 to 99.5 talk, according to a market source.

Pricing on the term loan remained at Libor plus 300 basis points with a 0% Libor floor.

Included in the incremental term loan is 101 soft call protection for six months, amortization of 1% per annum and a ticking fee of half the margin from days 31 to 60 and the full margin plus Libor thereafter.

Mandatory repayments are from 100% of debt issuance excluding permitted indebtedness, 100% of asset sales and insurance proceeds, subject to reinvestment rights, and 50% excess cash flow sweep when total leverage is greater than 4.25x and 25% when leverage is greater than 3.75x.

Security is a first priority lien on all assets of the borrower and guarantors, excluding ABL revolver collateral, pledge of capital stock and a second priority lien on collateral pledged to the ABL revolver.

The incremental term loan is being incurred under the terms of the existing credit agreement.

Wells Fargo Securities LLC is the lead arranger on the deal.

Recommitments are due at 10 a.m. ET on Friday and allocations are expected thereafter, the source added.

Proceeds will be used to help fund the acquisition of Forterra Inc. for $24.00 per share in an all-cash transaction valued at $2.74 billion, including outstanding debt.

The upsize to the term loan B-1 will be used as purchase consideration at close, reducing a term loan B-2 commitment dollar-for-dollar.

Closing on the acquisition is expected in the fourth quarter, subject to receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Quikrete is an Atlanta-based building materials company. Forterra is an Irving, Tex.-based manufacturer of water and drainage infrastructure pipe and products.

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