Zayo, ThoughtWorks, Medforth, Sabre, Aptean break; Kronos, Ultimate react to merger news

By Sara Rosenberg

New York, Feb. 20 – Zayo Group Holdings Inc. increased the size of its U.S. term loan and trimmed pricing, set the spread on its euro term loan at the low side of guidance and tightened issue prices on both tranches, before breaking for trading on Thursday.

Also, ThoughtWorks Inc. and Medforth firmed pricing on their term loans at the high end of talk, Sabre Industries added a pricing step-down to its term loan B, and Aptean upsized its incremental first-lien term loan and firmed the issue price at the tight end of talk, and then these deal made their way into the secondary market too.

In more trading happenings, Kronos Inc. and Ultimate Software saw their term loans soften during the session after news emerged that the companies will be merging.

Back in the primary market, Cast & Crew Entertainment Services accelerated the commitment deadline for its add-on term loan B and repricing of its existing term loan B.

Furthermore, Bausch Health Americas Inc., Tosca Services LLC, Minimax Viking, Vistage International Inc. and Hornblower Holdings released price talk with launch, and Duff & Phelps and Grosvenor Capital Management joined the near-term primary calendar.

Zayo revised

Zayo raised its U.S. seven-year covenant-lite first-lien term loan to $4.75 billion from $4.235 billion, cut pricing to Libor plus 300 basis points from Libor plus 325 bps and moved the original issue discount to 99.75 from 99.5, according to a market source.

Also, the company finalized pricing on its €750 million seven-year covenant-lite first-lien term loan at Euribor plus 325 bps, the low end of the Euribor plus 325 bps to 350 bps talk, and changed the issue price to par from 99.5, the source said. The euro term loan is now described as $810 million equivalent compared to $825 million equivalent at launch because exchange rates moved, but the plan was always to raise €750 million.

The term loans (B1/B) still have a 0% floor and 101 soft call protection for six months.

Commitments were due at 11 a.m. ET on Thursday for the U.S. loan and at 8 a.m. ET on Thursday for the euro loan.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., SunTrust Robinson Humphrey Inc. and TD Securities (USA) LLC are leading the deal.

Zayo hits secondary

On Thursday, Zayo’s term loan debt freed to trade, with the U.S. term loan quoted at par bid, par ½ offered, another source added.

The new loans will be used to help fund the buyout of the company by Digital Colony Partners and the EQT Infrastructure IV fund for $35.00 in cash per share in a transaction valued at $14.3 billion, including the assumption of $5.9 billion of Zayo’s net debt.

The company is also getting $1.5 billion of senior secured notes, which were upsized from $1 billion, and $1.08 billion of senior notes, which were downsized from $2.08 billion, for the transaction.

Closing is expected in the first half of this year, subject to customary conditions, including regulatory clearance and Zayo shareholder approvals.

Zayo is a Boulder, Colo.-based provider of mission-critical bandwidth to companies.

ThoughtWorks updated, trades

ThoughtWorks finalized pricing on its $450 million covenant-lite first-lien term loan (B2/B) due October 2024 at Libor plus 375 bps, the wide end of the Libor plus 350 bps to 375 bps talk, a market source said.

The term loan still has a 1% Libor floor, a par issue price and 101 soft call protection for six months.

During the session, the term loan broke for trading and was quoted at par ¼ bid, par ¾ offered, another source added.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to reprice an existing term loan down from Libor plus 400 bps.

ThoughtWorks is a Chicago-based pure play digital transformation services provider.

Medforth finalized, breaks

Medforth set pricing on its $788 million first-lien term loan B due July 17, 2025 at Libor plus 325 bps, the high end of the Libor plus 300 bps to 325 bps talk, a market source said.

The term loan still has a 0% Libor floor, a par issue price and 101 soft call protection for six months.

In the afternoon, the term loan B began trading and levels were quoted at par 1/8 bid, par 5/8 offered, another source added.

Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., Macquarie Capital (USA) Inc. and HSBC Securities (USA) Inc. are leading the deal that will be used to reprice an existing term loan B.

Medforth is a New York-based educational institution, providing students medical degrees and veterinary degrees.

Sabre adds step, frees up

Sabre Industries added a 25 bps pricing step-down at 2.8x total net leverage to its $411 million term loan B (B2/B) due April 2026, a market source remarked.

As before, the term loan is priced at Libor plus 350 bps with a 0% Libor floor and a par issue price, and has 101 soft call protection for six months.

Recommitments and consents were due at noon ET on Thursday and the loan started trading in the afternoon, with levels quoted at par bid, par ½ offered, another source added.

Goldman Sachs Bank USA is the left lead on the deal.

Proceeds will be used to reprice an existing term loan B down from Libor plus 425 bps.

With the repricing, the term loan is being paid down by balance sheet cash to $411 million.

Closing is expected during the week of Feb. 24.

Sabre is an Alvarado, Tex.-based provider of highly engineered infrastructure products and services to the utility and telecom markets.

Aptean tweaked, trades

Aptean lifted its fungible incremental first-lien term loan to $100 million from $75 million and set the issue price at par, the tight end of the 99.75 to par talk, according to a market source.

Like the existing first-lien term loan, the incremental term loan is priced at Libor plus 425 bps with a 0% Libor floor and has 101 soft call protection through March.

Commitments were due on Thursday afternoon and the incremental loan broke for trading later in the day at par bid, par ½ offered, another source added.

Golub Capital is leading the deal that will be used to fund an acquisition and, because of the upsizing, to add cash to the balance sheet.

Aptean is an Alpharetta, Ga.-based provider of mission-critical, industry-specific enterprise software solutions.

Kronos/Ultimate soften

Also in trading, Kronos’ and Ultimate Software’s bank debt headed lower after it was announced that the companies will merge in an all-stock merger that is expected to close at the end of March.

Kronos’ first-lien term loan was quoted at par 1/8 bid, par 3/8 offered, down from par ¼ bid, par 5/8 offered and its second-lien term loan was quoted at par ½ bid, 101½ offered, down from 102 bid, 103 offered, a trader said.

Ultimate Software’s first-lien term loan was quoted at par bid, par ½ offered, down from par 3/8 bid, par 5/8 offered, another trader added.

The combined company will have revenues of about $3 billion and an enterprise value of $22 billion.

Morgan Stanley & Co. LLC acted as financial adviser for Kronos and Goldman Sachs & Co. LLC acted as financial adviser for Ultimate Software.

Hellman & Friedman LLC, the controlling shareholder of both Kronos and Ultimate Software, will be the controlling shareholder of the newly formed company. Blackstone, GIC, Canada Pension Plan Investment Board and JMI Equity will be minority investors in the combined company.

Lowell, Mass.-based Kronos and Weston, Fla.-based Ultimate Software are providers of cloud human capital management and employee experience solutions.

Cast & Crew accelerated

Switching back to the primary market, Cast & Crew moved up the commitment deadline for its fungible $125 million add-on first-lien term loan B (B2/B+) due Feb. 7, 2026 and repricing of its existing $759 million first-lien term loan B (B2/B+) due Feb. 7, 2026 to 5 p.m. ET on Thursday from noon ET on Friday, a market source said.

Talk on the term loan debt is Libor plus 375 bps with a 25 bps step-down at 0.5x turn inside closing date first-lien net leverage, a 0% Libor floor and 101 soft call protection for six months. The add-on term loan is talked with an original issue discount of 99.75, and the repricing is talked at par for existing lenders and at 99.75 for new money.

Goldman Sachs Bank USA and RBC Capital Markets are leading the deal.

Proceeds from the add-on term loan will be used to fund the acquisition of Media Services, a Los Angeles-based payroll and production management solutions company, and the repricing will take the existing term loan down from Libor plus 400 bps.

Cast & Crew is a Burbank, Calif.-based provider of software and services to the entertainment production industry.

Bausch reveals talk

Bausch Health held its lender call on Thursday and announced talk on its roughly $5.144 billion seven-year first-lien term loan B (Ba2//BB) at Libor plus 225 bps with a 0% Libor floor, an original issue discount of 99.5 to 99.75 and 101 soft call protection for six months, according to a market source.

Cashless roll and assignments are due at noon ET on Tuesday and new money orders are due at noon ET on Feb. 27, the source said.

Barclays and Citigroup Global Markets Inc. are leading the deal that will be used with new secured debt securities and cash on hand to refinance a term loan B due June 2025 and a term loan B due November 2025, to redeem in full the company’s 6.5% senior secured notes due 2022 and 7% senior secured notes due 2024, and to pay related fees, premiums and expenses.

Bausch is a Laval, Quebec-based specialty pharmaceutical and medical device company.

Tosca sets guidance

Tosca Services came out with talk of Libor plus 450 bps to 475 bps with a 0% Libor floor and an original issue discount of 99 on its $325 million seven-year first-lien term loan (B2/B) that launched with a bank meeting in the morning, a market source said.

The term loan, split between a $250 million funded tranche and a $75 million delayed-draw tranche, has 101 soft call protection for six months.

Commitments are due at noon ET on March 5.

Credit Suisse Securities (USA) LLC, UBS Investment Bank, KKR Capital Markets, Rabobank and Goldman Sachs Bank USA are leading the deal that will be used to help fund the acquisition of Polymer Logistics, a ready packaging systems and technologies company, from private investors and to refinance existing debt.

With the transaction, funds advised by Apax Partners, which acquired Tosca in 2017, will commit additional capital to Tosca to help fund the acquisition of Polymer.

Tosca is an Atlanta-based provider of reusable packaging supply chain solutions.

Minimax proposed terms

Minimax Viking set price talk on its $590 million covenant-lite term loan B (B1/B+) due July 2025 and €506 million covenant-lite term loan B (B1/B+) due July 2025 in connection with its morning call, according to a market source.

The U.S. term loan is talked at Libor plus 225 bps with a step-up to Libor plus 250 bps at 4x leverage and a step-down to Libro plus 200 bps at less than 3x leverage, a 0.75% Libor floor and a par issue price, and the euro term loan is talked at Euribor plus 250 bps with a step-up to Euribor plus 275 bps at 4x leverage and a step-down to Euribor plus 225 bps at less than 3x leverage, a 0% floor and a par issue price, the source said.

The term loans have 101 soft call protection for six months.

Commitments are due at 5 p.m. ET on Wednesday.

Deutsche Bank is leading the deal that will be used to reprice existing U.S. and euro term loans. The current U.S. term loan pricing grid is Libor plus 300 bps at 4x leverage, Libor plus 275 bps at 3x to 4x leverage and Libor plus 250 bps at less than 3x leverage, and the current euro term loan pricing grid is Euribor plus 325 bps at 4x leverage, Euribor plus 300 bps at 3x to 4x leverage and Euribor plus 275 bps at less than 3x leverage.

Minimax is a Bad Oldesloe, Germany-based fire protection company.

C.J. Foods price talk

C.J. Foods launched at its bank meeting its $285 million term loan B (B-) at talk of Libor plus 450 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, according to a market source.

Commitments are due on March 5, the source added.

Citizens Bank is leading the deal that will be used to help fund the acquisition of American Nutrition Inc., an Ogden, Utah-based supplier of dry, canned and baked pet food and treats products.

Closing is expected by April.

C.J. Foods, a portfolio company of J.H. Whitney Capital Partners, is a Kansas-based manufacturer of pet food.

Vistage seeks add-on

Vistage International held a lender call at 3 p.m. ET to launch a fungible $50 million add-on first-lien term loan (B2) talked with an original issue discount of 99.5, a market source remarked.

The first-lien term loan is priced at Libor plus 400 bps with a 1% Libor floor.

Commitments are due on Feb. 28, the source added.

Macquarie Capital (USA) Inc. and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to repay a portion of the company’s existing $80 million second-lien term loan.

Pro forma for the upsize, the first-lien term loan will total $306 million.

The company is also getting a $15 million add-on to its revolver.

Total net leverage is currently 4.9x.

Vistage is a San Diego-based for-profit membership organization of CEOs.

Hornblower launches

Hornblower Holdings launched on its call its fungible $25 million incremental first-lien term loan due April 2025 with original issue discount talk of 99.5 to par, a market source said.

The incremental loan is priced at Libor plus 450 bps, which matches existing first-lien term loan pricing.

Commitments are due on Feb. 27, the source added.

UBS Investment Bank is leading the deal that will be used to repay revolver borrowings.

Hornblower, a Crestview Partners portfolio company, is a San Francisco-based cruise and event company.

Duff & Phelps on deck

Duff & Phelps surfaced with plans to hold a bank meeting at 9 a.m. ET in New York on Tuesday to launch $1.75 billion equivalent of credit facilities, according to a market source.

The facilities consist of a $200 million revolver and a $1.55 billion equivalent term loan B that will include a €300 million tranche, the source said.

Goldman Sachs Bank USA, UBS Investment Bank, BofA Securities, Inc., Morgan Stanley Senior Funding Inc., Stone Point Capital Markets, KKR Capital Markets, Capital One and Credit Suisse Securities (USA) LLC are leading the deal that will be used with $450 million of other secured debt to help fund the buyout of the company by Stone Point Capital and Further Global from the Permira funds for $4.2 billion. Permira will continue to hold a significant stake in the company.

Closing is expected in the second quarter.

Duff & Phelps is a New York-based independent adviser with expertise in the areas of valuation, corporate finance, disputes and investigations, compliance and regulatory matters, and other governance-related issues.

Grosvenor joins calendar

Grosvenor Capital Management scheduled a lender call for 1:30 p.m. ET on Friday to launch a $344 million term loan B, a market source said.

Goldman Sachs Bank USA is leading the deal that will be used to reprice an existing term loan B.

Grosvenor Capital is a Chicago-based independent alternative asset management firm.

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