School Specialty to get $100 million term loan for Delta purchase

By Sara Rosenberg

New York, Aug. 22 - School Specialty Inc. is getting a new $100 million term loan to help fund its acquisition of Delta Education LLC, according to an 8-K filed with the Securities and Exchange Commission.

Banc of America Securities LLC is the lead arranger and bookrunner on the deal.

The term loan, which matures April 12, 2006, will carry an interest rate of Libor 225 basis points.

Under the acquisition agreement, School Specialty will purchase Delta, a publisher of inquiry based hands-on science curriculum for the elementary school market, from Wicks Learning Group LLC for about $272 million.

In addition to the term loan, the Greenville, Wis., education company plans on drawing about $172 million under its existing credit facility to finance the remaining portion of the acquisition price.

The Delta transaction, which requires regulatory approval, is expected to close this month.

On May 31, School Specialty agreed to be acquired by an affiliate of Bain Capital Partners LLC for $49 per share in cash.

In conjunction with announcing the Delta acquisition, School Specialty revealed that Thomas H. Lee Partners will join Bain Capital as an investor in the LBO. It is expected that upon closing Bain Capital will have a 60% stake in the company and Thomas H. Lee Partners with hold a 40% stake.

Furthermore, the special shareholders' meeting to vote on the LBO proposal that was scheduled for Aug. 23 has now been pushed off to Sept. 12 to allow shareholders time to review additional information about the buyout.

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