School Specialty sets structure on $825 million credit facility as launch nears

By Sara Rosenberg

New York, Sept. 1 - School Specialty Inc. has come out with a structure on its proposed $825 million credit facility as the deal is gearing up to launch via a bank meeting on Sept. 8.

The facility consists of a $175 million revolving credit facility, a $300 million term loan B and a $350 million delayed-draw term loan, according to a market source.

Previously, the deal was contemplated to be sized at $665 million consisting of a $175 million six-year revolver, a $240 million term loan and a $250 million delayed-draw term loan, according to a filing with the Securities and Exchange Commission that came out in late-July.

JPMorgan and Bank of America are co-lead arrangers on the deal, JPMorgan, Bank of America and Deutsche Bank are joint bookrunners, with JPMorgan also administrative agent, Bank of America syndication agent and Deutsche documentation agent.

Proceeds will be used to help finance Bain Capital Partners LLC's leveraged buyout of School Specialty.

Bain has agreed to purchase the Greenville, Wis., education company in a transaction valued at $1.5 billion including assumption of non-convertible debt totaling $101 million.

The delayed-draw term loan will be used to fund certain permitted acquisitions and to repurchase any of School Specialty's 3.75% convertible subordinated notes due 2023 tendered and exchanged.

School Specialty has also received commitments for up to $525 million in senior unsecured and senior unsecured subordinated bridge facilities, up to $150 million pay-in-kind loans under a senior unsecured subordinated bridge facility, a $175 million trade receivables commercial paper co-purchase conduit facility and $460 million in equity financing from Bain.

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