Schweitzer-Mauduit to launch $350 million term loan on Wednesday

By Sara Rosenberg

New York, Feb. 9 – Schweitzer-Mauduit International Inc. will hold a lender call at 10:30 a.m. ET on Wednesday to launch a $350 million seven-year senior secured term loan (BB-), according to a market source.

J.P. Morgan Securities LLC is the lead on the deal.

BofA Securities, Inc., Barclays and Truist Securities, Inc. are joint bookrunners and joint lead arrangers with JPMorgan acting as administrative agent.

Price talk on the term loan is Libor plus 375 basis points to 400 bps with a 0.75% Libor floor and an original issue discount of 98.5 to 99, the source said.

The term loan has 101 soft call protection for six months.

Commitments are due at noon ET on Feb. 23, the source added.

Proceeds will be used to help fund the acquisition of Scapa Group plc, a UK-based innovation, design and manufacturing solutions provider for healthcare and industrial markets, for 210 pence in cash per scheme share. The transaction implies an equity value of about $551.9 million.

Closing is expected in the second quarter.

At close, net debt to EBITDA is estimated to be between 4x and 4.5x and is expected to steadily decline thereafter. The company anticipates its credit facility covenants will be amended in conjunction with the transaction with net debt to EBITDA covenants of 5.5x as of the end of 2021 and 4.75x as of the end of 2022.

Schweitzer-Mauduit is an Alpharetta, Ga.-based performance materials company.

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