Sealed Air launches upsized $1 billion term A, $700 million revolver

By Sara Rosenberg

New York, July 25 - Sealed Air Corp. revealed the official structure on its $3 billion credit facility as a $700 million revolver, a $1 billion term loan A and a $1.3 billion term loan B, as the pro rata bank debt was launched to lenders on Monday, according to a market source.

The term loan B is expected to come to market post-Labor Day.

Previously, based on filings with the Securities and Exchange Commission, it was expected that the term loan A would be sized at $750 million and the term loan B would be sized at $1.55 billion.

Official price talk on the revolver and term loan A came out in line with what was outlined in the SEC filings at Libor plus 250 basis points, with the revolver having a 50 bps unused fee.

Price talk on the term loan B is not yet available since it will not launch for a while. However, the filings said the debt would be priced at Libor plus 275 bps on the U.S. piece and Euribor plus 300 bps on the euro piece, with the entire tranche having a 1% Libor/Euribor floor.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, BNP Paribas Securities Corp. and RBS Securities Inc. are the lead banks on the deal.

Financial covenants include a maximum total net leverage ratio.

Proceeds, along with $1.5 billion of senior unsecured notes, will be used to fund the acquisition of Diversey Holdings Inc. from the Johnson family and Clayton, Dubilier & Rice LLC for $2.1 billion in cash and an aggregate of 31.7 million shares of Sealed Air common stock. The transaction is valued at $4.3 billion.

Pro forma leverage will be 4.4 times, but with strong free cash flow generation, the company expects to be able to deleverage rapidly.

In connection with the acquisition, $1.4 billion of Diversey net debt will be refinanced.

Closing is expected to take place this year, subject to customary regulatory approvals.

Sealed Air is an Elmwood Park, N.J.-based manufacturer of packaging and performance-based materials and equipment systems that serve food, industrial, medical and consumer applications. Diversey is a Sturtevant, Wis.-based provider of cleaning, sanitization and hygiene products.

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