Sealed Air's $1.5 billion equivalent notes expected in September

By Paul A. Harris

Portland, Ore., Aug. 16 - Sealed Air Corp.'s $1.5 billion equivalent offering of senior notes is expected to launch in September, market sources say.

The notes offering is expected to include a $1 billion tranche and a €500 million tranche.

However it remains to be seen whether there is sufficient demand to go forward with the euro-denominated tranche, sources said.

Citigroup Global Markets Inc. is expected to lead a syndicate of banks.

Proceeds 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.

Backing up the notes is a commitment for a $1.5 billion one-year senior unsecured bridge loan. Pricing on the bridge is Libor plus 575 bps on the U.S. piece and Euribor plus 600 bps on the euro piece, with the spread on both pieces stepping up by 50 bps after three months and every three months thereafter.

Other funds for the transaction will come from a $3 billion credit facility.

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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