Pilot, Zebra, FleetCor, FHC break; Micro Focus, Answers, Victory, Pike, Bioventus revised

By Sara Rosenberg

New York, Sept. 30 – Pilot Travel Centers LLC, Zebra Technologies Corp. and FleetCor Technologies Inc. came out with changes to their loan deals and then freed up for trading on Tuesday, and FHC Health Systems Inc. hit the secondary as well.

In more happenings, Micro Focus and Answers Corp. modified spreads, original issue discounts and call protection on their term loan debt, and Victory Capital Management reduced the size of its term loan B, increased the spread and sweetened the call protection.

Also, Pike Corp. modified its term loan sizes, set pricing on its first-lien tranche at the wide end of talk, and beefed up the spread, offer price and call protection on its second-lien tranche, Bioventus updated pricing and call protection on its second-lien term loan, and Grocery Outlet Inc. (GOBP Holdings Inc.) and Sensata Technologies BV released price talk with launch.

Pilot Travel revised, trades

Pilot Travel Centers trimmed its seven-year term loan B to $1.95 billion from $2.25 billion, extended the 101 soft call protection to one year from six months and removed the 18 month MFN sunset provision, according to a market source.

As before, the term loan B is priced at Libor plus 325 basis points with a 1% Libor floor and an original issue discount of 99½.

With the term loan B downsizing, the Knoxville, Tenn.-based operator of travel centers and travel plazas lifted its five-year term loan A to $1.5 billion from $1.2 billion, the source said.

The company’s $4.45 billion credit facility (Ba2/BB) also includes a $1 billion five-year revolver.

By late day, the deal had freed up for trading and the term loan B was seen trading at 99¾ bid, par 1/8 offered, a trader remarked.

Bank of America Merrill Lynch, Wells Fargo Securities LLC, SunTrust Robinson Humphrey Inc. and U.S. Bank are leading the deal that will be used to refinance existing debt and to fund a dividend.

Zebra updated, breaks

Zebra Technologies increased its seven-year term loan B to $2.2 billion from $2 billion, set pricing at Libor plus 400 bps, the high end of revised talk of Libor plus 375 bps to 400 bps and up from initial talk of Libor plus 350 bps to 375 bps, and modified the original issue discount to 99¼ from 99, according to a market source.

The term loan B still has a 0.75% Libor floor and 101 soft call protection for one year.

Earlier this week the call protection was extended from six months and the MFN sunset was removed.

The company’s now $2.45 billion senior secured credit facility also includes a $250 million revolver.

Morgan Stanley Senior Funding Inc. and J.P. Morgan Securities LLC are the joint bookrunners on the deal and joint lead arrangers with Deutsche Bank Securities Inc.

Recommitments were due at 3 p.m. ET on Tuesday and the deal began trading late in the day, with the term loan B quoted at 99¾ bid, par ¼ offered, a trader said.

Zebra trims notes

In connection with the term loan B upsizing, Zebra Technologies downsized its notes offering to $1.05 billion from $1.25 billion, the source added.

Proceeds from the credit facility, notes and cash on hand will be used to fund the $3.45 billion acquisition of Motorola Solutions Inc.’s enterprise business.

Closing is expected on Oct. 27, but if it has not closed by then, the term loan will have a ticking fee of the full drawn spread.

Zebra is a Lincolnshire, Ill.-based provider of marking and printing technologies.

FleetCor retranches

FleetCor Technologies lowered its seven-year term loan B size to $300 million from $1.05 billion and kept pricing at Libor plus 300 bps with a 0.75% Libor floor and an original issue discount of 99½, according to a market source. The tranche still has 101 soft call protection for six months.

With the term loan B downsizing, the company’s five-year term loan A was lifted to $1,965,000,000 from $1.7 billion, the source said.

The now $3.3 billion senior secured credit facility also includes a $1 billion revolver A and a $35 million revolver B.

Bank of America Merrill Lynch, Barclays, PNC Capital Markets LLC and Wells Fargo Securities LLC are leading the deal for which recommitments were due at 11 a.m. ET on Tuesday.

FleetCor tops OID

With final terms in place, FleetCor’s credit facility emerged in the secondary market in the afternoon, and the term loan B was seen quoted at 99¾ bid, par ¼ offered, a trader said.

Proceeds will be used to help fund the acquisition of Comdata Inc. from Ceridian LLC for $3.45 billion.

Additional funds for the transaction will come from the issuance of shares of FleetCor common stock to Ceridian, and, to compensate for the reduction of the amount of term loan debt being used, from a securitization, the source remarked.

Closing is expected in December, subject to regulatory approvals and other customary conditions.

FleetCor is a Norcross, Ga.-based provider of fuel cards and workforce payment products to businesses. Comdata is a Brentwood, Tenn.-based business-to-business provider of electronic payment services.

FHC frees up

FHC Health’s credit facility began trading too, with the $350 million seven-year first-lien term loan quoted at 99½ bid, par offered, according to a market source.

Pricing on the term loan is Libor plus 400 bps, after firming recently at the low end of the Libor plus 400 bps to 425 bps talk. There is a 1% Libor floor and 101 soft call protection for six months, and the debt was sold at an original issue discount of 99.

The company’s $415 million credit facility (B1/B+) also includes a $65 million five-year revolver.

UBS AG, Goldman Sachs Bank USA, GE Capital Markets and Nomura are leading the deal that will be used to help fund Beacon Health Strategies’ merger with ValueOptions Inc. to create FHC Health, a Boston-based managed behavioral health care company.

Closing is expected this fall, subject to regulatory review.

Micro Focus tweaked

Back in the primary, Micro Focus raised pricing on its $1.35 billion seven-year covenant-light term loan B to Libor plus 425 bps from Libor plus 325 bps and widened the original issue discount to 97½ from 99, and increased pricing on its $500 million five-year covenant-light term loan C to Libor plus 375 bps from Libor plus 300 bps while modifying the offer price to 97 from 99½, a market source said.

In addition, the 101 soft call protection on both term loans was extended to one year from six months, the pricing step-downs in the term loan C were removed, the 18-month MFN sunset provision was eliminated, the incremental allowance was revised and the excess cash flow sweep was increased to 75% at more than 3 times net first-lien leverage, 50% at more than 2 times net first-lien leverage and 0% at less than 2 times net first-lien leverage, from 50% with step-downs, the source said.

The term loan B still has a 1% Libor floor amortization of 1% per annum and the term loan C still has a 0.75% Libor floor and amortization of 10% per annum.

Micro Focus merging

Proceeds from Micro Focus’ $2 billion senior secured credit facility (B1/BB-), which also includes a $150 million five-year revolver, will be used to help fund its merger with the Attachmate Group in a transaction with an enterprise value of $2,349,800,000 before costs.

Specifically, Micro Focus will acquire the entire issued share capital of the Attachmate Group, in exchange for the issue of about 86.6 million ordinary shares to Attachmate’s parent company, Wizard Parent LLC.

Bank of America Merrill Lynch, HSBC Securities (USA) Inc., RBC Capital Markets, Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC and Guggenheim are leading the credit facility.

Recommitments are due at 5 p.m. ET on Wednesday, the source added.

Closing is expected on Nov. 3, subject to customary conditions, including Micro Focus shareholder approvals and regulatory approvals under the Hart-Scott-Rodino Act.

Micro Focus is a software provider with U.S. headquarters in Rockville, Md., and U.K. headquarters in Newbury, Berkshire. Attachmate is a Houston-based software holding company.

Answers changes surface

Answers lifted pricing on its $320 million seven-year first-lien covenant-light term loan (B1/B) to Libor plus 525 bps from talk of Libor plus 475 bps to 500 bps, moved the original issue discount to 96½ from 99 and extended the 101 soft call protection to one year from six months, while keeping the 1% Libor floor intact, according to a market source.

Additionally, pricing on the $175 million eight-year second-lien covenant-light term loan (Caa2/CCC+) was raised to Libor plus 900 bps from talk of Libor plus 825 bps to 850 bps, the discount widened to 95½ to 99, and the call protection was modified to 103 in year one, 102 in year two and 101 in year three from 102 in year one and 101 in year two, the source said. This tranche also still has a 1% Libor floor.

The company’s $535 million credit facility includes a $40 million five-year revolver (B1/B) too.

Recommitments are due at 5 p.m. ET on Thursday, the source added.

Answers being acquired

Proceeds from Answer’s credit facility will be used to help fund its buyout by Apax Partners from Summit Partners, TA Associates and founder shareholders, and members of the company’s senior management will invest alongside Apax Funds to maintain a significant equity interest.

Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc., Jefferies Finance LLC and Bank of America Merrill Lynch are leading the loan financing.

Closing on the buyout is expected in the fourth quarter.

Answers is a St. Louis-based provider of cloud-based solutions that enhance customer acquisition and brand engagement.

Victory Capital reworked

Victory Capital trimmed its seven-year term loan B to $295 million from $310 million, lifted pricing to Libor plus 600 bps from talk of Libor plus 450 bps to 475 bps, revised the call protection to a 101 hard call for one year from a 101 soft call for six months and eliminated the MFN sunset provision, a market source said.

As before, the term loan B still has a 1% Libor floor and an original issue discount of 99.

Also included in the B loan is a ticking fee of the full spread and floor after 30 days, amortization of 5% annually, and an incremental allowance of $85 million with the available amount now subject to a 4 times net total leverage test, the source remarked.

The company’s now $320 million senior secured credit facility provides for a $25 million revolver as well.

Recommitments were due at 5 p.m. ET on Tuesday.

Victory Capital lead banks

Morgan Stanley Senior Funding Inc. and Credit Suisse Securities (USA) LLC are leading Victory Capital’s credit facility that will be used to help fund the acquisition of Munder Capital Management to create a new independent investment advisory firm based in Cleveland, Ohio.

The $15 million of funds removed from the term loan B had been previously earmarked for an identified acquisition, the source added.

Additional equity financing for the new company will be led by funds managed by Crestview Partners and Reverence Capital Partners.

Pike modifies deal

Pike upsized its seven-year first-lien covenant-light term loan to $310 million from $290 million and firmed pricing at Libor plus 450 bps, the high end of the Libor plus 425 bps to 450 bps talk, according to sources.

As before, the first-lien term loan has a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year.

Regarding the 7½-year second-lien covenant-light term loan, the size was trimmed to $130 million from $150 million, pricing was raised to Libor plus 850 bps from talk of Libor plus 725 bps to 750 bps, the original issue discount moved to 97½ from 99 and the call protection was changed to 103 in year one, 102 in year two and 101 in year three from 102 in year one and 101 year two, sources said, adding that the 1% Libor floor was left intact.

Other changes to the deal included a reduction in the incremental allowance to $50 million from $85 million with 0 bps MFN for life instead of 50 bps MFN for life, and an increase in the ticking fee to the full spread plus floor after 30 days from half the spread from days 31 to 60 and the full spread thereafter.

Pike getting revolver

In addition to the first- and second-lien term loans, Pike’s $540 million senior secured credit facility provides for a $100 million five-year revolver (B2/B+).

Recommitments are due at noon ET on Wednesday, sources continued.

J.P. Morgan Securities LLC, Keybanc Capital Markets and SunTrust Robinson Humphrey Inc. are leading the deal that will be used with up to $190 million in equity and cash on hand to fund the buyout of the company led by Court Square Capital Partners and including chairman and chief executive officer J. Eric Pike for $12.00 in cash per share.

Closing is expected in the fourth quarter, subject to shareholder and regulatory approvals and other customary conditions.

Pike is a Mount Airy, N.C.-based specialty construction and engineering firm.

Bioventus finalizes terms

Bioventus firmed pricing on its $60 million six-year second-lien term loan at Libor plus 1,000 bps with a 1% Libor floor and an original issue discount of 98, versus talk at launch in the 10½% all-in-yield area, a source remarked.

Also, the call protection on the loan was sweetened to 103 in year one, 102 in year two and 101 in year three from 102 in year one and 101 in year two, the source continued.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance existing debt.

Bioventus is a Durham, N.C.-based orthopedic healing company.

Grocery Outlet guidance

Also in the primary, Grocery Outlet came out with price talk on its first- and second-lien term loans in connection with its bank meeting on Tuesday, and is asking investors to get their commitments in by Oct. 14, according to a market source.

The $440 million seven-year first-lien term loan B (B) is talked at Libor plus 400 bps to 425 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and the $210 million eight-year second-lien term loan (CCC+) is talked at Libor plus 750 bps to 775 bps with a 1% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two, the source said.

The company’s $725 million senior credit facility also includes a $75 million revolver (B).

Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc. and Jefferies Finance LLC are leading the deal that will be used to help fund the buyout of the Emeryville, Calif.-based grocery store operator by Hellman & Friedman LLC from Berkshire Partners LLC.

Sensata discloses talk

Sensata Technologies released price talk of Libor plus 275 bps with a 0.75% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for six months on its $600 million seven-year incremental term loan (Baa3) that launched with a call during the session, according to a market source.

Commitments are due by noon ET on Oct. 7, the source said.

Barclays, Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC and Goldman Sachs Bank USA are leading the deal that will be used with senior notes and cash from the balance sheet to fund the acquisition of Schrader International from Madison Dearborn Partners LLC for $1 billion.

Senior secured leverage is 1.7 times, total leverage is 4.1 times and net total leverage is 3.9 times.

Closing is expected in the fourth quarter, subject to regulatory approval.

Sensata is a supplier of sensing, electrical protection, control and power management services. Schrader is a Denver-based manufacturer of sensing and valve products for the automotive and industrial segments.

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