Hilite, Lincoln, ServiceMaster set talk; IntraLinks tweaks tranching; Sheridan Healthcare breaks

By Sara Rosenberg

New York, June 13 - Hilite International and Lincoln Industrial Corp. announced price talk on their credit facilities as the deals were launched to investors on Wednesday and the ServiceMaster Co. came out with guidance on its credit facility as it's getting ready to launch with a bank meeting on Thursday.

In other primary news, IntraLinks Inc. made some changes to the structure of its credit facility by eliminating the PIK toggle first-lien term loan B and upsizing the cash pay first-lien term loan and second-lien term loan.

Meanwhile, in the secondary market, Sheridan Healthcare Inc.'s credit facility freed up for trading, with the first-lien term loan quoted atop par.

Hilite held a bank meeting on Wednesday to kick off syndication on its $190 million credit facility, and in connection with the launch, price talk on the transaction emerged, according to a market source.

The $25 million revolver (BB-) and the $95 million first-lien term loan (BB-) were both presented with talk in the Libor plus 325 basis points area, and the $70 million second-lien term loan (B-) was presented with talk in the Libor plus 675 bps area, the source said.

The second-lien term loan carries call protection of 102 in year one and 101 in year two, the source added.

Bear Stearns is the sole lead bank on the deal, which will be used to refinance existing debt.

Hilite is a Cleveland-based supplier of automotive components.

Lincoln guidance surfaces

Lincoln Industrial also came out with price talk on its proposed credit facility as it too held a bank meeting during market hours to launch the deal into syndication, according to a market source.

The $25 million revolver (B1/BB-) and the $300 million first-lien term loan B (B1/BB-) were both launched with talk of Libor plus 250 bps, and the $140 million second-lien term loan (Caa1/B) was launched with talk of Libor plus 575 bps, the source said.

JPMorgan is the lead bank on the $465 million deal.

Proceeds will be used to refinance existing debt, to fund a dividend to shareholders and to finance future acquisitions.

Lincoln is a St. Louis-based manufacturer of automatic lubrication systems and manual lubrication equipment.

ServiceMaster price talk

Continuing on the price talk topic, ServiceMaster released guidance on its $3.35 billion senior secured credit facility (B1/B+) as the transaction is getting ready to launch to retail investors with a bank meeting on Thursday at the Rainbow Room in New York, according to a market source.

The $2.65 billion seven-year term loan B, the $200 million seven-year pre-funded synthetic letter-of-credit facility and the $500 million six-year revolver are all being talked at Libor plus 225 bps, the source said.

All tranches under the facility are covenant-light.

Citigroup, JPMorgan, Bank of America, Goldman Sachs and Morgan Stanley are the lead banks on the deal, and there are nine senior managing agents.

Proceeds will be used to help fund the leveraged buyout of the company by Clayton, Dubilier & Rice, Inc. for $15.625 in cash per share. The total enterprise value is $5.5 billion, including the assumption of existing ServiceMaster debt.

Other buyout financing will come from $1.15 billion of unsecured senior debt and $1.431 billion in equity, according to filings with the Securities and Exchange Commission.

In connection with the transaction, ServiceMaster's existing credit facility, 6.95% notes due Aug. 15, 2007 and 7 7/8% notes due Aug. 15, 2009 will all be repaid.

The company's 7.10% notes due March 1, 2018, 7.45% notes due Aug. 15, 2027, 7¼% notes due March 1, 2038, and about $450 million in capital leases and deferred payment obligations are expected to remain outstanding following the buyout.

Completion of the transaction is contingent upon customary closing conditions, including the approval from holders of a majority of ServiceMaster's outstanding shares and regulatory approval.

The special meeting of stockholders is scheduled for June 28.

ServiceMaster is a Downers Grove, Ill., provider of services to residential and commercial customers, including lawn care and landscape maintenance, termite and pest control, home warranties, disaster response and reconstruction, cleaning and disaster restoration, house cleaning, furniture repair and home inspection.

IntraLinks retranches

IntraLinks modified tranching under its credit facility by increasing the size of both its cash pay first-lien and second-lien term loans and removing the $50 million PIK toggle first-lien term loan (B1/B) from the capital structure, according to a market source.

The cash pay first-lien term loan B (B1/B) is now sized at $135 million, up from $100 million, while pricing was left unchanged at Libor plus 275 bps, the source said.

Meanwhile, the second-lien term loan (Caa1/CCC+) is now sized at $65 million, up from $50 million, the source continued. Of the total second-lien term loan amount, $30 million is fixed pay at 11% and $35 million is PIK toggle at Libor plus 575 bps cash pay.

The $50 million PIK toggle first-lien term loan that was eliminated was being talked at Libor plus 300 bps, with a step up by 50 bps if PIK was elected.

IntraLinks' $290 million credit facility also includes a $15 million revolver (B1/B) priced at Libor plus 275 bps and a $75 million holdco PIK loan priced at 12% for the first two years and 13% after that.

Deutsche Bank and Credit Suisse are the joint bookrunners and joint lead arrangers on the deal.

Proceeds will be used to help fund the leveraged buyout of IntraLinks by TA Associates and Rho Capital Partners.

IntraLinks is a New York-based provider of secure, collaborative online digital workspaces for conducting financial transactions, exchanging documents and collaborating with advisers, customers and suppliers.

Sheridan frees to trade

Moving to the secondary, Sheridan Healthcare's credit facility allocated and freed up for trading, with the $395 million seven-year first-lien term loan B (B1/B) quoted at par ¼ bid, par 5/8 offered, according to a trader.

The first-lien term loan B is priced at Libor plus 250 bps, with a step down to Libor plus 225 bps when leverage is less than 5.75 times.

During syndication, the first-lien term loan B was upsized from $375 million, pricing firmed at the wide end of original talk of Libor plus 225 bps to 250 bps and the step down was added.

Sheridan Healthcare's $620 million credit facility also includes a $75 million six-year revolver (B1/B) priced at Libor plus 250 bps and a $150 million eight-year PIK toggle for life second-lien term loan (Caa1/CCC+) priced at Libor plus 575 bps cash pay.

If the company opts for PIK pricing on the second-lien loan, then the spread will increase by 75 bps.

The second-lien loan carries call protection of 102 in year one and 101 in year two.

During syndication, pricing on the revolver firmed up at the high end of original talk of Libor plus 225 bps to 250 bps, and the second-lien term loan was downsized from $170 million with pricing firming up at the high end of talk of Libor plus 550 bps to 575 bps cash pay.

All tranches under the facility are covenant-light.

Lehman, UBS, Credit Suisse and Citigroup are the bookrunners on the deal, with Lehman and UBS the joint lead arrangers.

Proceeds will be used to help fund Hellman & Friedman's acquisition of the company from J.W. Childs Associates LP.

Sheridan is a Sunrise, Fla., physician practice management company.

LCDX stronger, cash down

LCDX ended the day stronger as it cashed in on equity's improvement in the afternoon; however, the cash loan market was a bit slower to respond leaving it generally down on the day, according to a trader.

The index went out at 100.28 bid, 100.33 offered, up from 100.22 bid, 100.27 offered, the trader said.

Meanwhile, the cash loan market in general was down by about an eight of a point, the trader remarked.

"LCDX was down all day and then rebounded late in the day with the late day equity rally. Cash market kind of slowed down late day. I would expect cash would open up a touch higher tomorrow," the trader added.

Hub closes

Apax Partners and Morgan Stanley Principal Investments completed their acquisition of Hub International Ltd. for $41.50 per share in cash, according to a news release.

To help fund the buyout, Hub got a new $865 million senior secured credit facility (B2/B) consisting of a $100 million six-year revolver, a $625 million seven-year funded term loan priced at Libor plus 250 bps and a $140 million seven-year final maturity delayed-draw term loan priced at Libor plus 250 bps.

During syndication, the funded term loan was upsized from $535 million as the company downsized its bond offering to $700 million from $790 million, and pricing on the funded and delayed-draw loans was reverse flexed from original talk of Libor plus 275 bps.

Morgan Stanley and Merrill Lynch acted as the joint bookrunners and joint lead arrangers on the deal, with Morgan Stanley the administrative agent and Merrill Lynch the syndication agent.

Hub is a Chicago-based insurance broker.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.