Smart Modular expects $350 million loan spread at Libor plus 450 bps

By Sara Rosenberg

New York, May 25 - Smart Modular Technologies Inc. said in an SC 13E3 filed with the Securities and Exchange Commission on Wednesday that its proposed $350 million senior secured credit facility is anticipated to be priced at Libor plus 450 basis points with a 1.25% Libor floor.

The facility consists of a $300 million seven-year covenant-light first-lien term loan and a $50 million five-year first-lien first-out revolver.

The term loan is expected to be offered at an original issue discount of 991/2, and the revolver is expected to have a 50 bps unused fee and be offered with a 100 bps upfront fee.

There is a $25 million accordion feature.

J.P. Morgan Securities LLC and UBS Securities LLC are the lead arrangers and bookrunners on the deal.

Proceeds will be used to help fund the buyout of the company by Silver Lake Partners and Silver Lake Sumeru for $9.25 per share in cash. The transaction is valued at about $645 million.

Other funds for the acquisition will come from up to $381 million of equity.

Closing is expected in the third quarter, subject to receipt of shareholder and regulatory approval.

Smart Modular is a Newark, Calif.-based manufacturer of memory modules and solid state storage products.

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