Smart Modular launch $300 million term loan at Libor plus 650 bps area

By Sara Rosenberg

New York, June 23 - Smart Modular Technologies Inc. launched its $300 million seven-year covenant-light first-lien term loan (B2/B+) on Thursday morning with price talk in the Libor plus 650 basis points context with a 1.25% Libor floor and an original issue discount of 98 to 981/2, according to sources.

The loan includes call protection of 102 in year one and 101 in year two, sources said.

The company's $350 million senior secured credit facility also provides for a $50 million five-year first-lien first-out revolver (B1).

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

Commitments are due on July 8.

Proceeds, along with up to $381 million of equity, 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.

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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