Smart Modular Technologies increases term loan B size to $310 million

By Sara Rosenberg

New York, Aug. 15 - Smart Modular Technologies Inc. upsized its six-year first-lien term loan B (B2/B+) to $310 million from $300 million to account for higher pricing and an expected wider original issue discount price, according to a market source.

As was previously reported, pricing on the term loan B moved a while ago to Libor plus 700 basis points from talk in the Libor plus 650 bps area.

There is a 1.25% Libor floor and call protection of 103 in year one, 102 in year two and 101 in year three.

The call protection had been sweetened earlier from 102 in year one and 101 in year two and the maturity was shortened from seven years.

Early this month, sources were hearing that the B loan was being shopped in the low-90 context, and that still appears to be the case, the source remarked. Initially, the original issue discount was talked at 98 to 981/2.

Smart Modular's $360 million senior secured credit facility, up from $350 million, also includes 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.

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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