Manitowoc Foodservice firms discount; Keurig updates term B tranching, pricing, OID

By Sara Rosenberg

New York, Feb. 5 – Manitowoc Foodservice Inc. finalized the original issue discount on its term loan B at the wide end of guidance on Friday, and Keurig Green Mountain Inc. revised sizes on its U.S. and euro term loan B’s, widened spread and original issue discount talk and extended the call protection.

Also on the primary front, Solera Holdings Inc. released timing on the launch of its term loan B.

Manitowoc sets OID

Manitowoc Foodservice firmed the original issue discount on its $975 million term loan B (B+) at 98, the wide end of the 98 to 98.5 talk, according to a market source.

As before, the B loan is priced at Libor plus 475 basis points with a 1% Libor floor and has 101 soft call protection for one year.

J.P. Morgan Securities LLC and Goldman Sachs Bank USA are leading the deal that will be used to help fund the spin-off of the company from Manitowoc Co. Inc.

Closing is expected this month.

Manitowoc Foodservice is a New Port Richey, Fla.-based commercial foodservice equipment company.

Keurig modifies deal

Keurig lifted its euro seven-year covenant-light term loan B to up to €900 million from €250 million and raised pricing to Euribor plus 425 bps from talk of Euribor plus 375 bps to 400 bps, according to a market source.

Additionally, the U.S. seven-year covenant-light term loan B is being downsized from $2,675,000,000, with the final size still to be determined, and pricing was flexed up to Libor plus 450 bps from talk of Libor plus 375 bps to 400 bps, the source said.

Furthermore, original issue discount talk on the total $2.95 billion U.S. and euro term loan B was changed to 98 to 98.5 from 99, and the 101 soft call protection was pushed out to one year from six months.

As before, the term loan B’s have a 0.75% floor.

Recommitments were due at 5 p.m. ET on Friday, the source added.

The company’s $6.4 billion senior secured credit facility (Ba3/BB) also provides for a $500 million five-year revolver and a $2.95 billion five-year term loan A.

Keurig lead banks

J.P. Morgan Securities LLC, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and Rabobank are leading Keurig’s credit facility.

Proceeds will be used with about $8.5 billion in equity to fund the acquisition of the company for $92.00 per share in cash, or a total equity value of about $13.9 billion, by a JAB Holding Co.-led investor group, and to refinance existing debt.

JAB is buying Keurig in partnership with strategic minority investors who are already shareholders in Jacobs Douwe Egberts BV, a coffee company, including Mondelez International and entities affiliated with BDT Capital Partners.

Closing is expected on or about Feb. 29, subject to customary conditions, including receipt of regulatory approvals and shareholder approval. The transaction is not subject to a financing condition.

Keurig is a Waterbury, Vt.-based personal beverage system company.

Solera timing emerges

Solera set a bank meeting for Tuesday to launch its previously announced $1.9 billion covenant-light term loan B, a market source remarked.

According to filings with the Securities and Exchange Commission, the company is also expected to get a $300 million revolver as part of its $2.2 billion senior secured credit facility.

Goldman Sachs Bank USA, Citigroup Global Markets Inc., Jefferies Finance LLC, Macquarie Capital (USA) Inc., Nomura Securities International Inc. and UBS AG are leading the deal that will help fund the buyout of the company by Vista Equity Partners for $55.85 per share, or about $6.5 billion, including existing net debt.

Other funds for the transaction will come from up to $2.03 billion of senior notes, which are backed by a senior unsecured bridge loan commitment, $3.3 billion in equity and about $150 million in cash on hand, the SEC filings said.

Solera, a San Ramon, Calif.-based provider of software and services to the automobile insurance claims processing industry, expects the buyout to close this quarter.

SolarWinds closes

In other news, SolarWinds’ buyout by Silver Lake Partners and Thoma Bravo LLC for $60.10 per share, or about $4.5 billion in cash, was completed on Friday, according to an 8-K filed with the Securities and Exchange Commission.

To help fund the transaction, SolarWinds got a new $1.65 billion senior secured credit facility (B1/B) consisting of a $125 million revolver, a $1,275,000,000 seven-year covenant-light first-lien term loan and a $250 million euro equivalent seven-year covenant-light first-lien term loan.

Pricing on the term loan debt is Libor/Euribor plus 550 bps with a 1% floor, and it was sold at an original issue discount of 95. The loans have 101 soft call protection for one year.

During syndication, pricing on the term loans was increased from talk of Libor/Euribor plus 500 bps to 525 bps, the discount was revised from 98.5, and the call protection was extended from six months.

Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, Macquarie Capital (USA) Inc. and Nomura Securities International Inc. lead the deal for the Austin, Texas-based provider of IT management software.

Mattress Firm wraps

Mattress Firm Holding Corp. closed on its purchase of HMK Mattress Holdings LLC, the holding company of Sleepy’s and related entities, for $780 million, subject to working capital and other customary adjustments, a news release said.

For the transaction, Mattress Firm got a $665 million senior secured incremental first-lien term loan (Ba3/B+) due Oct. 20, 2021 priced at Libor plus 525 bps with a 1% Libor floor, and sold at an original issue discount of 97. The debt has 101 soft call protection for one year.

During syndication, the term loan was downsized from $730 million, pricing was raised from revised talk of Libor plus 500 bps and initial talk of Libor plus 450 bps to 475 bps, the discount widened from talk of 98.5 to 99, the call protection was extended from six months, and a total net leverage covenant was added to the originally covenant-light loan.

In addition to the incremental term loan, the company got a $200 million amended and extended five-year ABL revolver.

Mattress Firm leads

Barclays, J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Wells Fargo Securities LLC acted as the bookrunners on the deal.

With the incremental term loan, the company revised its existing $693 million term loan due Oct. 20, 2021 to mirror all terms of the new loan. As a result, the existing term loan has pricing set at Libor plus 525 bps with a 1% Libor floor, 101 soft call protection for one year and a total net leverage covenant.

Net secured and net total leverage is 3.9 times.

Mattress Firm is a Houston-based mattress retailer. Sleepy’s is a Hicksville, N.Y.-based mattress retailer.

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