Sophos talks $300 million of term loans at Libor plus 475 bps area

By Sara Rosenberg

New York, June 2 - Sophos plc is talking its $300 million of term loan debt in the Libor plus 475 basis points area with a 2% Libor floor and an original issue discount in the 99 context, according to a market source.

Of the total term loan amount, up to $100 million will be in euros with the remainder in dollars.

Initial indications were that the term debt would be comprised of a $90 million A loan and a $210 million B loan; however, those tranche sizes are preliminary and will likely be revised based on final investor demand, the source said.

Sophos' $320 million senior secured credit facility (B+) also includes a $20 million six-year revolver.

RBC and HSBC are the lead banks on the deal, with RBC the left lead.

A bank meeting for the facility took place on May 25, but price talk was not disclosed as the company was waiting on ratings.

Proceeds will be used to help fund the buyout of the company by Apax Partners in a transaction valued at $830 million.

When the transaction is completed, the founders of the company will retain a significant minority shareholding. TA Associates, a minority shareholder in Sophos since 2002, will sell its full interest to Apax in this transaction.

Leverage is around 3.8 times.

Sophos is a Boston-based IT security and data protection firm.

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