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Sophos ups B loan to $229.5 million, spread to Libor plus 575 bps
By Sara Rosenberg
New York, June 24 - Sophos plc upsized its term loan B to $229.5 million from $225 million and increased pricing to Libor plus 575 basis points from the Libor plus 475 bps area, according to a market source.
In addition, the original issue discount on the term loan B was widened to 97 from the 99 context, which is why the tranche was upsized, the source said.
Also, 101 soft call protection for one year was added to the term loan B, the tenor was shortened to six years from seven years and amortization was increased to 3% per year from 1%.
As before, the term loan B includes a 2% Libor floor.
Commitments are due from lenders at the end of the day on Friday and allocations are hoped to go out at the end of next week.
Meanwhile, the company's $75 million six-year euro equivalent term loan A and $20 million six-year revolver were left unchanged in terms of size, but pricing on the tranches was flexed up to Libor plus 450 bps from Libor plus 400 bps, the source continued.
Other changes to the credit agreement include reducing the accordion feature to $75 million from $100 million and adding 25 bps of MFN, and increasing the excess cash flow sweep to 75% from 50%.
RBC and HSBC are the lead banks on the now $324.5 million senior secured credit facility (B2/B+), with RBC the left lead. These banks opted to hold on to the revolver and term loan A and only really syndicate the term loan B.
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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