Cellular South, Virtu break; Ashland, Crown, INC Research, inVentiv, Primedia revise deals

By Sara Rosenberg

New York, July 7 - Cellular South Inc. and Virtu Financial Inc. freed up for trading on Thursday above their original issue discount prices, Neiman Marcus Inc.'s term loan was stronger after the company announced positive June revenues results and NCO Group Inc.'s term loan headed higher with merger news.

Over in the primary, Ashland Inc. came out with a number of changes to its credit facility, including upsizing its revolver and term loan A and downsizing its term loan B, while cutting pricing and the original issue discount.

Also, Crown Media Holdings Inc. flexed pricing higher on its term loan and finalized the discount at the high end of guidance, and INC Research LLC reduced the size of its term loan B, firmed pricing at the high side of talk and increased the discount price.

Additionally, inVentiv Health widened price talk on its incremental loan, and Primedia Inc. moved the spread and discount on its B loan higher, while shortening the tenor and adding call protection.

Furthermore, Autoparts Holdings Ltd., OM Group Inc., DG FastChannel Inc., Ipreo Holdings LLC and MCCI Medical Group disclosed price talk as they launched to lenders during the session, Reynolds Group revealed timing and size on its bank debt, and U.S. Security Associates Inc. emerged with new deal plans.

Cellular South frees up

Cellular South's credit facility began trading on Thursday, with the $600 million six-year term loan B quoted ay 99 7/8 bid, par 3/8 offered, according to a trader.

Pricing on the term loan B is Libor plus 350 basis points with a 1% Libor floor that firmed at the tight end of the 1% to 1.25% talk, and the debt was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

The company's $800 million credit facility also has a $200 million five-year revolver priced at Libor plus 250 bps with a 50 bps unused fee.

Bank of America Merrill Lynch is the lead bank on the deal that will be used to refinance existing debt and pay a $20 million dividend as well as for general corporate purposes.

Cellular South is a Ridgeland, Miss.-based privately held wireless provider.

Virtu tops OID

Virtu Financial's $320 million five-year term loan also hit the secondary market, with levels quoted at 98½ bid, 99½ offered, according to a trader.

Pricing on the loan is Libor plus 600 bps with a 1.5% Libor floor, and it was sold at a discount of 98, after flexing up from Libor plus 500 bps with a 1.25% floor and discount of 99. There is 101 soft call protection for one year that was added during syndication.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch and Barclays Capital Inc. are the joint lead arrangers and bookrunners on the deal that will be used to help fund the company's merger with Madison Tyler Holdings LLC, a Los Angeles-based market maker and electronic trading firm.

As part of the merger, Virtu, a New York-based electronic market maker and financial technology developer, will receive a strategic growth investment from Silver Lake.

Senior secured leverage is 1.2 times and net total leverage is 0.5 times.

Neiman trades higher

Neiman Marcus' term loan gained some ground in the secondary market following the company's release of preliminary revenues for June, according to traders.

The term loan was quoted by one trader at 99 1/8 bid, 99 5/8 offered, up from 98¾ bid, 99¼ offered. A second trader, meanwhile, only had the deal offered higher, putting levels at 98¾ bid, 99¼ offered versus 98 7/8 bid, 99 1/8 offered on Wednesday.

For June, the company reported total revenues of $375 million, up 12.7% from $333 million in the prior year, and comparable revenues of $374 million, up 12.5% from $333 million in June 2010.

Neiman is a Dallas-based high-end specialty retailer.

NCO rises on merger

NCO Group's term loan B moved to 99 bid, par offered from 98½ bid, 99½ offered as the company's sponsor, One Equity Partners, said that it is purchasing APAC Customer Services Inc. and then merging it with NCO, according to a trader.

Under the acquisition agreement, APAC stockholders will get $8.55 per share in cash. The aggregate equity value is $470 million.

Funds for the transaction will come from a new credit facility and equity.

Closing is expected in the fourth quarter, subject to the satisfaction of customary conditions, including Hart-Scott-Rodino clearance and approval of APAC's shareholders.

NCO is a Horsham, Pa.-based provider of business process outsourcing services. APAC is a Bannockburn, Ill.-based provider of customer care services and solutions.

Ashland reworks deal

Moving to the primary, Ashland revised its credit facility, increasing revolver and term loan A sizes and decreasing its term loan B size while making issuer friendly changes to pricing, according to a market source.

The five-year revolver is now $1 billion, up from $750 million, and the five-year term loan A is now $1.5 billion, up from $1.2 billion, with pricing on both tranches remaining at Libor plus 225 bps, the source said.

Meanwhile, the seven-year term loan B is now $1.4 billion, down from $1.7 billion, pricing was reduced to Libor plus 275 bps from Libor plus 300 bps, a 25 bps step-down based on leverage was eliminated, the original issue discount moved to 99¾ from 99½ and 101 soft call protection for one year was added, the source continued. The tranche still has a 1% Libor floor.

Allocations on the $3.9 billion deal (BB), up from $3.65 billion, are expected to go out next week.

Ashland lead banks

Citigroup Global Markets Inc., Scotia Capital (USA) Inc., Bank of America Merrill Lynch and U.S. Bank are the joint lead arrangers and bookrunners on Ashland's credit facility.

Proceeds, along with cash on hand, will be used to fund the acquisition of International Specialty Products Inc., a Wayne, N.J.-based specialty chemical manufacturer of functional ingredients and technologies, for $3.2 billion in cash.

Pro forma for the transaction, secured debt to adjusted EBITDA is 3.2 times, secured net debt to adjusted EBITDA is 2.7 times, total debt to adjusted EBITDA is 3.5 times, and total net debt to adjusted EBITDA is 2.9 times.

Closing is expected prior to the end of the September quarter, subject to satisfaction of customary conditions and receipt of U.S. and European Union regulatory approvals.

Ashland is a Covington, Ky.-based provider of specialty chemical products and services.

Crown Media raises spread

Crown Media Holdings revised pricing on its $210 million seven-year term loan B to Libor plus 450 bps from the Libor plus 400 bps area and set the original issue discount at 99, the wide end of talk of 99 to 991/2, according to a market source.

As before, the loan has a 1.25% Libor floor and 101 soft call protection for one year.

The company's $240 million credit facility (Ba2/BB-) also provides for a $30 million five-year revolver.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to refinance existing intercompany debt and preferred stock.

Crown Media is a Studio City, Calif.-based owner and operator of pay television channels, including the Hallmark Channel and Hallmark Movie Channel.

INC Research cuts size

INC Research trimmed its term loan B to $300 million from $350 million following an upsizing to its senior notes offering to $300 million from $250 million, according to market sources.

Pricing on the term loan B firmed at Libor plus 575 basis points, the wide end of revised talk of Libor plus 550 bps to 575 bps, sources said. Earlier in syndication, price talk on the deal was lifted from Libor plus 475 bps to 500 bps.

Also, the original issue discount widened to 97 from recent talk of 98 and original talk of 99, and 101 soft call protection for one year was added, sources continued.

The 1.25% Libor floor was left unchanged.

Morgan Stanley & Co. Inc., ING Financial Markets LLC and RBC Capital Markets LLC are the lead banks on the now $375 million credit facility (Ba3/B+), down from $425 million, which also includes a $75 million revolver.

INC acquiring Kendle

Proceeds from INC Research's credit facility, notes and equity will be used to fund the acquisition of Kendle International Inc. for $15.25 per share in cash. The total equity value is roughly $232 million.

The notes priced on Thursday at par to yield 11½%.

Closing on the transaction is expected in the third quarter, subject to approval by Kendle's shareholders as well as satisfaction of customary conditions and regulatory approvals.

Allocations on the credit facility are expected to go out next week.

INC Research is a Raleigh, N.C.-based therapeutically focused contract research organization privately held by Avista Capital Partners and Ontario Teachers' Pension Plan. Kendle is a Cincinnati-based clinical research organization.

inVentiv Health flexes

inVentiv Health raised price talk on its $245 million seven-year incremental term loan (B1/BB-) to Libor plus 500 bps to 525 bps from Libor plus 425 bps to 450 bps, while leaving the 1.5% Libor floor, original issue discount of 99 and 101 soft call protection for one year unchanged, according to a market source.

Citigroup Global Markets Inc., Bank of America Merrill Lynch and Jefferies & Co. Inc. are the lead banks on the deal that will be used, along with $390 million of notes and $50 million of cash on hand, to fund the acquisition of PharmaNet Development Group from JLL Partners Inc.

Net senior secured leverage is 3.28 times and total net debt is 5.81 times.

inVentiv is a Somerset, N.J.-based provider of clinical, consulting and commercial services to the health care industry. PharmaNet is a Princeton, N.J.-based provider of drug development services.

Primedia tweaks loan

Primedia moved pricing on its $275 million term loan B to Libor plus 600 bps from Libor plus 500 bps, increased the original issue discount to 96 from talk of 98½ to 99, added call protection of 102 in year one and 101 in year two and shortened the maturity to 6½ years from seven years, according to a market source. The 1.5% Libor floor was left unchanged.

The company's $315 million credit facility (B) also includes a $40 million five-year revolver that will be undrawn at close.

Bank of America Merrill Lynch, Barclays Capital Inc., UBS Securities LLC and RBC Capital Markets LLC are the lead banks on the deal that will be used with equity to fund the buyout of the company by TPG Capital for $7.10 per share in cash. The transaction enterprise value is about $525 million.

Closing will occur this quarter, subject to customary conditions, including Hart-Scott-Rodino.

Primedia is a Norcross, Ga.-based provider of internet, mobile and print guides to help people find apartments, houses for rent or new homes for sale.

Autoparts reveals talk

In more primary happenings, Autoparts Holdings held a bank meeting on Thursday to kick off syndication on its proposed credit facility, and in conjunction with the launch, price talk on the first-and second-lien term loans was announced, according to a market source.

The $530 million first-lien term loan (B1/B+) is being talked at Libor plus 500 bps with a 1.5% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, the source said.

And, the $150 million second-lien term loan (Caa1/B-) is being talked at Libor plus 900 bps with a 1.5% Libor floor, an original issue discount of 99, and call protection of 103 in year one, 102 in year two and 101 in year three, the source continued.

The company's $730 million senior secured credit facility also includes a $50 million revolver (B1/B+).

Autoparts being acquired

Proceeds from Autopart's credit facility, along with about $307 million of equity, will be used to fund the acquisition of Honeywell's automotive Consumer Products Group (Autoparts Holdings) by Rank Group in a cash transaction valued at about $950 million.

Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc. and Nomura are the joint lead arrangers on the deal.

Closing is expected in the third quarter, subject to regulatory approval and customary conditions. It is not subject to financing.

Autoparts Holdings is a Danbury, Conn.-based supplier to the light- and heavy-duty vehicle aftermarket for replacement parts.

OM Group guidance surfaces

OM Group disclosed price talk on its $900 million senior secured credit facility as well, as it too launched with a bank meeting during the day, according to a market source.

The $200 million revolver that is anticipated to be undrawn at close and the $100 million term loan A are being talked at Libor plus 375 bps with no Libor floor, the U.S. term loan B is being talked at Libor plus 475 bps and the euro term loan B is being talked at Euribor plus 500 bps, the source said.

The entire term loan B tranche, which totals $600 million, has a 1.5% floor, an original issue discount of 99 and 101 soft call protection for one year.

Bank of America Merrill Lynch, PNC Capital Markets LLC and BNP Paribas Securities Corp. are the lead banks on the deal.

OM Group leverage levels

Following completion of the deal, OM Group expects that its net debt to EBITDA ratio will be below 2.0 times, according to an 8-K filed with the Securities and Exchange Commission on Thursday.

Proceeds from the credit facility, $50 million of common equity and cash on hand will be used to fund the €700 million acquisition of Vacuumschmelze Holding GmbH, a Hanau, Germany-based manufacturer of industrial use advanced magnetic materials and fabricated products.

Closing is expected by the end of the third quarter, subject to customary conditions and regulatory approvals.

OM Group is a Cleveland-based solutions provider of specialty chemicals, advanced materials, electrochemical energy storage and unique technologies.

DG FastChannel pricing

DG FastChannel launched its $490 million seven-year term loan B on Thursday afternoon with talk of Libor plus 425 bps to 450 bps with a 1.25% Libor floor, an original issue discount of 99 to 99½ and 101 soft call protection for one year, according to a market source.

Official talk came out different than what the company had outlined in filings with the SEC, which has the B loan expected at Libor plus 350 bps with a 1.25% Libor floor and an original issue discount of 991/2.

The company's $640 million facility (BB-) also includes an up to $150 million five-year revolver.

Based on the filings, the revolver was initially expected to be sized at $100 million.

J.P. Morgan Securities LLC and Bank of America Merrill Lynch are leading the deal and are asking for commitments by July 15.

DG funding acquisition

Proceeds from DG FastChannel's credit facility will be used to help fund the acquisition of MediaMind Technologies Inc. for $22 per share in cash through a tender offer, which commenced on June 28 and expires on July 22.

The total transaction value is $517 million equity value or $414 million enterprise value, taking into account over $100 million in cash on MediaMind's balance sheet.

Closing is expected in the third quarter, subject to the successful completion of the tender offer, regulatory approval and customary conditions. Early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has already been obtained.

DG FastChannel is an Irving, Texas-based provider of digital media services to the advertising, entertainment and broadcast industries. MediaMind is a New York-based provider of integrated digital advertising services.

Ipreo Holdings launches

Yet another deal to launch and release guidance was Ipreo Holdings, with its $170 million credit facility (B1) talked at Libor plus 650 bps with a 1.5% Libor floor and an original issue discount of 98, according to a market source.

The facility consists of a $150 million term loan, which includes 101 soft call protection for one year, and a $20 million revolver.

RBC Capital Markets LLC is the lead bank on the deal that will be used, along with $70 million of mezzanine debt from Crescent Capital, to fund the buyout of the company by Kohlberg Kravis Roberts & Co. LP from Veronis Suhler Stevenson.

Ipreo is a New York-based capital markets and corporate analytics firm.

MCCI Medical sets talk

MCCI Medical Group also held a bank meeting on Thursday, at which time its $155 million credit facility was launched with talk of Libor plus 450 bps to 500 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

The facility consists of a $15 million revolver and a $140 million first-lien term loan.

The company is also getting a $40 million second-lien term loan that is not being syndicated.

GE Capital Markets and SunTrust Robinson Humphrey Inc. are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

MCCI Medical Group is a Miami-based operator of medical centers.

Reynolds details emerge

Over in the topic of deals coming up, Reynolds Group announced in a news release that it has set a bank meeting for Monday in New York to launch a $2 billion senior secured term loan that is being done pursuant to an amendment to its existing credit agreement.

In addition, the company plans on getting $1.5 billion of senior secured debt and $500 million of senior unsecured debt.

The amount of debt that the company is getting is lower than previously expected. Originally, the company had said that it would get $5 billion of new debt for the acquisition in the form of new term loans, the issuance of notes or other debt.

Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. are the lead banks on the deal.

Reynolds buying Graham

Proceeds from Reynolds Group's term loan, notes and cash on hand will be used to fund the acquisition of Graham Packaging Co. Inc. for $25.50 per share, or a total of about $4.5 billion, including assumed debt.

Pro forma for the anticipated financing, net senior secured leverage is estimated to be under 3.5 times and net total leverage is estimated to be 6.0 times

Closing is expected in the second half of this year, subject to customary regulatory approvals and closing conditions, including the approval of Graham's stockholders.

Reynolds Group is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products. Graham is a York, Pa.-based supplier of plastic containers.

U.S. Security readies deal

U.S. Security Associates has set a bank meeting for Tuesday to launch a proposed $435 million credit facility that is being led by Goldman Sachs & Co., KeyBanc Capital Markets LLC and Wells Fargo Securities LLC, according to a market source.

The facility consists of a $75 million five-year revolver, a $75 million six-year delayed-draw term loan and a $285 million six-year term loan, the source said.

Proceeds will be used to help fund the buyout of the Roswell, Ga.-based security firm by Goldman Sachs Private Equity.

SRA fills out

In other news, SRA International Inc.'s $975 million senior secured credit facility (B1/B) was oversubscribed by Wednesday's commitment deadline and allocations are now targeted to go out next week, according to a market source.

The facility consists of an $875 million seven-year term loan priced at Libor plus 525 bps with a 1.25% Libor floor and an original issue discount of 95, and a $100 million five-year revolver.

During syndication, pricing on the term loan had been increased from talk of Libor plus 425 bps to 450 bps, the Libor floor was cut from 1.5% and the discount widened from 99.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. are the joint lead arrangers and bookrunners on the deal.

SRA plans notes

In addition to the credit facility, SRA plans on getting $400 million of senior notes, which are backed by a commitment for a senior unsecured interim loan priced at Libor plus 725 bps with a 1.25% Libor floor, increasing to a specified cap.

Proceeds from the new debt, equity and shares of SRA common stock contributed by the rollover investor will be used to fund the buyout of the company by Providence Equity Partners for $31.25 in cash per share for a total value of $1.88 billion.

Closing is expected during the first quarter of fiscal year 2012, which began on July 1, subject to shareholder approval and regulatory approvals.

SRA is a Fairfax, Va.-based provider of technology and strategic consulting services to government organizations and commercial clients.

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