Tata postponed; Open Text downsizes; Stolle, AlixPartners, Ace talk; Applied Systems firms spreads

By Sara Rosenberg

New York, Sept. 14 - Tata Coffee Ltd. has pushed off the previously expected Thursday launch of its proposed credit facility on scheduling conflicts, and Open Text Corp. trimmed the size of its term loan B as it decided to make use of some extra cash on the balance sheet.

In other primary news, Stolle Machinery Co. LLC, AlixPartners LLC and ACE Cash Express Inc. came out with price talk on their credit facilities as the deals were launched Thursday, and Applied Systems Inc. firmed pricing on its in-market credit facility.

Tata Coffee had to postpone its Thursday bank meeting because of scheduling issues and is now trying to figure out a new date for the launch of its proposed $183 million credit facility, according to a market source.

The Rabo Bank led deal is still hoped to be September business.

The facility consists of a $15 million revolving credit facility, a $105 million first-lien term loan and a $63 million second-lien term loan.

Proceeds will be used to help fund the acquisition of Montvale, N.J.-based Eight O'Clock Coffee Co. from Gryphon Investors for a total acquisition price of $220 million.

Tata Coffee is an India-based coffee company.

Open Text cuts B loan size

Open Text decided to reduce the size of its in-market term loan B tranche to $390 million from $415 million and, instead, use $25 million more of cash on hand to help finance its acquisition of Hummingbird Ltd., according to a market source.

"They just had a lot of extra liquidity. Revolver will be undrawn at close and they will still have $75 million of cash on hand," the source said in explanation of the decision to downsize.

Price talk on the term loan B was left unchanged at the Libor plus 225 basis points area, the source added.

Open Text's now $465 million credit facility (Ba3/BB-) also includes a $75 million revolver talked in the Libor plus 225 basis points area.

RBC Capital Markets is the lead bank on the deal that will be used to help fund the approximately $489 million Hummingbird acquisition.

Open Text is a Waterloo, Ont., provider of enterprise content management software solutions. Hummingbird is a Toronto, Ont., provider of enterprise software solutions.

Stolle spread guidance

Stolle Machinery released opening price talk on its proposed first- and second-lien $200 million credit facility as the deal was presented to lenders with a bank meeting Thursday morning at the St. Regis in New York, according to a market source.

The company's $25 million five-year revolver (Ba3/BB-) and $115 million six-year term loan B (Ba3/BB-) were launched to investors with talk of Libor plus 275 basis points, and the $60 million seven-year second-lien term loan (Caa1/B) was launched to investors with talk of Libor plus 675 basis points, the source said.

The revolver carries a 50 basis point commitment fee.

Call premiums on the second-lien term loan are 102 in year one and 101 in year two.

As for the actual bank meeting, it was very well-attended and the deal seems to have sparked some positive buzz and early interest as investors were impressed that the company has over an 85% market share in its business, the source added.

Goldman Sachs and Credit Suisse are joint lead arrangers on the deal that will be used to help fund the leveraged buyout of Stolle by Littlejohn & Co.

Stolle is a Denver-based producer of capital equipment, spare parts and services for the rigid packaging industry.

AlixPartners price talk

AlixPartners announced opening price talk of Libor plus 250 basis points on all tranches under its proposed $435 million credit facility (B1/BB-) at its Thursday morning bank meeting, according to a market source.

Tranching on the facility consists of a $50 million revolver and a $385 million term loan B.

Lehman and Deutsche Bank are the lead banks on the deal, with Lehman the left lead.

Proceeds will be used to help fund the acquisition of the company by Hellman & Friedman LLC. AlixPartners' 78 managing directors, along with the remainder of its more than 500 employees, also will gain a considerable equity stake in the enterprise.

The transaction puts the total enterprise value of the firm in excess of $800 million.

AlixPartners is a Southfield, Mich., provider of operational management, risk evaluation, corporate restructuring, and legal and financial advisory services to underperforming and troubled companies.

ACE talk surfaces

ACE Cash Express came out with official price talk on its proposed $400 million credit facility as it launched with a bank meeting Thursday afternoon, with the $275 million five-year asset-based revolver talked at Libor plus 150 basis points and the $125 million seven-year term loan B (B3/B+) talked at Libor plus 300 to 325 basis points, a market source told Prospect News.

Prior to the launch, available expected pricing levels came from company filings with the Securities and Exchange Commission, which had the revolver anticipated at Libor plus 175 basis points and the term loan B anticipated in the area of Libor plus 300 to 400 basis points.

Of the total revolver amount, $50 million is seasonal and will be available from January through March.

Bear Stearns is the bookrunner and administrative agent on the term loan. General Electric Capital Corp. is the bookrunner and administrative agent on the revolver.

Proceeds will be used to help fund the leveraged buyout of Ace by JLL Partners Fund V, LP for $30 per share in cash.

Other LBO financing will come from a proposed issuance of $175 million of eight-year senior unsecured notes and $178.8 million of equity.

ACE is an Irving, Texas, retailer of financial services, including check cashing, short-term consumer loans, bill payment and prepaid debit card services.

Applied Systems sets pricing

Applied Systems has firmed up spreads at Libor plus 300 basis points on all tranches under its proposed $250 million credit facility, the high end of original guidance at launch of Libor plus 275 to 300 basis points, according to a market source.

Tranching on the deal is comprised of a $220 million seven-year first-lien term loan B and a $30 million six-year revolver.

Credit Suisse and JPMorgan are the lead banks on the credit facility, with Credit Suisse the left lead.

Proceeds will be used to help fund the leveraged buyout of Applied Systems by Bain Capital Partners from Vista Equity Partners, LLC. Chairman and chief executive officer James P. Kellner will remain a significant investor in the company.

In addition to the credit facility, the company will be getting $165 million of eight-year mezzanine debt for acquisition financing.

Applied Systems is a University Park, Ill., provider of insurance agency and broker management system software.

Dura trades up

Switching to the secondary, Dura Automotive Systems Inc.'s second-lien term loan traded higher during Thursday's session possibly on some private news and possibly in reaction to bankruptcy speculation that was heard around the market, according to a trader.

The second-lien term loan closed the day quoted at 97½ bid, 98¼ offered, up about a point when compared to Wednesday's closing levels, the trader said.

However, the bank debt actually traded as high as two points better before settling in a touch by the close. Trades were seen going off as low as 96½ and as high as 98 during market hours, the trader added.

Dura Automotive is a Rochester Hills, Mich.-based designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the automotive industry.

Sonic closes

Sonic Corp. closed on its $775 million senior secured credit facility (Ba3/BB-) consisting of a $100 million five-year revolver and a $675 million seven-year term loan B, according to a company news release.

The term loan B is priced with an interest rate of Libor plus 200 basis points with a step down to Libor plus 175 basis points if ratings are upgraded to Ba2/BB. During syndication, pricing on the tranche firmed up at the low end of guidance of Libor plus 200 to 225 basis points due to oversubscription, with the addition of the step.

The revolver is priced with an initial interest rate of Libor plus 175 basis points and carries a 37.5 basis point commitment fee.

Bank of America and Lehman Brothers acted as joint lead arrangers on the deal, with Lehman also acting as syndication agent.

Proceeds are being used to fund a modified Dutch auction tender offer to purchase up to $560 million of the company's common stock and refinance certain existing debt.

The tender offer, which is subject to successful completion of the credit facility, was commenced on Aug. 15 and expires on Sept. 22.

After completion of the tender offer, subject to market conditions, the company may pursue a refinancing of its new senior secured credit facility with a securitized transaction and has engaged Lehman Brothers as its structuring adviser to evaluate the securitized transaction.

Sonic is an Oklahoma City-based chain of drive-in restaurants.

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