Stratus Technologies firms $225 million term B at Libor plus 500 bps

By Sara Rosenberg

New York, April 23 - Stratus Technologies Inc. set pricing on its $225 million seven-year term loan B at Libor plus 500 basis points, the wide end of the Libor plus 475 bps to 500 bps talk, and widened the original issue discount to 99 from 991/2, according to a market source.

Also, the 101 soft call protection was extended to one year from six months and a covenant was added, the source said.

The term loan still has a 1% Libor floor.

Amortization on the term loan is 5% per annum.

The company's $245 million credit facility (B2/B+) also includes a $20 million revolver.

Commitments were due at the close of business on Wednesday, the source added.

SunTrust Robinson Humphrey Inc. and Macquarie Capital (USA) Inc. are the leads on the deal.

Proceeds will be used to help fund the roughly $352 million buyout of the company by Siris Capital Group LLC.

Other funds for the transaction will come from equity.

Upon closing of the acquisition, all of the outstanding principal amount of senior secured notes of Stratus will be called for redemption at 112 plus accrued interest through the redemption date, and all of the outstanding amounts under its senior secured revolver and second-lien credit facility will be repaid in full.

Closing is subject to customary conditions, including the receipt of shareholder and regulatory approvals.

Gross leverage is 4.2 times, and net leverage is 3.8 times.

Stratus Technologies is a Maynard, Mass.-based provider of infrastructure-based solutions that keep applications running continuously.

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