Sun Products gets $175 million incremental first-lien term loan, $625 million mezzanine

By Sara Rosenberg

New York, July 28 - The Sun Products Corp. is using a $175 million incremental first-lien term loan and $625 million of mezzanine debt to help fund its formation through the purchase of Unilever's laundry business and merger with Huish Detergents Inc., according to a market source.

GE Capital provided the incremental first-lien term loan, the source said. The debt is being layered into Huish's existing credit facility, which is remaining in place following the close of the acquisition.

When obtained last year, the Huish facility consisted of a $100 million revolver at Libor plus 225 basis points, a $650 million first-lien term loan at Libor plus 200 bps and a $225 million second-lien term loan at Libor plus 425 bps.

As for the mezzanine debt, JPMorgan and Lehman Brothers led the financing, which has already been placed. Pricing on the mezzanine is 14% and it was sold at an original issue discount of 98, the source added.

Under the transaction agreement, Vestar Capital Partners is purchasing Unilever's laundry business for $1.45 billion.

Huish, which is a manufacturer of detergents, fabric softeners, dish care and personal care products that has been majority owned by Vestar since April 2007, will then be merged with the Unilever business and the new combined company will be named Sun Products.

The consideration consists of a cash payment of $1.075 billion, preferred shares of Sun Products with a face value of $375 million, and warrants offering the opportunity to acquire up to 2.5% of the combined common equity in Sun Products.

The transaction is expected to close during the next couple of months, subject to regulatory review and customary closing conditiosns.

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