Research Now widens first- and second-lien term loan price talk

By Sara Rosenberg

New York, Dec. 4 – Research Now/Survey Sampling increased price talk on its $700 million seven-year first-lien term loan (B1/B+) to a range of Libor plus 525 basis points to 550 bps from a range of Libor plus 450 bps to 475 bps and increased price talk on its $250 million eight-year second-lien term loan (Caa1/B-) to Libor plus 950 bps from a range of Libor plus 850 bps to 875 bps, according to a market source.

Also, the original issue discount on the first-lien term loan was revised to 95 from 99, and the discount on the second-lien term loan was changed to talk in the range of 93 to 94 from 98.5, the source said.

Call protection on the first-lien term loan was modified to a 101 hard call for one year from a 101 soft call for six months, and call protection on the second-lien term loan was revised to non-callable for one year, then at 102 in year two and 101 in year three from 102 in year one and 101 in year two.

In addition, the incremental was changed to a $125 million first-lien starter with no grower from a $200 million first-lien starter with an EBITDA grower; the six-month MFN sunset and all carve-outs were removed; all incremental ratios are subject to 0.25 times inside of closing date leverage, instead of all incremental ratios being set at closing date net leverage or no worse than; and all “no worse than” prongs for the first- and second-lien were removed, the source continued.

The excess cash flow sweep was changed to 75% with step downs to 50%, 25% and 0% from 50% with step downs to 25% and 0% at 0.5 times and 0.75 times inside closing total net leverage, and the company removed carry forward of voluntary prepayments and buybacks of loans.

Furthermore, the EBITDA definition was changed to include addbacks to 18 months with a 20% cap on synergies/cost savings not related to the transaction from addback for 24 months, uncapped, and restricted payments and junior debt payments were adjusted to unlimited subject to 1.75 times inside closing date total net leverage from unlimited subject to 1 time inside closing date total net leverage.

Investments were revised to unlimited subject to 1.5 times inside closing date total net leverage from unlimited subject to 0.75 times inside closing date total net leverage, available amount was changed to $25 million starter with no grower from $25 million started with an EBITDA grower, and the ability to reclassify debt and liens was removed.

Both term loan still have a 1% Libor floor.

Goldman Sachs Bank USA, Bank of America Merrill Lynch, Jefferies LLC and Citizens Bank are the leads on the $950 million in senior secured term loans.

Recommitments are due at 5 p.m. ET on Wednesday.

Proceeds will be used to help fund the merger of Research Now and Survey Sampling International and fund a $180 million dividend, reduced from $191 million. The combined company will be privately held, with Court Square Capital Partners and HGGC, the current majority owners of Research Now and Survey Sampling, respectively, remaining as majority owners of the combined business.

Closing is expected by the end of the year, after the standard regulatory review process.

Research Now and Survey Sampling are providers of digital data solutions and technology for consumer and business-to-business survey research.

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