LANDesk reacts to buyout news; First American, Intermedia free to trade following updates

By Sara Rosenberg

New York, Jan. 3 – LANDesk Software Group Inc.’s first-lien term loan headed lower in the secondary market on Tuesday and its second-lien term loan was bid higher after news surfaced that the company is being acquired by Clearlake Capital Group LP.

In more happenings, First American Payment Systems LP firmed the original issue discount on its first-lien term loan B at the tight end of revised guidance and then the tranche, as well as the company’s second-lien term loan, broke for trading.

Also, Intermedia.net Inc. increased spreads on its first-and second-lien term loans, widened the original issue discount and sweetened the call protection on its first-lien tranche, and then the debt made its way into the secondary market.

Also, Synchronoss Technologies Inc., TeamHealth Holdings Inc. and Hearthside Group Holdings LLC joined this week’s new issue calendar.

LANDesk moves around

LANDesk’s first- and second-lien term loans had opposite reactions in trading on Tuesday to the announcement that the company is being bought by Clearlake Capital from Thoma Bravo, according to a trader.

The first-lien term loan was quoted at par bid, par ¾ offered, down from 101 bid, 101½ offered, and the second-lien term loan was quoted at 102 bid, 102½ offered, up on the bid side from 101½ bid, 102½ offered, the trader said.

As part of the transaction, Clearlake will contribute its portfolio company HEAT Software to the new platform investment in LANDesk, and the combined company will operate under a new corporate name to be announced at a later date.

Closing on the transaction is expected this month.

LANDesk readies deal

To help fund the buyout, LANDesk will launch a $1.1 billion senior secured credit facility with a lenders’ presentation at 11 a.m. ET on Wednesday, a market source remarked.

The facility consists of a $75 million revolver, an $800 million first-lien term loan and a $225 million second-lien term loan, the source added.

Morgan Stanley Senior Funding Inc., Barclays, Jefferies Finance LLC, Golub Capital LLC, Macquarie Capital Inc. and Nomura Securities International are leading the deal.

LANDesk is a Salt Lake City-based user-centered IT management company. HEAT is a Milpitas, Calif.-based provider of Cloud Service Management and Unified Endpoint Management software solutions.

First American firms, trades

First American Payment Systems set the original issue discount on its $240 million seven-year first-lien term loan B (B1/B+) at 99, the tight end of revised talk of 98.5 to 99 and in line with initial talk of 99, a market source said.

The first-lien term loan is priced at Libor plus 575 basis points with a 1% Libor floor, and has 101 soft call protection for one year.

The company is also getting an $80 million 7.5-year second-lien term loan (Caa1/CCC+) priced at Libor plus 1,050 bps with a 1% Libor floor and an original issue discount of 97, and this tranche is non-callable for one year, then at 104 in year two and 102 in year three.

After terms finalized, the debt began trading, with the first-lien term loan quoted at 99½ bid, par ½ offered and the second-lien term loan quoted at 97½ bid, the source continued.

Closing is expected on Friday, the source added.

First American leads

Goldman Sachs Bank USA and SunTrust Robinson Humphrey Inc. are leading First American Payment’s term loans that will be used to refinance existing debt.

Earlier in syndication, the first-lien term loan was upsized from $230 million, pricing was increased from talk of Libor plus 500 bps to 525 bps and the call protection was extended from six months. The second-lien term loan was downsized from $100 million, pricing was lifted from talk of Libor plus 950 bps to 975 bps, the discount widened from 98, the call protection was changed from 102 in year one and 101 in year two, and the maturity was shortened from eight years.

Also, changes were made to the total net leverage covenant under the first-lien term loan B, a cap was placed on leverage ratio cash net, the 18-month MFN sunset was removed, the incremental allowance was revised, the excess cash flow sweep was increased, and there were changes to restricted payments, investments/junior payments, the investment/acquisition basket, the asset sale provision and the EBITDA definition.

Due to the recent changes to the term loan sizes, the company is getting $14 million in additional sponsor equity, compared to no additional equity initially.

First American Payment Systems is a Fort Worth, Texas-based payments platform serving small- and medium-sized businesses.

Intermedia reworked, breaks

Intermedia.net raised pricing on its $190 million seven-year first-lien term loan (B1/B+) to Libor plus 550 bps from revised talk of Libor plus 525 bps and initial talk of Libor plus 475 bps, changed the original issue discount to 98 from 99 and extended the 101 soft call protection to one year from six months, according to a market source. The tranche still has a 1% Libor floor.

In addition, pricing on the company’s $70 million eight-year second-lien term loan (Caa1/CCC+) was increased to Libor plus 950 bps from talk of Libor plus 925 bps, while the 1% Libor floor, discount of 98 and call protection of 102 in year one and 101 in year two were unchanged.

The company’s $285 million credit facility also includes a $25 million five-year revolver (B1/B+).

With final terms in place, the debt freed up for trading on Tuesday and the first-lien term loan was quoted at 99 bid, the source added.

SunTrust Robinson Humphrey Inc. and TD Securities (USA) LLC are leading the deal that is being used to help fund the buyout of the company by Madison Dearborn Partners from Oak Hill Capital Partners.

Intermedia.net is a Mountain View, Calif.-based provider of cloud business applications.

BWIC surfaces

In more secondary news, a $107 million Bid Wanted In Competition emerged. Market players were given till 11 a.m. ET on Wednesday to submit their bids, a trader said.

Some of the names in the portfolio are Amwins group LLC, Carestream Health, Community Health Systems Inc., First Data Corp., Sheridan Production Partners and Valeant Pharmaceuticals International Inc.

There are about 25 issuers in the BWIC, the trader added.

Synchronoss timing emerges

Back in the primary market, Synchronoss scheduled a bank meeting for 1 p.m. ET in New York on Thursday to launch its previously announced $1.15 billion senior secured credit facility, a market source remarked.

The facility consists of a $250 million five-year revolver and a $900 million first-lien term loan B.

According to the commitment letter, the revolver is expected at Libor plus 250 bps with leverage-based step-downs and a commitment fee of 37.5 bps with leverage-based step-downs, and the term loan is expected at Libor plus 325 bps with a step-down to Libor plus 300 bps at first-lien leverage 0.5 times inside closing date first-lien leverage, a 0.75% Libor floor and 101 soft call protection for six months.

Goldman Sachs Bank USA and Credit Suisse Securities (USA) LLC are leading the deal that will be used to help fund the acquisition of Intralinks Holdings Inc. for $13.00 per share or $821 million in equity value.

The transaction is also expected to be funded from cash on hand and from proceeds from the sale of a portion of Synchronoss’ activation business to Sequential Technology International LLC for $146 million.

Closing is expected this quarter, subject to customary conditions, including regulatory approval.

Synchronoss is a Bridgewater, N.J.-based provider of managed mobility solutions for Service Providers and Enterprise. Intralinks is a New York-based content collaboration company.

TeamHealth coming soon

TeamHealth will hold a bank meeting on Thursday to launch its $2.6 billion seven-year term loan B, according to a market source.

The company disclosed in filings with the Securities and Exchange Commission that it also plans to get a $400 million revolver.

J.P. Morgan Securities LLC is the left lead on the $3 billion senior secured credit facility, and provided the debt commitment with Barclays, Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc. and PSP Investments Credit USA LLC.

Proceeds will be used with $1,015,000,000 in bonds and $2.7 billion of equity to fund the buyout of the company by Blackstone for $43.50 per share in cash. The transaction is valued at about $6.1 billion.

Closing is expected this quarter, subject to stockholder approval, regulatory approvals and other customary conditions. The transaction is not subject to financing.

TeamHealth is a Knoxville, Tenn.-based physician services organization.

Hearthside on deck

Hearthside Group set a lender call for Wednesday to launch a fungible $50 million add-on term loan and a repricing of its $552.3 million term loan B due June 2, 2021, according to a market source.

Barclays and Goldman Sachs Bank USA are leading the deal.

The add-on term loan will be used to repay revolver borrowings and to pay related fees and expenses.

Hearthside is a Downers Grove, Ill.-based manufacturer of grain based food and snack products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.