Jostens buys $182.9 million 12¾% notes in tender

New York, Oct. 4 - Jostens, Inc. said it bought $182.9 million or 89.7% of its 12¾% senior subordinated notes due 2010 in its tender offer for the securities.

At the previous announcement on Sept. 20, Jostens fixed pricing in its tender offer at $1,119.29 per $1,000 principal amount.

All holders who tender before the expiration date will receive the payment plus accrued interest.

At the last announcement on Sept. 10, Jostens Inc. extended its tender offer and consent solicitation to 5 p.m. ET on Oct. 4, subject to possible further extension, from the previous deadline of 5 p.m. ET on Sept. 24. Accordingly, the pricing for the notes was also extended, to 10 a.m. ET on Sept. 20, subject to possible further extension, from the previously announced 10 a.m. ET on Sept. 10.

The company said that as of 5 p.m. ET on Sept. 9 it had received tenders and consents for 89.7% of the principal amount outstanding of the notes - down slightly from the 90% participation announced on Sept. 2, when the offer was last previously extended.

As previously announced, Jostens, a Minneapolis-based provider of school-related affinity products such as yearbooks, class rings, diplomas and graduation caps and gowns, as well as school photography products and services in Canada, said on Aug. 19 that it had begun a cash tender offer for any and all of the $203.985 million outstanding principal amount of its 12¾% notes and was also soliciting noteholder consents to eliminate substantially all of the restrictive and reporting covenants, certain events of default and certain other provisions.

It set a consent deadline of 5 p.m. ET on Sept. 1 and initially said the tender offer would expire at 5 p.m. ET on Sept. 17, which was subsequently extended.

Jostens said it was undertaking the tender offer and consent solicitation in connection with the previously announced transactions with affiliates of Kohlberg Kravis Roberts & Co. and DLJ Merchant Banking Partners, including the recapitalization of Jostens Holding Corp., the parent of Jostens Inc.

The company said noteholders tendering their notes by the consent deadline would receive a consent payment of $20 per $1,000 principal amount of notes as part of the total consideration, which was originally to have been determined at 10 a.m. ET on Sept. 2 (this was subsequently extended). The total consideration will be based on the present value of the notes as of the payment date, assuming each $1,000 principal amount of the notes would be paid at a price of $1,063.75 on May 1, 2005, discounted at a rate of 75 basis points over the yield on the 6½% U.S. Treasury note due May 15, 2005.

All tendering holders will also be paid accrued interest up to but not including the payment date. The company originally said holders tendering their notes after the consent deadline would not receive the consent payment as part of their consideration but announced on Sept. 2 that instead all holders tendering by the expiration date would receive the consent payment.

The company also said at that time that it had received the required consents to the proposed indenture changes, with more than 90% of the notes having been tendered with related consents by the Sept. 1 consent deadline.

Jostens intends to fund the tender offer and consent payments with a portion of the proceeds from senior secured term loan and revolving credit facilities totaling up to $1.3 billion principal amount and a $500 million increasing-rate bridge loan to be secured by Jostens IH Corp., a wholly owned subsidiary of Jostens Holding Corp. (or, in lieu of the bridge loan, the incurrence of other debt by Jostens IH Corp.) in connection with the Kohlberg Kravis/DLJ Transactions.

Completion of the tender offer will be subject to certain conditions, including satisfaction or waiver of the conditions to the closing of the transactions, and the company's receipt of consents from the holders of at least a majority of the outstanding notes, and the execution of a supplemental indenture to the indenture governing the notes.

Credit Suisse First Boston LLC (call 212 538-0652 or 800 820-1653) is the dealer manager and solicitation agent. MacKenzie Partners Inc. is the information agent (800 322-2885).

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