Waterjet upsizes to $225 million, talks secured notes in 7¾% area

By Paul A. Harris

Portland, Ore., Jan. 23 - Waterjet Holdings Inc. upsized its offering of six-year senior secured notes (B2/B) to $225 million from $200 million, a market source said on Thursday.

The notes were also talked to price with a yield in the 7¾% area.

The Rule 144A and Regulation S for life offering is expected to price Friday morning.

Goldman Sachs & Co. and Morgan Stanley & Co. LLC are the joint bookrunners.

The notes come with three years of call protection.

Proceeds, together with equity from sponsor American Industrial Partners and funds from the Advanced Systems transaction, will be used to finance a merger with Flow International Corp., to pay off Flow's revolver and to repay other debt.

With the upsizing of the bonds, the equity contribution for the merger will be reduced.

Waterjet, a waterjet cutting technology company, is being formed by the combination of Kent, Wash.-based Flow International Corp. and Baxter Springs, Kan.-based KMT Group AB.

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