Horizon lower with acquisition issues; Ascend falls; Wencor gains; Cvent accelerated

By Sara Rosenberg

New York, May 16 – In the secondary market on Tuesday, Horizon Therapeutics plc’s term loans softened with news that the Federal Trade Commission filed a lawsuit to block the acquisition of the company by Amgen Inc.

Also, Ascend Performance Materials’ term loan was lower in trading following the release of earnings to lenders, and Wencor Group’s term loan was better on the back of news that the company is being acquired by Heico Corp.

Meanwhile, in the primary market, Cvent Holding Corp. (Capstone Borrower Inc.) moved up the commitment deadline for its first-lien senior secured covenant-lite term loan B, and Solenis released price talk on its incremental term loan B in connection with its lender call.

Horizon dips

Horizon Therapeutics’ term loans were a bit weaker in trading on Tuesday as the Federal Trade Commission announced it filed a lawsuit in federal court to block the $27.8 billion purchase of the company by Amgen, according to a market source.

The company’s term loan B-1 was quoted at 99¼ bid, 99¾ offered, down from 99 7/8 bid, par 1/8 offered on Monday. The term loan B-2 was quoted at 99 1/8 bid, 99 5/8 offered in the morning, but then regained some ground as it moved to 99½ bid, 99 7/8 offered by late day; however, it was still down from Monday’s levels of 99 7/8 bid, par 1/16 offered, the source said.

The FTC said in a release that it is looking to block the merger because the “deal would allow Amgen to leverage its portfolio of blockbuster drugs to entrench the monopoly positions of Horizon medications used to treat two serious conditions, thyroid eye disease and chronic refractory gout.”

In response, Horizon put out a statement saying that the “FTC’s complaint impacts patients and is rooted in a theory about potential future “bundled” contracts with payors and not competitive overlap concerns. Horizon does not and has no plans to bundle any of its rare disease medicines. We firmly believe in the benefits of this acquisition and intend to work with the court on a schedule that would allow the transaction to close by mid-December.”

Dublin-based Horizon and Thousand Oaks, Calif.-based Amgen are biotechnology companies.

Ascend Performance slides

Ascend Performance Materials’ term loan dropped to 96¼ bid, 97¼ offered on Tuesday from 98 bid, 98½ offered on Monday, a trader said.

The term loan weakened after the company released earnings results to lenders, the trader added.

Ascend Performance Materials is a Houston-based provider of chemicals, fibers and plastics.

Wencor gains

Wencor Group’s first-lien term loan rose to 99¼ bid, par ¼ offered from 97½ bid, 98½ offered in reaction to Monday’s announcement that the company is being bought by Heico, according to a market source.

The company is being purchased from Warburg Pincus LLC and management for $1.9 billion in cash and $150 million in Heico class A common stock, or $2.05 billion in the aggregate.

Truist Securities has provided Heico with committed financing for the transaction.

Closing is expected by the end of this year, subject to customary conditions including antitrust clearance.

Wencor is a Peachtree City, Ga.-based commercial and military aircraft aftermarket company. Heico is a Hollywood, Fla.-based producer and distributor of products and services to certain niche segments of the aviation, defense, space, medical, telecommunications and electronics industries.

Cvent tweaks timing

Moving to the primary market, Cvent accelerated the commitment deadline for its $400 million seven-year first-lien senior secured covenant-lite term loan B to 5 p.m. ET on Wednesday from noon ET on Thursday, a market source remarked.

Talk on the term loan is SOFR plus 400 bps with a 25 bps step-down at 3.75x first-lien leverage, a 25 bps step-down at 3.25x first-lien leverage and a 25 bps step-down following an initial public offering, a 0% floor, an original issue discount of 98 to 98.5 and 101 soft call protection for six months.

The company’s $515 million of credit facilities (B2/B-/BB) also include a $115 million revolver.

Morgan Stanley Senior Funding Inc., UBS Securities LLC, Citizens Bank and Fifth Third are leading the deal.

Cvent being acquired

Proceeds from Cvent’s term loan will be used with $500 million of senior secured notes and about $2.5 billion of equity to fund its buyout by Blackstone for $8.50 per share in cash, or about $4.6 billion, to refinance existing credit facilities, and to pay fees and expenses related to the transaction.

A wholly owned subsidiary of the Abu Dhabi Investment Authority will be a significant minority investor alongside Blackstone as part of the buyout. Also, Vista Equity Partners, a majority stockholder of Cvent, has agreed to invest a portion of its proceeds as non-convertible preferred stock in financing for the transaction.

Closing is expected mid-year, subject to stockholder and regulatory approvals.

Cvent is a Tysons, Va.-based provider of meetings, events and hospitality technology.

Solenis guidance

Solenis held its lender call on Tuesday morning and announced talk on its non-fungible $750 million incremental term loan B (B3/B-) due Nov. 9, 2028 at SOFR plus 475 basis points with a 0.5% floor, an original issue discount of 97 to 97.5 and 101 soft call protection for six months, according to a market source.

Commitments are due at 10 a.m. ET on May 23, the source added.

Goldman Sachs Bank USA, BofA Securities Inc., BMO Capital Markets, HSBC Securities (USA) Inc., Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Macquarie Capital (USA) Inc. and Nomura are leading the deal.

The loan will be used to help fund the acquisition of Diversey Holdings Ltd. in a transaction with an enterprise value of about $4.6 billion, to repay existing Diversey net debt, and to pay related fees and expenses.

Solenis plans notes

Along with the term loan, Solenis expects to use $1.625 billion of senior secured notes, $500 million equivalent of euro senior secured notes and about $2 billion of contributed equity for the acquisition.

The purchase agreement calls for Diversey shareholders, other than shareholders affiliated with Bain Capital Private Equity, to receive $8.40 per share in cash. Bain Capital will receive $7.84 per share in cash and will roll over a portion of its shares of Diversey into an affiliate of Solenis in exchange for common and preferred units of such affiliate.

Closing is expected in the second half of this year, subject to customary conditions, including approval by Diversey shareholders and receipt of regulatory approvals.

Solenis, a Platinum Equity portfolio company, is a Wilmington, Del.-based manufacturer of specialty chemicals used in water-intensive industries. Diversey is a Fort Mill, S.C.-based provider of hygiene, infection prevention and cleaning solutions.

Loan indices rise

In other news, IHS Markit’s iBoxx loan indices were higher on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.03% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.04%.

Month to date, the MiLLi is down 0.13% and year to date it is up 3.92%, and the LLLi is down 0.39% month to date and up 4.05% year to date.

Average secondary market bids in the U.S. on Monday were 91.12, unchanged from the previous day and down 0.83% year to date.

According to the IHS Markit data, some of the top advancers on Monday were Envision Healthcare/Amsurg’s July 2022 first out covenant-lite term loan at 81, up from 77.17, Quorum’s July 2020 PIK term loan at 61.5, up from 58.67, and Genesis Care’s March 2020 U.S. covenant-lite term loan B at 29, up from 28.15.

Some top decliners on Monday were At Home Group’s July 2021 covenant-lite term loan B at 65.75, down from 72.25, U.S. Renal Care’s June 2019 term loan B at 55.17, down from 60.57, and CBS Radio/Entercom Media’s December 2019 covenant-lite term loan at 44.25, down from 48.

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