Wolverine Worldwide talks $500 million term B at Libor plus 375 bps

By Sara Rosenberg

New York, June 6 - Wolverine Worldwide Inc. launched its $500 million seven-year term loan B on Wednesday afternoon with price talk of Libor plus 375 basis points with a 1% Libor floor and an original issue discount of 99, according to a market source.

The loan includes 101 soft call protection for one year, the source said.

The company's $1.1 billion senior secured credit facility (Ba2/BB) also provides for a $200 million five-year revolver and a $400 million five-year term loan A.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the lead banks on the deal.

Proceeds from the credit facility will be used to fund the $1.23 billion acquisition of Collective Brands Inc.'s Performance + Lifestyle Group.

Other funds for the transaction are expected to come from $375 million of senior unsecured notes that are backed by a commitment for a $375 million senior unsecured bridge loan.

Under the agreement, Collective Brands is being acquired for $21.75 per share in cash, or roughly $2 billion including the assumption of debt, by Wolverine Worldwide, Blum Capital Partners and Golden Gate Capital.

At close, Wolverine Worldwide will get Collective Brands' Performance + Lifestyle Group, which includes the wholesale and retail operations of the Sperry Top-Sider, Saucony, Stride Rite and Keds brands, and will continue to operate from Lexington, Mass.

Blum Capital and Golden Gate will get the operations of Payless ShoeSource and Collective Licensing International, which together will operate as a stand-alone entity. Payless will continue to have headquarters in Topeka, Kan., and Collective Licensing in Englewood, Colo.

Blum Capital and Golden Gate Capital have received a commitment for a $250 million senior secured asset-based revolving credit facility from Wells Fargo Capital Finance for the buyout.

Closing is expected late in the third quarter or early in the fourth quarter, subject to customary conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and Collective Brands' shareholder approval.

Wolverine Worldwide is a Rockford, Mich.-based marketer of branded casual, active lifestyle, work, outdoor sport and uniform footwear and apparel. Collective Brands is a Topeka, Kan.-based footwear and related accessories company.

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