Wolverine firms pricing on $350 million term B at Libor plus 375 bps

By Sara Rosenberg

New York, June 22 - Wolverine Worldwide Inc. finalized pricing on its $350 million seven-year term loan B at Libor plus 375 basis points, the tight end of the revised Libor plus 375 bps to 400 bps talk and in line with initial talk, according to a market source.

Also, a step-down was added to Libor plus 350 bps at less than 3.25 times total net leverage, the source said.

Pricing will be locked at the initial rate until the delivery of June 30, 2013 financials.

The 1% Libor floor, original issue discount of 99 and 101 soft call protection for one year were left unchanged.

The B loan includes a ticking fee of 50% of the drawn spread starting on July 16, stepping up to 100% of the drawn spread plus the Libor floor on Oct. 16.

The company's $1.1 billion senior secured credit facility (Ba2/BB) also provides for a $200 million five-year revolver and a $550 million five-year term loan A, both priced at Libor plus 225 bps.

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 company's $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, Wolverine Worldwide, Blum Capital Partners and Golden Gate Capital are acquiring Collective Brands for $21.75 per share in cash, or roughly $2 billion including the assumption of debt.

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

Blum Capital and Golden Gate will obtain 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 will continue to be based 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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