World Kitchen launches $275 million term loan B at Libor plus 500 bps

By Sara Rosenberg

New York, June 6 – World Kitchen, LLC (WKI Holding Co. Inc.) launched on Monday a $275 million seven-year senior secured term loan B (B2/B) with price talk of Libor plus 500 basis points with a 1% Libor floor and an original issue discount of 99, according to a market source.

The loan has 101 soft call protection for six months and amortization of 1% per annum, the source said.

Included in the loan is a maximum total net leverage covenant of 5.25 times, stepping down to 5 times in the fourth quarter of 2017, 4.75 times in the fourth quarter of 2018 and 4.50 times in the fourth quarter of 2020. There is a $25 million cap on cash for netting purposes.

Mandatory prepayments are from 50% of excess cash flow, stepping down to 25% and 0% at first-lien net leverage ratios of 2.75 times and 2.25 times, respectively, 100% of asset sale proceeds subject to reinvestment rights, and 100% of debt issuance proceeds other than permitted debt.

Incremental allowance is $70 million plus an unlimited amount subject to pro forma compliance with first-lien net leverage of 3.5 times and 50 bps MFN for 12 months, the source continued.

Citigroup Global Markets Inc. and BMO Capital Markets Corp. are the joint lead arrangers on the deal.

Commitments are due at noon ET on June 17, the source added.

Proceeds will be used to help fund the acquisition of the company by GP Investments.

The anticipated initial enterprise value of World Kitchen is about $566 million at $10 per share, implying a multiple of 7.2 times projected calendar year 2016 adjusted EBITDA of $78 million, and post-closing equity value of $330 million.

Closing is expected in late July.

World Kitchen is a Rosemont, Ill.-based manufacturer and marketer of bakeware, dinnerware, kitchen and household tools, cookware, storage and cutlery products.

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