Answers, Pike, Capstone Logistics break; AVG Technologies modifies deal; Graton withdrawn

By Sara Rosenberg

New York, Oct. 2 – Answers Corp.’s credit facility hit the secondary market on Friday with both the first- and second-lien term loans bid in line with their original issue discounts, and Pike Corp. and Capstone Logistics LLC began trading as well.

Over in the primary, AVG Technologies NV downsized its term loan, widened the spread and original issue discount talk and extended the call protection, and Graton Resort & Casino removed its credit facility from market.

Also, Sutherland Global Services Inc. disclosed price talk on its term loan B with launch and Kellermeyer Bergensons Services LLC emerged with new deal plans.

Answers starts trading

Answers’ credit facility freed up on Friday with the $320 million seven-year first-lien covenant-light term loan (B1/B) quoted at 96½ bid, 97½ offered and the $175 million eight-year second-lien covenant-light term loan (Caa2/CCC+) quoted at 95½ bid, 96½ offered, according to a market source.

Pricing on the first-lien term loan is Libor plus 525 basis points with a 1% Libor floor and it was sold at an original issue discount of 96½. There is 101 soft call protection for one year.

The second-lien term loan is priced at Libor plus 900 bps with a 1% Libor floor and it was issued at 95½. This debt has call protection of 103 in year one, 102 in year two and 101 in year three.

During syndication, pricing on the first-lien term loan was increased from talk of Libor plus 475 bps to 500 bps, the discount was revised from 99 and the call protection was extended from six months, and pricing on the second-lien loan was lifted from talk of Libor plus 825 bps to 850 bps, the discount widened from 99 and the call protection was sweetened from 102 in year one and 101 in year two.

The company’s $535 million credit facility includes a $40 million five-year revolver (B1/B) too.

Answers being acquired

Proceeds from Answer’s credit facility will be used to help fund its buyout by Apax Partners from Summit Partners, TA Associates and founder shareholders, and members of the company’s senior management will invest alongside Apax Funds to maintain a significant equity interest.

Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc., Jefferies Finance LLC and Bank of America Merrill Lynch are leading the loan financing.

Closing on the buyout is expected in the fourth quarter.

Answers is a St. Louis-based provider of cloud-based services that enhance customer acquisition and brand engagement.

Pike frees up

Another deal to emerge in the secondary was Pike with its $310 million seven-year first-lien covenant-light term loan seen at 99½ bid and its $130 million 7½-year second-lien covenant-light term loan seen at 98 bid, 99 offered, a source remarked.

The first-lien term loan is priced at Libor plus 450 bps with a 1% Libor floor and was sold at an original issue discount of 99. There is 101 soft call protection for one year.

Pricing on the second-lien term loan is Libor plus 850 bps with a 1% Libor floor and is was sold at a discount of 97½. This tranche has call protection of 103 in year one, 102 in year two and 101 in year three.

Recently, the first-lien term loan was upsized from $290 million and pricing firmed at the high end of the Libor plus 425 bps to 450 bps talk, and the second-lien loan was downsized from $150 million, pricing was raised from talk of Libor plus 725 bps to 750 bps, the discount widened from 99 and the call protection was changed from 102 in year one and 101 year two.

ther changes included a reduction in the incremental allowance to $50 million from $85 million with 0 bps MFN for life instead of 50 bps MFN for life, and an increase in the ticking fee to the full spread plus floor after 30 days from half the spread from days 31 to 60 and the full spread thereafter.

Pike getting revolver

In addition to the first- and second-lien term loans, Pike’s $540 million senior secured credit facility provides for a $100 million five-year revolver (B2/B+).

J.P. Morgan Securities LLC, Keybanc Capital Markets and SunTrust Robinson Humphrey Inc. are leading the deal that will be used with up to $190 million in equity and cash on hand to fund the buyout of the company led by Court Square Capital Partners and including chairman and chief executive officer J. Eric Pike for $12.00 in cash per share.

Closing is expected in the fourth quarter, subject to shareholder and regulatory approvals and other customary conditions.

Pike is a Mount Airy, N.C.-based specialty construction and engineering firm.

Capstone tops OID

Capstone Logistics’ credit facility broke as well, with the $182.5 million seven-year first-lien term loan (B2/B) quoted at 99¾ bid, par ¾ offered, according to a trader.

Pricing on the first-lien term loan is Libor plus 450 bps, after firming during syndication at the tight end of the Libor plus 450 bps to 475 bps talk, a source said. The loan has a 1% Libor floor and 101 soft call protection for six months, and was sold at an original issue discount of 99.

The company’s $277.5 million senior secured credit facility also includes a $30 million five-year revolver (B2/B), and a $65 million eight-year second-lien term loan (Caa2/CCC+) that was privately placed.

Goldman Sachs Bank USA, BNP Paribas Securities Corp. and Fifth Third Securities Inc. are leading the deal that will be used to help fund the buyout of the company by Jordan Co.

Capstone is a Peachtree Corners, Ga.-based performance workgroup partner.

AVG reworks deal

Switching to the primary market, AVG Technologies trimmed its six-year term loan B to $200 million from $250 million, raised price talk to Libor plus 450 bps to 475 bps from Libor plus 375 bps, moved original issue discount talk to 98 to 98½ from 99 and pushed out the 101 soft call protection to one year from six months, according to a market source, who added that the 1% Libor floor was unchanged.

Also, the source said that the term loan has a 50% excess cash flow sweep at all times.

The company’s now $250 million senior secured credit facility includes a $50 million five-year revolver as well.

Recommitments are due at 5 p.m. ET on Monday, the source continued.

Morgan Stanley Senior Funding Inc. and HSBC Securities USA Inc. are leading the deal.

AVG buying Location

Proceeds from AVG’s credit facility will be used to help fund the acquisition of Location Labs, an Emeryville, Calif.-based mobile security company, for $140 million initially, plus up to roughly $80 million in cash consideration over the next two years, and for general corporate purposes, including future potential acquisitions.

The term loan B downsizing is resulting in less cash being put on the balance sheet, the source added.

Closing is expected in the fourth quarter.

AVG is an online security company with headquarters in Amsterdam and San Francisco.

Graton Resort shelved

Graton Resort & Casino pulled its $950 million credit facility (B2) from the primary due to poor market conditions, according to a market source.

The facility consisted of a $100 million five-year revolver, a $350 million five-year term loan A, and a $500 million six-year term loan B talked at Libor plus 425 bps to 450 bps with a 1% Libor floor, an original issue discount of 99 and call protection of 102 in year one and 101 in year two.

Bank of America Merrill Lynch, Wells Fargo Securities LLC and U.S. Bank were leading the deal that was going to be used to refinance existing debt.

Graton Resort is a full-amenity gaming resort in Sonoma County, Calif.

Sutherland sets talk

Also in the primary, Sutherland Global Services held its bank meeting on Friday, launching its $340 million 6½-year term loan B with talk in the Libor plus 475 bps area with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source remarked.

Commitments are due on Oct. 16, the source added.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. are leading the deal that will be used to refinance existing debt and repurchase equity.

Sutherland is a Rochester, N.Y.-based provider of business process and technology management services.

Kellermeyer on deck

Kellermeyer Bergensons Services set a bank meeting for Wednesday to launch a $243 million credit facility, a market source said.

The facility consists of a $30 million revolver, a $148 million first-lien term loan and a $65 million second-lien term loan, the source continued.

BNP Paribas Securities Corp. and CIT are leading the deal that will be used to help fund the buyout of the company by GI Partners from Kohlberg & Co. LLC.

Closing is expected in the fourth quarter, subject to regulatory approvals and customary conditions.

Kellermeyer is a provider of integrated facilities management services to retail and grocery chains with headquarters in Oceanside, Calif., and Maumee, Ohio.

Flavors closes acquisition

In other news, Flavors Holdings Inc., the parent of Mafco Worldwide Corp., a Camden, N.J.-based manufacturer of licorice extract and related derivatives, completed its purchase of Merisant Co., a producer of low-calorie tabletop sweeteners, a news release said.

To help fund the transaction, Flavors is getting a $450 million credit facility consisting of a $50 million revolver (B+), a $350 million six-year first-lien term loan (B+) and a $50 million seven-year second-lien term loan (B).

Pricing on the first-lien term loan is Libor plus 575 bps with a 1% Libor floor and an original issue discount of 96, and pricing on the second-lien term loan is Libor plus 1,000 bps with a 1% Libor floor and a discount of 96.

Included in the first-lien term loan is 101 soft call protection for one year, and the second-lien loan is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

Flavors lead banks

Credit Suisse Securities (USA) LLC, Jefferies Finance LLC, Deutsche Bank Securities Inc. and PNC Capital Markets are leading Flavors Holdings’ credit facility, which is expected to allocate in the week of Oct. 6.

Recently, the first-lien term loan was downsized from $365 million, pricing was raised from Libor plus 550 bps and the discount widened from 99 and amortization was increased to 5% from 1%. In addition, the second-lien term loan was downsized from $75 million, pricing was increased from Libor plus 950 bps, the discount was changed from 98½, and call protection was modified from 103 in year one, 102 in year two and 101 in year three.

Also, the excess cash flow sweep was revised to 75% with step-downs from 50% with step-downs.

To compensate for the reduction in term loan debt, the cash equity for the transaction was raised to $60 million from $35 million and the drawn revolver amount was lifted to $21 million from $15million.

First-lien net leverage is 3.8 times and total net leverage is 4.3 times.

Flavors is a provider of flavoring and sweetening products and services.

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