INC Research, American Addiction, Clean Harbors break; multiple deal changes surface

By Sara Rosenberg

New York, June 28 – Deals from INC Research Holdings Inc. and American Addiction Centers (AAC Holdings Inc.) freed up for trading on Wednesday and Clean Harbors Inc. broke after the issuer tightened the spread and issue price on its term loan B.

In other news, PDC Brands (Parfums Holding Co. Inc.) upsized its first-lien term loan and updated spreads, original issue discounts and call premiums on the first-lien loan as well as on its second-lien term loan and Ascend Learning LLC finalized pricing on its term loan at the low end of guidance and added a leverage-based step-down.

Also, Canam Steel Corp. (Canaveral Holdings B Inc.) increased the size of its term loan, lifted the spread, modified the issue price and sweetened the call protection, and Constellis Holdings LLC modified the original issue discount on its incremental first-lien term loan.

Furthermore, NFP Corp. revised the issue price on its add-on term loan B, Central Security Group Inc. set the original issue discount on its incremental first-lien term loan at the wide side of talk and Exela Technologies pushed out the commitment deadline on its term loan B by a few hours.

INC Research frees up

INC Research’s credit facilities made their way into the secondary market on Wednesday, with the $1.6 billion seven-year covenant-light term loan B quoted at par 1/8 bid, par ½ offered, according to a trader.

Pricing on the term loan B is Libor plus 225 basis points with a 25 bps step-down at 3 times secured leverage and a 0% Libor floor. The debt was sold at an original issue discount of 99.875 and has 101 soft call protection for six months and a ticking fee of half the spread from days 31 to 90 and the full spread thereafter.

During syndication, the term loan B was downsized from $1.85 billion as the company’s five-year term loan A was upsized to $1 billion from $750 million and the discount was tightened from 99.75.

The company’s $3.1 billion of credit facilities (Ba2/BB+) also include a $500 million five-year revolver.

Credit Suisse Securities (USA) LLC, ING, Bank of America Merrill Lynch, Barclays, Citigroup Global Markets Inc., Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc., PNC and Wells Fargo Securities LLC are leading the deal, with Credit Suisse the left lead on the term loan B and ING the left lead on the revolver and term loan A.

INC Research refinancing

Proceeds from INC Research’s credit facilities will be used to refinance existing debt in connection with its all-stock merger with inVentiv Health Inc. The transaction values inVentiv at an enterprise value of around $4.6 billion, and the combined company at an enterprise value of about $7.4 billion.

At closing, INC Research shareholders are expected to own about 53% and inVentiv shareholders are expected to own about 47% of the combined company on a fully diluted basis. Advent International and Thomas H. Lee Partners, the current equal equity owners of inVentiv, will remain investors in the combined company.

Closing is expected in the second half of this year, subject to approval by INC Research shareholders, the satisfaction of regulatory requirements and other customary conditions.

INC Research is a Raleigh, N.C.-based contract research organization providing the full range of Phase I to Phase IV clinical development services for the biopharmaceutical and medical device industries. inVentiv is a Burlington, Mass.-based contract research organization and contract commercial organization.

American Addiction tops OID

American Addiction Centers’ credit facilities began trading too, with the $210 million six-year first-lien term loan seen at 98¼ bid, 99¼ offered, a trader said.

The term loan is priced at Libor plus 675 bps with a 1% Libor floor and it was sold at an original issue discount of 97.5. The debt is non-callable for one year, then at 102 in year two and 101 in year three.

The company’s $250 million of senior secured credit facilities (B3/B-) also include a $40 million revolver.

During syndication, pricing on the term loan was increased from Libor plus 550 bps, the discount widened from 99 and the call protection was changed from a 101 soft call for six months. Also, the revolver was downsized from $55 million.

Credit Suisse Securities (USA) LLC and Hancock Whitney Bank are leading the deal that will be used to refinance existing debt.

American Addiction Centers is a Brentwood, Tenn.-based provider of inpatient and outpatient substance abuse treatment services.

Clean Harbors revised, trades

Clean Harbors cut pricing on its $400 million seven-year senior secured term loan B (Baa3/BBB-) to Libor plus 200 bps from talk of Libor plus 225 bps to 250 bps and moved the original issue discount to 99.75 from 99.5, according to a market source.

The term loan still has a 0% Libor floor and 101 soft call protection for six months.

Recommitments were due at noon ET on Wednesday. By late day the loan freed to trade at 99 7/8 bid, par 3/8 offered and then moved up to par 1/8 bid, par 5/8 offered, the source said.

Goldman Sachs Bank USA, Bank of America Merrill Lynch and J.P. Morgan Securities LLC are leading the deal that will be used to help redeem up to $400 million of the company’s outstanding 5¼% senior notes due 2020.

The tender offer for the notes will expire at 11:59 p.m. ET on July 12.

Clean Harbors is a Norwell, Mass.-based provider of environmental, energy and industrial services.

Vivid bid up

Also in trading, Vivid Seats LLC’s $525 million seven-year senior secured covenant-light term loan B was quoted at par bid, par ¾ offered, up on the bid side from the 99¾ bid, par ¾ offered levels seen upon break late in the previous session, a trader remarked.

Pricing on the term loan is Libor plus 400 bps with a 1% Libor floor and it was sold at an original issue discount of 99.25. The debt has 101 soft call protection for six months.

During syndication, pricing on the term loan was reduced from talk of Libor plus 425 bps to 450 bps, the discount was changed from 99 and the MFN sunset was removed.

The company’s $575 million of credit facilities (B2/B) also include a $50 million five-year revolver.

Barclays, Jefferies LLC, SunTrust Robinson Humphrey Inc. and RBC Capital Markets are leading the deal that will be used to help fund the buyout of the company by GTCR, which is expected to close this quarter. Upon closing, Vista Equity Partners will maintain an ownership stake in the company.

Pro forma first-lien leverage is 5 times and total net leverage is 6.6 times.

Vivid is a Chicago-based secondary ticket marketplace for live sports, concerts and theater events.

PDC modifies deal

Back in the primary market, PDC Brands raised its seven-year first-lien term loan B to $540 million from $530 million, lifted pricing to Libor plus 475 bps from talk of Libor plus 425 bps to 450 bps, set the original issue discount at 99, the wide end of the 99 to 99.5 talk, and extended the 101 soft call protection to one year from six months, a market source remarked. The 1% Libor floor was unchanged.

In addition, the company increased pricing on its $220 million eight-year second-lien term loan to Libor plus 875 bps from talk of Libor plus 800 bps to 825 bps, widened the discount to 97 from 98.5, and modified the hard call protection to 103 in year one, 102 in year two and 101 in year three from 102 in year one and 101 in year two, the source continued. This tranche still has a 1% Libor floor.

Also, the MFN was changed to 50 bps for life with no carve-outs from 75 bps for 12 months with certain carve-outs, the accordion was revised to the greater of $75 million and 75% of EBITDA plus additional amounts up to 4.75 times net first-lien leverage and 6.75 times total net leverage, from the greater of $110 million and 100% of EBITDA plus additional amounts up to 5 times net first-lien leverage and 7 times total net leverage, and the excess cash flow sweep was adjusted to 75% above 4.5 times net first-lien leverage, 50% above 4 times net first-lien leverage, 25% above 3.5 times net first-lien leverage and 0% below 3.5 times net first-lien leverage. Previously it was 50% above 4.5 times net first-lien leverage, 25% above 4 times net first-lien leverage and 0% below 4 times net first-lien leverage.

PDC lead banks

Nomura, Jefferies LLC and Macquarie Capital (USA) Inc. are leading PDC’s $825 million of credit facilities, which also include a $65 million five-year revolver. Nomura is left lead on the revolver and term loan B while Jefferies is left lead on the second-lien loan.

Recommitments are due at noon ET on Thursday and allocations are expected later that day, the source added.

Proceeds will be used to help fund the buyout of the company by CVC Capital Partners from Yellow Wood Partners and to refinance existing debt. Funds from the first-lien term loan upsizing will cover the wider original issue discount.

Closing is expected this month, subject to approval by the relevant competition authorities.

PDC is a Stamford, Conn.-based beauty and personal care products company.

Ascend updates emerge

Ascend Learning set the spread on its $700 million seven-year covenant-light term loan at Libor plus 325 bps, the low end of the Libor plus 325 bps to 350 bps talk, and added a step-down to Libor plus 300 bps when consolidated first-lien net leverage is 3.6 times, a market source said.

As before, the term loan has a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

The company’s $825 million of credit facilities (B2/B+) also include a $125 million five-year revolver.

Commitments were due at 5 p.m. ET on Wednesday, the source added.

Barclays, Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc. and RBC Capital Markets are leading the deal that will be used to help fund the buyout of the company by Blackstone and Canada Pension Plan Investment Board from Providence Equity Partners and Ontario Teachers’ Pension Plan.

Closing is subject to customary conditions and regulatory approvals.

Ascend Learning is a provider of educational content, software and analytics solutions.

Canam Steel reworked

Canam Steel upsized its seven-year covenant-light first-lien term loan B (B3/B) to $320 million from $310 million, lifted pricing to Libor plus 550 bps from Libor plus 525 bps, widened the original issue discount to 97 from 98.5 and modified the call protection to a hard call of 102 in year one and 101 in year two from a 101 soft call for six months, according to a market source.

In addition, the excess cash flow sweep was changed to 75% with step-downs from 50%, the incremental basket was reduced to $65 million and the grower was removed, and under EBITDA add backs the run-rate cost savings were capped at 20% of consolidated EBITDA from uncapped previously.

The term loan still has a 1% Libor floor.

Recommitments were due at 5 p.m. ET on Wednesday and allocations are expected on Thursday.

Morgan Stanley Senior Funding Inc. and BMO Capital Markets Corp. are leading the deal that will fund the acquisition of Canam by American Industrial Partners, members of the Dutil family, Caisse de depot et placement du Quebec and Fonds de solidarite FTQ for a cash consideration of $12.30 per share. The additional amount raised through the loan upsizing will fund the wider discount, the source added.

Closing is expected near the end of this month.

Canam is a Quebec-based fabricator of steel components.

Constellis adjusts OID

Constellis tightened the original issue discount on its $27.5 million incremental first-lien term loan (B2/B+) due April 2024 to 99 from talk in the range of 98 to 98.5, according to a market source.

As before, pricing on the incremental term loan is Libor plus 500 bps with a 1% Libor floor, and the debt has 101 soft call protection through April 2018, all of which matches the existing term loan.

Commitments were due at 5 p.m. ET on Wednesday, moved up from Thursday, the source said.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to fund a tuck-in acquisition.

Constellis is a Reston, Va.-based provider of operational support and risk management services to government and commercial clients.

NFP tweaks discount

NFP narrowed the original issue discount on its fungible $240 million add-on covenant-light term loan B (B2/B) due January 2024 to 99.5 from 99.25, a market source said.

Pricing on the add-on loan is Libor plus 350 bps with a 1% Libor floor.

Recommitments were due at 4 p.m. ET on Wednesday, the source added.

Bank of America Merrill Lynch, Barclays, J.P. Morgan Securities LLC, Jefferies LLC and KKR Capital Markets are leading the deal that will be used to redeem some notes and to fund acquisitions.

NFP is an insurance broker and consultant.

Central Security firms price

Central Security Group set the original issue discount on its $40 million incremental first-lien term loan due Oct. 6, 2021 at 99.5, the wide end of the 99.5 to 99.75 talk, according to a market source.

The loan is priced at Libor plus 562.5 bps with a 1% Libor floor, and has 101 soft call protection for six months.

Allocations went out on Wednesday, the source added.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to pay down revolver borrowings.

With this transaction, the company sought to extend the maturity of its existing term loan to Oct. 6, 2021 from Oct. 6, 2020 and consenting lenders were offered a 12.5 amendment fee.

Central Security is a Tulsa, Okla.-based provider of alarm monitoring services.

Exela moves deadline

Exela Technologies extended the commitment deadline on its $350 million six-year term loan B to 5 p.m. ET on Wednesday from noon ET on Wednesday, a market source remarked.

Pricing on the loan is Libor plus 700 bps with a 1% Libor floor and an original issue discount of 98, and the debt has 101 soft call protection for one year.

On Tuesday, the term loan B was downsized from $525 million, pricing was lifted from Libor plus 550 bps, the discount widened from 99 and the call protection was extended from six months.

With the term loan B downsizing, the company upsized its secured notes offering to $1 billion from $525 million and eliminated plans to issue $300 million in unsecured notes.

RBC Capital Markets LLC, Credit Suisse Securities (USA) LLC, Natixis Securities Americas LLC and KKR Capital Markets LLC are leading the deal.

Exela getting revolver

Along with the term loan B, Exela’s $450 million of senior secured credit facilities (B3/B) include a $100 million revolver.

Proceeds from the new debt will be used to help fund Exela’s creation through the merger of Quinpario Acquisition Corp. 2, SourceHOV LLC and Novitex Holdings Inc. Shareholders of SourceHOV and Novitex are rolling 100% of the current equity, and will be the majority shareholders of the combined company.

Other funds for the roughly $2.8 billion transaction will come from cash from Quinpario, rollover equity and cash on hand at closing.

Closing is expected this quarter, subject to customary conditions, regulatory approvals, receipt of approvals from Quinpario stockholders and receipt of proceeds from debt and equity financing.

Quinpario is a St. Louis-based special purpose acquisition company. SourceHOV, majority owned by HandsOn Global Management LLC, is an Irving, Texas-based provider of Transaction Processing Solutions and Enterprise Information Management solutions. Novitex is a West Stamford, Conn.-based provider of technology-driven managed services that is owned by Apollo Global Management LLC.

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