Mattress Firm dips with acquisition news; Cable & Wireless, Premiere, Cypress update deals

By Sara Rosenberg

New York, Nov. 30 – Mattress Firm Holding Corp.’s term loan was a bit lower in the secondary market on Monday following the company’s announcement that it will be taking on additional debt to fund the acquisition of Sleepy’s.

Over in the primary market, Cable & Wireless Communications plc (Sable International Finance Ltd.) widened the spread and original issue discount on its term loan B debt, and extended the call protection.

Also, Premiere Global Services Inc. upsized its first-lien term loan while revising pricing, discount and call protection and removed a second-lien term loan from its capital structure, and Cypress Semiconductor Corp. switched up its financing plans as it removed its term loan B from market and instead will launch a term loan A.

Additionally, Konecranes Terex plc released price talk with launch, and Microsemi Corp., Kraton Polymers LLC, Edelman Financial Center LLC, United Site Services, Albertsons Cos. LLC and ClubCorp joined this week’s calendar.

Mattress Firm softens

Mattress Firm’s term loan slid a little lower in trading on Monday as the company revealed that it will used new debt and cash on hand to fund the purchase of Sleepy’s, according to a trader.

The term loan was quoted at 99 3/8 bid, 99 7/8 offered, down from 99½ bid, par offered, the trader said.

Under the agreement, HMK Mattress Holdings LLC, the holding company of Sleepy’s and related entities, is being bought for $780 million, subject to working capital and other customary adjustments.

Company officials said in a conference call that about $740 million in new debt will be used for the transaction.

The new debt is expected to include an add-on to the company’s existing term loan and potentially ABL revolver borrowings, officials continued.

Pro forma leverage will be around 4 times, officials added in the call.

Closing is expected in the first half of Mattress Firm’s fiscal year 2016, subject to regulatory approvals.

Mattress Firm is a Houston-based mattress retailer. Sleepy’s is a Hicksville, N.Y.-based mattress retailer.

Cable & Wireless revised

Switching to the primary market, Cable & Wireless lifted pricing on its $800 million seven-year covenant-light term loan B (Ba2/BB-) to Libor plus 475 basis points from talk of Libor plus 400 bps to 425 bps, moved the original issue discount to 98 from 99 and pushed out the 101 soft call protection to one year from six months, a source said.

The loan B, which is split between a $440 million term loan B-1 and a $360 million term loan B-2, still has a 0.75% Libor floor.

Allocations are expected this week, the source added.

Bank of America Merrill Lynch, Goldman Sachs Bank USA and Scotiabank are the joint global coordinators on the deal and bookrunners with BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, ING and RBC Capital Markets LLC.

In addition to the term loans, the company plans on getting a $570 million revolver.

Cable being bought

Cable & Wireless’ debt is being done in connection with its acquisition by Liberty Global plc for a total equity value of about £3.5 billion ($5.3 billion), or an implied price of 78.04p per share.

Proceeds from the term loan B-1 will be used to refinance $400 million of 8¾% senior secured notes due 2020, the term loan B-2 will be used to fund a $360 million special dividend payable to Cable & Wireless shareholders, and the revolver will be used to refinance existing revolving credit facilities.

Closing is subject to, among other conditions, Liberty Global and Cable & Wireless shareholder approvals, certain regulatory approvals and court sanction of the scheme of arrangement.

Cable & Wireless is a London-based telecommunications company. Liberty Global is a London-based cable company.

Premiere Global restructures

Premiere Global Services upsized its first-lien term loan to $550 million from $500 million, increased pricing to Libor plus 600 bps from Libor plus 525 bps, widened the original issue discount to 98.5 from 99, extended the 101 soft call protection to one year from six months and shortened the maturity to six years from seven years, according to a market source, who said the 1% Libor floor was unchanged.

Furthermore, the 12-month MFN sunset was removed, and the incremental free and clear was modified to $90 million in year one and $50 million thereafter, from $120 million.

In addition, the $150 million eight-year second-lien term loan was eliminated from the capital structure, the source remarked.

Talk on second-lien term loan had been Libor plus 925 bps with a 1% Libor floor, a discount of 98 to 98.5 and call protection of 102 in year one and 101 in year two.

The company’s now $600 million senior secured facility also includes a $50 million five-year revolver.

Premiere funding buyout

Proceeds from Premiere Global’s credit facility and equity will be used to finance its acquisition by Siris Capital Group LLC for $14.00 per share in cash. The transaction is valued at about $1 billion.

To help compensate for the loss of the second-lien loan, Siris Capital is providing an additional $100 million of preferred equity, the source added.

Leads, Barclays, SunTrust Robinson Humphrey Inc. and Macquarie Capital (USA) Inc., are asking for commitments to the revised deal by noon ET on Friday.

First-lien leverage is 3.4 times, up from 3.1 times under the original structure, total leverage is 4 times and net total leverage is 3.5 times.

Closing is subject to customary conditions, including the receipt of shareholder approval and regulatory approvals. The transaction is not subject to any financing condition.

Premiere Global is an Atlanta-based provider of collaboration software and services.

Cypress shifts financing

Cypress Semiconductor pulled its $400 million seven-year senior secured term loan B from market that was talked at Libor plus 375 bps to 400 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, according to a market source.

However, in lieu of the term loan B, the company will launch with a lender call at 10 a.m. ET on Tuesday a $100 million term loan A due March 12, 2020, the source said.

Talk on the term loan A is Libor plus 325 bps with no floor and an original issue discount of 99.

Commitments are due on Dec. 11, the source added.

Credit Suisse Securities (USA) LLC and Fifth Third Bank are leading the term loan A that will be used to fund a share buyback.

The pulled term loan B would have refinanced existing debt in addition to funding the share buyback.

Cypress is a San Jose, Calif.-based manufacturer of mixed-signal integrated circuits.

Konecranes Terex sets talk

Also on the primary front, Konecranes Terex held its New York bank meeting on Monday, launching its $900 million-equivalent U.S. dollar and euro seven-year term loan B with talk of Libor plus 350 bps to 375 bps with a 0.75% Libor floor and an original issue discount of 99, a market source remarked.

As previously reported, the term loan B has 101 soft call protection for six months and the euro piece of the loan can be sized at up to €400 million.

A bank meeting for European investors will take place in Europe at 7:30 a.m. ET on Tuesday.

Commitments are due on Dec. 10.

In addition to the term loan, the company is planning on getting a $700 million multi-currency revolver.

Konecranes Terex merging

Proceeds from Konecranes Terex’s credit facility will be used to help fund the merger of Terex Corp. and Konecranes plc, and to refinance existing bank facilities at both companies as needed. The combined company will be named Konecranes Terex plc.

Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Commerzbank, Credit Agricole and Nordea Bank are leading the deal.

Closing is expected in the first half of 2016, subject to approval by Terex and Konecranes shareholders, regulatory approvals and customary conditions.

Konecranes is a Hyvinkaa, Finland-based provider of lifting solutions as well as services for lifting equipment and machine tools of all makes. Terex is a Westport, Conn.-based diversified equipment manufacturer.

Microsemi schedules meeting

Microsemi set a bank meeting for 1 p.m. ET in New York on Wednesday to launch a $2,425,000,000 senior secured credit facility, according to a market source.

The facility consists of a $350 million revolver, a $650 million term loan A and a $1,425,000,000 term loan B, the source said.

By comparison, the company previously said in an 8-K filed with the Securities and Exchange Commission that it received a commitment for a $2,925,000,000 senior secured credit facility consisting of a $350 million five-year revolver, a $375 million five-year term loan A and a $2.2 billion seven-year covenant-light term loan B.

Morgan Stanley Senior Funding Inc., The Bank of Tokyo-Mitsubishi UFJ Ltd. and Deutsche Bank Securities Inc. are leading the deal.

Microsemi buying PMC

Proceeds from Microsemi’s credit facility, cash on hand and common stock will be used to fund the acquisition of PMC-Sierra Inc. and refinance existing debt.

Specifically, PMC shareholders will receive $9.22 in cash and 0.0771 of a share of Microsemi common stock for each share of PMC common stock through an exchange offer. The transaction is valued at about $2.5 billion.

Closing is expected in the first quarter of 2016, subject to regulatory approvals, the tender of at least a majority of the outstanding shares of PMC’s common stock and customary conditions.

Microsemi is an Aliso Viejo, Calif.-based provider of semiconductor solutions. PMC is a Sunnyvale, Calif.-based fabless semiconductor company.

Kraton coming soon

Kraton Polymers emerged with plans to hold a bank meeting at 11 a.m. ET in New York on Tuesday to launch a $1.35 billion six-year senior secured term loan B talked with a 1% Libor floor and 101 soft call protection for one year, a market source said. Spread and original issue discount talk are not yet available.

Commitments are due on Dec. 11, the source added.

Credit Suisse Securities (USA) LLC, Nomura Securities International Inc. and Deutsche Bank Securities Inc. are leading the loan that will be used to help fund the $1.37 billion acquisition of Arizona Chemical Holdings Corp. from American Securities LLC and to refinance existing debt.

Closing is expected in late 2015 or early 2016.

Kraton is a Houston-based producer of engineered polymers and styrenic block copolymers. Arizona Chemical is a biorefiner of pine chemicals with executive offices in Jacksonville, Fla. and Almere, the Netherlands.

Edelman readies deal

Edelman Financial scheduled a lender presentation for 10:30 a.m. ET on Tuesday to launch a $260 million senior secured credit facility, a market source remarked.

The facility consists of a $30 million revolver and a $230 million term loan B, the source added.

Morgan Stanley Senior Funding Inc. and UBS AG are leading the deal that will be used to help fund the buyout of the company by Hellman & Friedman LLC.

Edelman Financial is an independent financial planning firm.

United Site joins calendar

United Site Services set a lender call for 10 a.m. ET on Thursday to launch a fungible $50 million add-on term loan, according to a market source.

Antares Capital is leading the deal that will be used to fund future add-on acquisitions.

Including the add-on term loan, the total term loan size will be $262.9 million, the source said.

Senior net leverage is 3.2 times and total net leverage is 4 times.

United Site Services is a Westborough, Mass.-based provider of portable sanitation solutions.

Albertsons plans call

Albertsons will hold a lender call at 10 a.m. ET in on Tuesday for current and prospective loan lenders, according to a market source.

Citigroup Global Markets Inc. and Bank of America Merrill Lynch are leading the transaction, for which further details have not yet been announced, the source said.

Recently, the company said in an S-1/A with the Securities and Exchange Commission that after its proposed initial public offering of common stock, it intends to enter into a new $4 billion senior secured ABL facility and a new senior secured term loan that is expected be in the form of an amended and restated version of the existing ABS/Safeway term loan, and issue new senior unsecured notes.

Proceeds from the new debt and IPO will be used to refinance existing debt.

Albertsons is a Boise, Idaho-based food and drug retailer.

ClubCorp on deck

ClubCorp scheduled a call for 9:30 a.m. ET on Tuesday for existing and prospective loan investors, a market source remarked.

Citigroup Global Markets Inc. is leading the deal.

ClubCorp is a Dallas-based owner and operator of private golf and country clubs and business, sports and alumni clubs.

Lannett closes

In other news, Lannett Co. Inc. completed its acquisition of Kremers Urban Pharmaceuticals Inc., the U.S. specialty generic pharmaceuticals subsidiary of biopharmaceuticals company UCB SA, for $1.23 billion plus potential contingency payments, a news release said.

For the transaction, Lannett got a new $1,035,000,000 senior secured credit facility (B1/BB-) that includes a $125 million five-year revolver, a $275 million five-year term loan A and a $635 million seven-year term loan B.

Pricing on the revolver is Libor plus 475 bps with a 50 bps undrawn fee, pricing on the term loan A is Libor plus 475 bps with a 1% Libor floor, and it was sold at an original issue discount of 92.5, and pricing on the term loan B is Libor plus 537.5 bps with a 1% Libor floor, and it was issued at a discount of 90. Both term loans have 101 soft call protection for one year.

Lannett lead banks

Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC and Citigroup Global Markets Inc. led Lannett’s credit facility.

During syndication, the term loan B was downsized from $1.16 billion, pricing was increased from talk of Libor plus 425 bps to 450 bps, the discount widened from 98.5, and the call protection was extended from six months. Also, the term loan A was added to the capital structure, and revolver pricing was lifted from talk of Libor plus 425 bps to 450 bps.

With the term loan B downsizing, the company reallocated funds to $250 million of senior unsecured notes, with $200 million to be held by UCB SA and UCB Manufacturing Inc., the sellers.

Lannett is a Philadelphia-based manufacturer of generic pharmaceutical products.

Computer Sciences completed

Computer Sciences Government Services Inc. closed on its spin-off from Computer Sciences Corp. and $390 million acquisition of SRA from Providence Equity Partners and SRA’s founder, Ernst Volgenau, as well as members of its management team, according to a news release.

To help fund the transaction and to refinance SRA’s existing $1 billion of net debt, Computer Sciences Government Services got a $3.5 billion senior secured credit facility (Ba2/BB+/BBB) consisting of a $700 million five-year revolver priced at Libor plus 175 bps, a $600 million three-year term loan A-1 priced at Libor plus 162.5 bps, a $1.45 billion five-year term loan A-2 priced at Libor plus 175 bps and a $750 million seven-year covenant-light term loan B priced at Libor plus 300 bps with a step-down to Libor plus 275 bps when total net leverage is 2.5 times and a 0.75% Libor floor.

The term loan B has 101 soft call protection for one year and was sold at an original issue discount of 99.5.

Computer Sciences bookrunners

RBC Capital Markets LLC, Mitsubishi UFJ Financial Group, Bank of America Merrill Lynch and Scotiabank led Computer Sciences Government Services’ credit facility, with RBC left lead on the term loan B and Mitsubishi left lead on the revolver and term A debt.

During syndication, term loan B size firmed from revised talk of up to $1 billion and an initial size of $1.25 billion, the spread finalized at the low end of the Libor plus 300 bps to 325 bps talk, the step-down was added, the call protection was extended from six months, and the MFN sunset provision was removed.

When the term loan B was downsized, the revolver was upsized from $500 million, the term loan A-1 was increased from $500 million, and the term loan A-2 was lifted from $1.25 billion.

Computer Sciences Government Services is a Falls Church, Va., provider of IT services to the U.S. federal government. SRA is a Fairfax, Va.-based provider of IT and professional services to the U.S. federal government.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.