ONE Group plans $390 million credit facilities for Safflower purchase

By Sara Rosenberg

New York, March 26 – ONE Group Hospitality Inc. has received a commitment for $390 million of senior secured credit facilities in connection with its acquisition of Safflower Holdings Corp., the owner of Benihana Inc., according to an 8-K filed with the Securities and Exchange Commission on Monday.

Deutsche Bank Securities Inc. is the lead arranger and an initial lender with HPS Investment Partners LLC and HG Vora Capital Management LLC.

The facilities consist of a $40 million 54-month revolver and a $350 million five-year covenant-lite term loan.

Pricing on the revolver is expected to range from SOFR plus 550 basis points to 600 bps based on consolidated net leverage, and pricing on the term loan is expected to be SOFR plus 650 bps.

Proceeds will be used with $160 million in preferred equity to fund the $365 million acquisition of Safflower, to refinance the company’s existing credit agreement with Goldman Sachs Specialty Lending Group LP and Goldman Sachs Bank USA, and to pay related fees and expenses.

The preferred equity has initial PIK interest of 13%.

Closing is expected in the second quarter, subject to customary conditions.

Leverage is expected to be 2.2x at close.

ONE Group is a Denver-based restaurant company. Safflower is an operator of Japanese teppanyaki and sushi restaurants.

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