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Adesa sets Thursday launch for $1.79 billion facility
By Sara Rosenberg
New York, March 20 - Adesa Inc. has scheduled a bank meeting for Thursday morning to launch its proposed $1.79 billion senior secured credit facility, according to a market source.
Bear Stearns, UBS, Goldman Sachs and Deutsche Bank are the lead banks on the deal, with Bear the left lead.
The facility consists of a $300 million revolver that will have a covenant and a $1.49 billion covenant-light term loan B, the source said, adding that price talk is not yet available.
Proceeds will be used to help fund the leveraged buyout of Adesa by Kelso & Co., GS Capital Partners, ValueAct Capital and Parthenon Capital for $27.85 per share in cash.
As part of the transaction, Insurance Auto Auctions, Inc., a Kelso and Parthenon Capital-owned provider of automotive salvage auction and claims processing services, will be combined with Adesa.
The total transaction value, including the contribution of Insurance Auto, the assumption or refinancing of about $700 million of debt and the payment of related fees and expenses, is $3.7 billion. The contemplated refinancing is expected to include the defeasance of Adesa's existing 7 5/8% senior subordinated notes due 2012 and a tender offer for Insurance Auto's existing 11% senior notes due 2013.
In addition to the new credit facility, the company plans on getting $1.1 billion of high-yield bonds that are backed by a commitment for a $600 million senior unsecured bridge loan and a $500 million senior subordinated unsecured bridge loan, according to filings with the Securities and Exchange Commission.
Adesa is a Carmel, Ind., provider of wholesale vehicle auctions and used vehicle dealer floorplan financing.
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