WII Components pulls deal; Verint sets talk; LS Power moves funds, trims second-lien spread

By Sara Rosenberg

New York, April 20 - WII Components Inc. (Woodcraft) canceled its credit facility transaction as the company felt it could not obtain the financing on favorable terms, and Verint Systems Inc. came out with official price talk on its credit facility as the deal was launched with a bank meeting on Friday morning.

In other primary news, LS Power Group made some changes to its credit facility, including moving some funds between the first- and second-lien term loans and lowering pricing on the second-lien tranche.

WII Components pulled its $243 million credit facility from the market as the deal was not getting done where the company would have liked, according to sources.

"They were feeling the market out. They didn't have enough flex in it for the market to even address it," a buyside source said.

The company's explanation for pulling the deal was simply that it could not be done "on satisfactory terms and conditions," a news release said.

The canceled credit facility consisted of a $25 million five-year revolver (B1/B) talked at Libor plus 250 basis points with a 50 bps commitment fee, a $154 million six-year first-lien term loan B (B1/B) talked at Libor plus 250 bps and a $64 million seven-year second-lien term loan (Caa1/CCC+) talked at Libor plus 650 bps.

Credit Suisse was acting as the lead bank on the deal.

Proceeds from the facility were going to be used to refinance existing debt, including a tender offer for the company's $119.85 million of 10% senior notes due 2012.

The tender offer was canceled as well since the company did not satisfy the financing condition under the tender.

WII Components is a St. Cloud, Minn.-based manufacturer of hardwood cabinet doors and components.

Verint price talk

Also in the primary, Verint Systems held a bank meeting on Friday morning to kick off syndication on its proposed $675 million senior secured credit facility (B), and in conjunction with the launch, official price talk on the deal surfaced, according to a market source.

Both the $650 million seven-year term loan and the $25 million six-year revolver were presented to lenders with talk of Libor plus 250 bps, the source said.

In addition, the term loan carries pricing step-downs that are based on ratings and filing of audited financials, the source remarked.

Lehman Brothers, Deutsche Bank and Credit Suisse are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of Witness Systems, Inc. for $27.50 per share in cash. The total enterprise value of the transaction is about $950 million.

Where official price talk fell out was not much of a surprise being that the company said it expected the debt to carry an interest rate of Libor plus 250 bps when the acquisition was announced in February.

Other acquisition financing will come from a $293 million preferred stock investment by Comverse Technology, Inc. and from existing cash of the combined company.

Verint is a Melville, N.Y., provider of analytic software-based services for security and business intelligence. Witness is a Roswell, Ga., provider of workforce optimization software and services.

LS Power tweaks deal

LS Power revised its credit facility by shifting $50 million out of its second-lien term loan and into its first-lien term loan, and reverse flexing pricing on the downsized second-lien tranche, according to a market source.

With the changes, the second-lien term loan (B3/B) is now sized at $250 million, down from $300 million, and pricing was reduced to Libor plus 375 bps from original talk at launch of Libor plus 425 bps, the source said.

Meanwhile, the first-lien term loan (B1/BB-) is now sized at $750 million, up from $700 million, while pricing was left unchanged at Libor plus 200 bps, the source continued.

LS Power's $1.315 billion credit facility also includes a $150 million revolver (B1/BB-) and a $165 million synthetic letter-of-credit facility (B1/BB-), with both of these tranches priced at Libor plus 200 bps as well.

JPMorgan, Barclays and Lehman Brothers are the lead banks on the deal.

Proceeds will be used to fund the acquisition of six U.S. natural gas-fired power plants from Mirant Corp.

The U.S. plants being purchased are Zeeland (903 MW), West Georgia (613 MW), Shady Hills (469 MW), Sugar Creek (561 MW), Bosque (546 MW) and Apex (527 MW), constituting a total of 3,619 MW.

LS Power is a fully integrated investor, developer and management team focused on the power sector.

Goodyear closes

The Goodyear Tire & Rubber Co. closed on its new $2.7 billion amended and restated credit facility consisting of a $1.2 billion second-lien term loan (Ba2/B+) due in 2014 priced at Libor plus 175 bps with a step down to Libor plus 150 bps if Ba3/BB- ratings are achieved, and a $1.5 billion asset-based revolver (Ba1/BB) due in 2013 that is priced at Libor plus 125 bps.

In addition, the company also got an amended and restated €505 million revolving credit facility (Ba1) due in 2012 that is priced at Euribor plus 200 bps.

JPMorgan and Deutsche Bank acted as the lead banks on the deal, with JPMorgan the left lead.

Proceeds from the bank deals were used to refinance the company's $1.5 billion first-lien credit facility due April 30, 2010, $1.2 billion second-lien term loan due April 30, 2010 and €505 million credit facility for the Goodyear Dunlop Tires Europe affiliate due April 30, 2010.

Goodyear is an Akron, Ohio, tire company.

Adesa closes

Kelso & Co., GS Capital Partners, ValueAct Capital and Parthenon Capital completed their leveraged buyout of Adesa Inc. for $27.85 per share in cash, according to a company news release.

To help fund the transaction, Adesa got a new $1.865 billion senior secured credit facility (Ba3/B) consisting of a $300 million revolver that is priced at Libor plus 225 bps and a $1.565 billion covenant-light term loan B that is priced at Libor plus 225 bps with a step down to Libor plus 200 bps if total leverage is below 4.75 times or corporate credit ratings of B1/B+ are obtained.

During syndication, the term loan B was upsized by $75 million from $1.49 billion after the company downsized its bond offering by the equivalent amount, pricing on the term loan and the revolver firmed up at the low end of original guidance of Libor plus 225 bps to 250 bps, and the step down was added to the term loan.

Bear Stearns, UBS, Goldman Sachs and Deutsche Bank acted as the lead banks on the deal, with Bear Stearns the left lead.

As part of the transaction, Insurance Auto Auctions, Inc., a Kelso and Parthenon Capital-owned provider of automotive salvage auction and claims processing services, was 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 about $3.7 billion.

Adesa is a Carmel, Ind., provider of wholesale vehicle auctions and used vehicle dealer floorplan financing.

Lenox closes

Lenox Group Inc. closed on its $275 million credit facility consisting of a $100 million term loan due April 20, 2013 priced at Libor plus 450 bps and a $175 million ABL revolver due April 20, 2012 priced at Libor plus 200 bps, according to a company news release.

During syndication, pricing on the term loan was flexed up from original talk of Libor plus 400 bps to 425 bps, and pricing on the revolver ended up at the midpoint or original talk of Libor plus 175 bps to 225 bps.

UBS acted as the lead bank that was used to refinance existing bank debt and fund ongoing working capital requirements.

Lenox is an Eden Prairie, Minn., tabletop, collectible and giftware company.

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