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MKS sets talk on $5.28 billion equivalent of term loans ahead of call
By Sara Rosenberg
New York, Oct. 4 – MKS Instruments Inc. released price talk on its $4.28 billion seven-year covenant-lite term loan and a $1 billion equivalent euro seven-year covenant-lite term loan ahead of its lender call scheduled for 10:30 a.m. ET on Wednesday, according to a market source.
Price talk on the U.S. term loan is Libor plus 275 basis points with a 0.5% Libor floor and an original issue discount of 99, and talk on the euro term loan is Euribor plus 275 bps with a 0% floor and a discount of 99, the source said.
The term loans (Ba1/BB-/BBB-) have 101 soft call protection for six months and amortization of 1% per annum.
Commitments are due at 5 p.m. ET on Oct. 21.
JPMorgan Chase Bank, Barclays, BofA Securities Inc., HSBC Securities, Citigroup Global Markets Inc. and Mizuho are the leads on the deal.
The company is also planning on getting a $500 million five-year asset-based revolving credit facility.
Proceeds will be used to help fund the acquisition of Atotech Ltd. for $16.20 in cash and 0.0552 of a share of MKS common stock for each Atotech common share, and to refinance existing credit facilities. The equity value of the transaction is $5.1 billion, and the enterprise value is about $6.5 billion.
Other funds for the acquisition will come from cash on hand.
At close, pro forma gross leverage is expected to be around 4.4x and net leverage is expected to be around 3.7x, based on LTM second quarter 2021 adjusted EBITDA of $1.208 billion.
Closing is expected in the fourth quarter, subject to Atotech shareholder approval, approval of the Royal Court of Jersey, regulatory approvals, and other customary conditions.
MKS is an Andover, Mass.-based provider of technologies that enable advanced processes and improve productivity. Atotech is a Berlin-based specialty chemicals technology company.
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