MKS Instruments plans $850 million credit facility for Newport buy

By Sara Rosenberg

New York, Feb. 23 – MKS Instruments Inc. has received a commitment for an $850 million senior secured credit facility to help fund its acquisition of Newport Corp., according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

The facility consists of an $800 million seven-year covenant-light term loan and a $50 million five-year ABL revolver.

Pricing on the term loan is expected at Libor plus 450 basis points with a 0.75% Libor floor, and the debt includes 101 soft call protection for six months.

Amortization on the term loan is 1% per annum.

Revolver pricing is expected at Libor plus 175 bps initially. The spread can range from Libor plus 150 bps to 200 bps based on average excess availability.

The revolver has a commitment fee of 37.5 bps with a step-down to 25 bps based on the average daily unused portion.

Barclays and Deutsche Bank Securities Inc. are the joint lead arrangers and bookrunners on the deal, with Barclays the left lead on the term loan and Deutsche Bank the left lead on the revolver.

Under the agreement, Newport is being bought for $23.00 per share. The all-cash transaction is valued at about $980 million.

The combined company is expected to have around $1.4 billion in pro forma annual revenue, based on the two companies’ 2015 historical results.

Pro forma gross debt to EBITDA at closing will be around 2.8 times, and net debt to EBITDA will be about 1.3 times.

Closing is expected in the second quarter, subject to regulatory approval and approval by Newport’s shareholders.

MKS is an Andover, Mass.-based provider of instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters of advanced manufacturing processes. Newport is an Irvine, Calif.-based supplier of advanced-technology products and systems to customers in the scientific research, microelectronics, life and health sciences, industrial manufacturing and defense/security markets.

© 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.