Cetera’s financing of Avantax acquisition to include $700 million secured debt

By Paul A. Harris

Portland, Ore., Oct. 16 – In addition to $1.989 billion of bank debt, Cetera Financial Group Inc. (Aretec Group Inc.) plans to use proceeds from $700 million of “other secured debt” to finance its acquisition of Avantax Inc., according to a market source.

The bank portion of the financing, a $1.689 billion term loan and a $300 million revolver, are set to launch on Tuesday via arrangers UBS Securities LLC, Goldman Sachs Bank USA, BMO Capital Markets Corp., Deutsche Bank Securities Inc., Truist Securities Inc., Jefferies LLC, Morgan Stanley Senior Funding Inc., Barclays and Antares Capital. Commitments are due Oct. 26.

Proceeds will be used with $700 million of other secured debt to fund the acquisition of Avantax for $26.00 in cash per share in a transaction valued at about $1.2 billion, inclusive of Avantax’s net debt, and to refinance the company’s existing first-lien term loan due 2025.

In conjunction with the acquisition, Genstar and co-investors will be reinvesting in Cetera with new and rollover equity.

Pro forma for the transaction, the first-lien term loan will total around $2.439 billion.

Closing is expected by the end of this year.

San Diego-based Cetera and Dallas-based Avantax are financial services providers.

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