ConvergeOne to launch $1.53 billion credit facilities on Wednesday

By Sara Rosenberg

New York, Nov. 26 – ConvergeOne Holdings Inc. is scheduled to hold a bank meeting at 10 a.m. ET in New York on Wednesday to launch $1,525,000,000 of senior secured credit facilities, according to a market source.

The facilities consist of a $250 million five-year ABL revolver, a $925 million seven-year covenant-light first-lien term loan and a $350 million eight-year covenant-light second-lien term loan, the source said.

The term loans have a 0% Libor floor.

Wells Fargo is the lead arranger and bookrunner on the ABL revolver. Deutsche Bank Securities Inc., UBS Investment Bank, Citigroup Global Markets Inc., Macquarie Capital (USA) Inc. and Societe Generale are the bookrunners on the term loans, with Deutsche the left lead on the first-lien and UBS the left lead on the second-lien.

Based on the commitment letter, pricing on the ABL revolver is expected at Libor plus 150 basis points, with one 25 bps step-down and one 25 bps step-up based on excess availability. The revolver has a 0% Libor floor.

The commitment letter outlined the first-lien term loan at Libor plus 400 bps with a 25 bps step-down at first-lien net leverage of 4.25 times and 101 soft call protection for six months, and second-lien term loan at Libor plus 775 bps with call protection of 102 in year one and 101 in year two.

Proceeds will be used to help fund the buyout of the company by CVC Fund VII for $12.50 per share, or about $1.8 billion.

Other funds for the transaction will come from up to $750 million of equity.

Closing is expected this quarter or in the first quarter of 2019, subject to customary conditions and regulatory approvals.

ConvergeOne is an Eagan, Minn.-based IT and managed services provider of collaboration and technology solutions.

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