Sensata Technologies revises deal; Advanced Drainage moves up commitment deadline

By Sara Rosenberg

New York, Sept. 17 – In the primary market on Tuesday, Sensata Technologies Inc. tightened the issue price on its amended and extended term loan B, and Advanced Drainage Systems Inc. accelerated the commitment deadline for its term loan B.

Also, ION Corporates, APi Group Inc., Guidehouse, Monotype Imaging Holdings Inc., Excel Fitness Holdings Inc., Hostess Brands LLC and QualTek USA LLC all announced price talk with launch.

Sensata tweaks loan

Sensata Technologies modified the issue price on its amended and extended seven-year covenant-lite senior secured term loan B to par from talk in the range of 99.5 to 99.75, according to a market source.

As before, the term loan is priced at Libor plus 175 basis points with a 0% Libor floor and has 101 soft call protection for six months.

The term loan B is currently sized at roughly $913 million but is expected to be paid down to $472 million with proceeds from a recently priced $450 million senior notes offering.

Recommitments were due at 5 p.m. ET on Tuesday and allocations are targeted for Wednesday.

Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA, Barclays, BofA Securities, Inc., Mizuho Bank and RBC Capital Markets are leading the deal that will amend and extend an existing term loan B due Oct. 14, 2021 and priced at Libor plus 175 bps with a 0% Libor floor.

In addition to the extension, the credit agreement amendment would increase the incremental, and change some operational and restrictive covenants to provide greater flexibility and permissions.

Sensata is a producer of sensors and controls for manufacturers in the automotive, appliance, aircraft, industrial and HVAC markets.

Advanced Drainage accelerated

Advanced Drainage moved up the commitment deadline for its $700 million seven-year first-lien term loan B to 5 p.m. ET on Tuesday from 5 p.m. ET on Thursday, a market source said.

Talk on the term loan B is Libor plus 275 bps to 300 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The company’s $1.05 billion of credit facilities (Ba1/BB) also includes a $350 million five-year revolver.

Barclays, Morgan Stanley Senior Funding Inc., BofA Securities, Inc., PNC Capital Markets, BMO Capital Markets, Fifth Third Bank and HSBC Securities (USA) Inc. are leading the deal that will be used with $350 million of senior notes and a recently completed equity offering to support the acquisition of Infiltrator Water Technologies Ultimate Holdings Inc. and to pay related fees and expenses.

Infiltrator Water, an Old Saybrook, Conn.-based on-site septic wastewater treatment company, was bought on July 31 for about $1.08 billion from Ontario Teachers’ Pension Plan and other stockholders.

Advanced Drainage is a Hilliard, Ohio-based manufacturer of water management products and drainage solutions for use in the construction and infrastructure marketplace.

ION reveals guidance

In more primary happenings, ION Corporates held its bank meeting in New York on Tuesday and announced talk on its $1.75 billion equivalent U.S. dollar and euro six-year first-lien term loan (B2/B) at Libor/Euribor plus 425 bps with a 50 bps step-up if the corporate family rating falls below B2/B, a 0% floor and an original issue discount of 99, according to a market source.

The term loan debt has 101 soft call protection for six months.

Commitments are due at 5 p.m. ET/5 p.m. GMT on Oct. 1.

A bank meeting for European investors will take place in London on Thursday.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing debt and pay related fees and expenses.

ION is a provider of software and solutions focused on corporate treasury and commodities management.

APi proposed terms

APi Group launched at its morning bank meeting a $1.2 billion seven-year senior secured covenant-lite term loan B talked at Libor plus 275 bps to 300 bps with a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, a market source remarked.

The company’s $1.5 billion of credit facilities (Ba3/BB-) also include a $300 million revolver.

Commitments are due at 5 p.m. ET on Sept. 26, the source added.

Citigroup Global Markets Inc., BofA Securities Inc., Barclays and UBS Investment Bank are leading the deal that will be used to help fund the acquisition of the company by J2 Acquisition Ltd. for about $2.05 billion in cash and 28,373,000 ordinary shares in J2. The transaction is valued at about $2.9 billion.

The transaction will also be funded with J2 cash on hand, an early warrant exchange and rollover equity from existing shareholders at $10.25 per share.

Closing is expected on Oct. 1.

APi is a New Brighton, Minn.-based provider of commercial life safety solutions and industrial specialty services, and a specialty contractor. Upon closing, J2, a special-purpose acquisition entity, intends to change its name to APi Group Corp.

Guidehouse launches

Guidehouse released guidance on its fungible $640 million incremental covenant-lite first-lien term loan (B1/B-) and fungible $200 million incremental covenant-lite second-lien term loan (Caa1/CCC) with its morning bank meeting, a market source said.

Talk on the incremental first-lien term loan is Libor plus 375 bps to 400 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and talk on the incremental second-lien term loan is Libor plus 800 bps to 825 bps with a 0% Libor floor, a discount of 98.5 and hard call protection of 102 in year one and 101 in year two, the source continued.

The company is also upsizing its existing revolving credit facility to $125 million from $50 million.

Commitments are due on Oct. 1, the source added.

With this transaction, pricing on the company’s existing first-lien term loan will be lifted from Libor plus 300 bps and pricing on the existing second-lien term loan will increase from Libor plus 750 bps to match pricing on the incremental term loans.

Guidehouse lead banks

RBC Capital Markets, Macquarie Capital (USA) Inc., UBS Investment Bank and Credit Suisse Securities (USA) LLC are leading Guidehouse’s credit facilities.

The new debt will be used to help fund the acquisition of Navigant Consulting Inc. for $28 in cash per share in a transaction valued at about $1.1 billion.

Closing is expected in the fourth quarter, subject to regulatory approvals and customary conditions.

Guidehouse, a portfolio company of Veritas Capital, is a provider of management consulting services to government clients. Navigant is a Chicago-based professional services firm.

Monotype price guidance

Monotype Imaging held its meeting in the morning, launching its $440 million seven-year covenant-lite first-lien term loan (B2/B-) at talk of Libor plus 500 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, according to a market source.

Commitments are due at noon ET on Oct. 2, the source said.

The company’s $625 million of senior secured credit facilities also include a $50 million revolver (B2/B-) and a $135 million privately placed second-lien term loan.

Deutsche Bank Securities Inc., Antares Capital, Macquarie Capital and BNP Paribas Securities Corp. are leading the deal that will be used with up to $275 million of equity to fund the buyout of the company by HGGC for $19.85 per share in cash, representing an aggregate equity value of about $825 million.

Closing is subject to Monotype shareholder approval, regulatory approvals and other customary conditions.

Monotype is a Woburn, Mass.-based provider of type related software solutions and technologies.

Excel discloses talk

Excel Fitness came out with talk of Libor plus 500 bps to 525 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for one year on its $260 million seven-year first-lien term loan that launched with a bank meeting in the morning, a market source said.

The company’s $270 million of credit facilities (B3/B) also include a $10 million five-year revolver.

Commitments are due on Oct. 1, the source added.

Jefferies LLC, Fifth Third Bank and BMO Capital Markets are leading the deal that will be used to refinance the company’s existing credit facility, fund cash to the balance sheet for growth, pay a distribution to shareholders and pay transaction related fees and expenses.

Excel Fitness is an operator and developer of Planet Fitness clubs.

Hostess holds call

Hostess Brands surfaced in the morning with plans to hold a lender call at 10:30 a.m. ET to launch a $979 million covenant-lite first-lien term loan (B1/BB-) due August 2025 talked at Libor plus 225 bps with a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, a market source remarked.

Commitments are due at noon ET on Friday, the source added.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to refinance an existing term loan due 2022 priced at Libor plus 225 bps with a 0.75% Libor floor.

Hostess is a Kansas City, Mo.-based sweet baked goods company.

QualTek details emerge

QualTek held its call in the morning and launched a fungible $150 million add-on senior secured covenant-lite term loan B due July 18, 2025 talked at Libor plus 625 bps with a 1% Libor floor, an original issue discount of 98 to 99 and 101 soft call protection for six months, according to a market source.

Negative covenants are substantially similar to the existing senior secured credit facility with the exception that usage of the ABL facility to fund acquisitions will be subject to minimum availability under the ABL of $45 million and total leverage of 4.5x, the source said.

Citigroup Global Markets Inc. and Fifth Third Bank are leading the deal that will be used to fund acquisitions, to refinance existing debt and for general corporate purposes. Post-close, Citigroup will assume the role of administrative agent from Fifth Third.

In connection with this transaction, pricing on the company’s existing term loan B will be lifted to Libor plus 625 bps from Libor plus 575 bps to match pricing on the add-on loan.

Consents and commitments are due at 5 p.m. ET on Sept. 26, the source added.

QualTek is a King of Prussia, Pa.-based provider of turnkey services to the telecommunications, infrastructure and power industries.

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