White Cap firms $2.34 billion term loan B at Libor plus 400 bps

By Sara Rosenberg

New York, Oct. 8 – White Cap (AppleCaramel Buyer LLC) set pricing on its $2.335 billion seven-year covenant-lite first-lien term loan B (B2/B) at Libor plus 400 basis points, the low end of the Libor plus 400 bps to 425 bps talk, according to a market source.

Also, the MFN was revised to 50 bps for 12 months from 75 bps for six months, the inside maturity basket was removed and the unutilized restricted payment builder for incremental debt was reduced to 100% from 200%, the source said.

The term loan still has a 0.5% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Deutsche Bank Securities Inc., RBC Capital Markets LLC, Jefferies LLC, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, Mizuho and Nomura are the bookrunners on the deal.

Recommitments were scheduled to be due at 10:30 a.m. ET on Thursday, the source added.

Proceeds will be used with $640 million of senior notes to help fund the buyout of the company by Clayton, Dubilier & Rice from HD Supply Holdings Inc. and combination with Construction Supply Group.

Upon the closing of both transactions, Clayton, Dubilier & Rice funds will hold a 65% ownership interest in the combined company, and the current shareholders of Construction Supply Group, led by Sterling Group, will hold a 35% interest.

The combined transaction, valued at about $4 billion, is subject to customary regulatory approvals.

The acquisition of White Cap is expected to close in October and is not conditioned on the closing of the acquisition of Construction Supply Group.

White Cap is a distributor of specialty concrete and construction products. Construction Supply Group is a distributor of specialty concrete and masonry accessories.

The combination of the two companies is intended to create a distributor of a diverse mix of concrete accessories and specialty construction and safety products with more than $4 billion in annual revenue.

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