Copeland flexes up to $2.75 billion term loan to SOFR plus 300 bps

By Sara Rosenberg

New York, May 3 – Copeland reduced pricing on its up to $2.75 billion seven-year term loan B (Ba3/BB-/BB+) to SOFR plus 300 basis points from SOFR plus 350 bps, according to a market source.

As before, the term loan has a 0% floor, an original issue discount of 99 and 101 soft call protection for six months.

RBC Capital Markets, Barclays, Wells Fargo Securities LLC, SMBC, Goldman Sachs Bank USA, BNP Paribas Securities Corp., HSBC Securities (USA) Inc., JPMorgan Chase Bank, Mizuho, Truist, BofA Securities Inc., MUFG, Bank of Nova Scotia, TD Securities (USA) LLC, CIBC, Regions, Fifth Third and US Bank are the leads on the deal.

Commitments continue to be due at noon ET on Thursday, the source added.

Proceeds will be used with $2.25 billion of senior secured notes and $500 million equivalent euro senior secured notes to help fund the acquisition by Blackstone of a majority stake in Emerson Electric Co.’s Climate Technologies business (Copeland) for an aggregate purchase price of $14 billion.

Under the agreement, Emerson will receive upfront, pre-tax cash proceeds of about $9.5 billion and a note of $2.25 billion at close and retain 45% common equity ownership in the new stand-alone joint venture.

In the October press release, it was said that the cash consideration would be funded by $5.5 billion of fully committed debt financing ($6.2 billion inclusive of an unfunded ABL facility) and $4.4 billion of equity contribution from Blackstone. Abu Dhabi Investment Authority and GIC will invest alongside Blackstone as part of the transaction.

The release also said that the ABL revolver and term loan A portion of the debt financing was being led by RBC, Wells Fargo and SMBC.

Closing is expected in the first half of this year, subject to regulatory approvals and customary conditions.

Copeland is a manufacturer of mission critical, highly engineered heating, ventilation, air conditioning and refrigeration components.

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