Aearo to get $175 million credit facility, $175 million bonds for buyout

By Sara Rosenberg

New York, March 11 - Aearo Corp. is expected to get a new $175 million credit facility and issue $175 million of high-yield notes to help support Bear Stearns Merchant Banking's acquisition of the company from Vestar Capital for $385 million, including assumed debt of about $210 million, according to a market source. Deutsche Bank and Bear Stearns are leading the deals, with Deutsche listed on the left.

The credit facility consists of a $125 million term loan and a $50 million revolver. Pricing and a date for the bank meeting are still to be determined, although the deal is expected to be March business, according to the source.

Aearo has also received a commitment for a $175 million subordinated debt bridge facility that will be taken out with a high-yield deal. The roadshow for the bonds is anticipated to begin the week of March 22, with pricing slated for late-March to early-April, the source added.

Upon closing of the acquisition, which is expected in early April, Aearo's management team will make a substantial capital investment and will own approximately a quarter of the company's fully diluted common stock, including options. Vestar Capital and its affiliates plan to retain up to 10% of the company's stock at closing, according to a company news release.

Aearo is an Indianapolis-based personal protection equipment company.

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