Morgan Stanley hit the market last Wednesday with $235 million of debt financing to help back the acquisition of Metrologic Instruments by Francisco Partners, a banker said. The deal comprises $160 million in first-lien loans, including a five-year, $35 million revolver and a seven-year, $125 million term loan "B." The financing also includes an eight-year, $75 million second-lien term loan, according to a banker. Pricing on the first lien is LIBOR plus 3% and LIBOR plus 7% on the second.
"It's going really well. There were a lot of early orders," said the banker. Metrologic agreed to be acquired by Francisco Partners in mid-September for $18.50 per share, or approximately $398.5 million, according to a filing with the Securities and Exchange Commission. The remainder of the acquisition will be financed by $128 million in equity from Francisco Partners. There will also be approximately $60 million of equity financing from C. Harry Knowles, Metrologic ceo and founder, and Elliott Associates, who are investing alongside Francisco Partners, according to the filing.
Moody's Investors Service rated the deal's first lien B1 and the second lien Caa1, reflecting high debt levels being assumed to fund the leverage recapitalization, Metrologic's recent sale of Adaptive Optics Associates and its strong, but softening, operating margins and increasing market share. Standard & Poor's rated the first lien B+ and the second B-.
Based in Blackwood, N.J., Metrologic is a supplier of data capture and collection hardware and image processing software for bar-code scanners. Michael Coluzzi, cfo, was out of the office and could not be reached. Calls to a company spokesman and Andrew Kowal, v.p. at Francisco Partners, were not returned.