UBS, Deutsche Bank and JPMorgan are getting together to back an acquisition deal for Ply Gem Industries. The trio are set to launch a $292 million incremental senior secured credit facility on Tuesday to finance the $305 million takeover of Alcoa Home Exteriors.
The new credit consists of a five-year, $175 million first-lien term loan and a five-year, $117 million second-lien term loan. Price talk is LIBOR plus 3% on the first lien and LIBOR plus 6 3/4% on the second lien of the new facility, according to a banker. The new financing will sit beside about $470 million of existing debt.
Ply Gem tapped the trio of banks back in February for another tack-on of about $121 million for the acquisition of aluminum and vinyl home products manufacturer, AWC Holdings, from Linsalata Capital Partners. The deal was priced at LIBOR plus 2 1/2% (CIN, 2/10).
Ply Gem has an existing $70 million revolver and a $399 million first-lien term loan that mature in 2009 and 2011, respectively. Standard & Poor's placed the company's ratings on CreditWatch with negative implications Sept. 25 following the announcement of the acquisition. Debt to EBITDA leverage is 5.7 times for the 12 months ending July 1, according to the ratings agency.
Kearney, Mo.-based Ply Gem manufactures and markets a range of products for use in the residential new construction, do-it-yourself and professional renovation markets. Ply Gem is owned by New York-based private equity company Caxton-Iseman Capital. Alcoa Home Exteriors, a manufacturer of a variety of home siding and shutters, is a subsidiary of aluminum producer Alcoa. Calls to Shawn Poe, Ply Gem cfo, and a Caxton-Iseman representative were not returned by press time.