Credit Suisse First Boston and Lehman Brothers last Monday launched syndication of a multicurrency deal for Pregis Corp., a business being formed through AEA Investors' acquisition of almost all of Pactiv Corp.'s North American and European protective and specialty packaging businesses. The loans include a six-year, $50 million multi-currency revolver and a seven-year, $85 million first-lien term loan "B-1." Pricing on both tranches is LIBOR plus 2 1/2%. The deal also includes a E68 million proposed senior secured first-lien term loan "B-2," E100 million senior secured floating rate second-lien notes and $150 million proposed senior subordinated notes.
Based in Lake Forest, Ill., Pactiv agreed to the sale for approximately $530 million and the assumption of about 6.8 times 2004 EBITDA in June. In 2004 the division being sold had sales of about $838 million and operating income of about $60 million, according to the company. Products within the sold business include air cushioning, air padded mailers, flexible packaging and hospital supplies. Pactiv is holding onto its European molded fiber business and Asian operations, which had been part of the protective and flexible group.
Standard & Poor's assigned a B+ rating to the debt and a B corporate rating to Pregis. Moody's Investors Service assigned a B1 rating to the credit. Calls to AEA and Andrew Campbell, Pactiv's senior v.p. and cfo, were not returned.