Goldman Sachs and Wachovia Securities launched syndication last Tuesday for Mitchell International's $155 million dividend recap. The facility comprises a $15 million revolver, $95 million "B" loan and $45 million second-lien term loan. The revolver and "B" loan went out to investors at LIBOR plus 3%, while the second tier is being talked in the LIBOR plus 7% area, a banker said.
Proceeds will be used to pay a $110.3 million dividend to shareholders. Private equity firm Hellman & Friedman acquired Mitchell in 2000 from The Thompson Corp. Proceeds will also be used for a special employee bonus pool, working capital and to retire $23.4 million of debt. The first-and second-lien term loans amortize at a rate of 1% per year with the balance due at the maturity date, according toMoody's Investors Service. Both liens are secured by the same assets and stocks, but the second-lien loan holders have a second priority claim.
Mitchell provides information services and technology to insurance companies and automotive repair facilities. Standard & Poor's believes the company would be restructured, rather than liquidated, in the event of default due to the value of the company's database of historical claims information and the software built around it.
Alex Sun, Mitchell's cfo, referred calls to Goldman bankers. Wachovia and Goldman bankers declined comment. Hellman & Friedman officials did not return calls.