J.P. Morgan and Credit Suisse First Boston are preparing a financing package backing J.P. Morgan Partners' $500 million acquisition of Brand Services from DLJ Merchant Banking. A banker confirmed the deal would be launched next month, but he declined to be more specific. Pricing and terms could not be ascertained. Calls to J.P. Morgan and CSFB were not returned.
DLJ's private-equity unit put Brand Services up for sale this past April, with the St. Louis company going for the price sought, a banker said. DLJ acquired the industrial scaffolding company from Waste Management for $190 million in 1996, and the firm reportedly has made a $130 million profit on the investment. Calls to officials at J.P. Morgan's private-equity unit were not returned.
Standard & Poor's has put Brand Services' single-B corporate credit rating on watch with developing implications. The fear is that the new owners could decide to capitalize the company in a manner that has an unfavorable effect on its already aggressive financial profile, the agency stated. The company's EBITDA is more than $50 million, but its total debt is already $177 million.