The Deutsche Bank-led dividend deal for Sturm Foods was increased and flexed down last Thursday morning due to oversubscription. The first-lien term loan was increased by $40 million to $390 million, while the second lien was reduced by $20 million to $150 million. The additional $20 million is being used to increase the dividend payout to HM Capital to approximately $320 million. A $320 million revolver remains unchanged. Commitments were due on Friday.
Pricing on the first lien was reduced to LIBOR plus 2 1/2% from LIBOR plus 2 3/4%. The second-lien term loan saw pricing fall to LIBOR plus 6% from LIBOR 6 1/4%, with 102, 101 call protection.
The deal originally launched Jan. 11 as a $540 million dividend recap (CIN, 1/15). The changes increase first-lien leverage to 4.5 times from 4 times, with total leverage increasing to 6.2 times from 6 times. The B/B1 first-lien and CCC+/Caa1 second-lien ratings are unchanged. Based in Manawa, Wis., Sturm manufactures various products for the food industry, including hot cereals and sugar free drink mix sticks. Calls to a company spokesman were not returned. An HM Capital official did not return a call.