Lehman Brothers and Deutsche Bank last Thursday launched syndication of a $435 million senior secured credit facility for AlixPartners. The deal is being used to finance a recapitalization of the company announced in August. Hellman & Friedman, along with the company's managing directors and more than 500 employees, will hold a majority interest in the firm after the recap is completed. Investors are giving the deal a hard look. "There's a lot of leverage on a company that didn't have it in the past," an investor said. "We just don't think the business can handle the debt."
The deal consists of a six-year, $50 million revolver and a seven-year, $385 million term loan. Pricing is LIBOR plus 2 1/2% on both tranches, according to an investor. Pro forma lease-adjusted total debt to EBITDA leverage is 4.6 times, according to a Standard & Poor's release.
The transaction is valued at approximately $872 million and is expected to close mid-October. Lehman Brothers assisted AlixPartners in its search for an investor, according to a company spokeswoman.
S&P rated the new credit BB- with a 3 recovery rating, citing dependence on highly mobile senior consulting professionals and the competitive market for consulting services. Moody's Investors Service rated the credit B1.
With offices in six countries, including the U.S., Germany and Japan, AlixPartners is a corporate turnaround and financial advisory firm. A spokeswoman at Hellman & Friedman did not return calls seeking comment.