Morgan Stanley and JPMorgan started things off for the acquisition of NCO Group with a $365 million bridge facility last Tuesday. Pricing on the bridge is LIBOR plus 5%, according to a banker. One Equity Partners along with Michael Barrist, ceo, are taking the company private in a deal valued at approximately $1.26 billion.
The remainder of the financing will come as a bank loan, with JPMorgan on the left and Morgan Stanley on the right, expected to hit the market around the first week of October. The facility could be up to $550 million in senior secured debt financing, consisting of a $100 million revolver and $450 million in term loans, according to a filing with the Securities and Exchange Commission. One investor thought the deal would probably get done fairly easily.
Stockholders will receive $27.50 in cash for each share and the transaction is expected to be completed in the fourth quarter. The Federal Trade Commission and the U.S. Department of Justice approved the acquisition in August; it is currently pending approval of shareholders and the closing of the proposed bank financing.
NCO doubled its borrowing capacity in June 2005 with an amended and restated $300 million revolver with a $100 million accordion feature. The financing was priced in a range of LIBOR plus 75-150 basis points, down from LIBOR plus 2 1/2-3% on its previous bank line (LMW, 7/24/2005).
Based in Horsham, Pa., NCO is a business process outsourcing service. One Equity Partners is a private equity firm managing $5 billion of investments and commitments for JPMorgan Chase. Calls to John Schwab, chief accounting officer of NCO, were not returned. Calls to One Equity Partners were referred to a JPMorgan spokeswoman who declined comment.