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JPM, Goldman Team Up On Aramark Buyout

10 Aug 2006

JPMorgan and Goldman Sachs have committed to provide $4.6 billion in financing for the buyout of Aramark, according to a filing with the Securities and Exchange Commission.

JPMorgan and Goldman Sachs have committed to provide $4.6 billion in financing for the buyout of Aramark, according to a filing with the Securities and Exchange Commission. The company is looking for a $3.75 billion term loan, a $600 million revolver and a $250 million letter of credit, according to the filing. Pricing could not be determined by press time. Aramark is also seeking $1.7 billion in a senior increasing rate bridge facility and a $770 million senior subordinated increasing rate bridge facility.

The company announced last week it would be taken private by Joseph Neubauer, ceo, and a group of investors including GS Capital Partners, CCMP Capital Advisors, JPMorgan Partners, Thomas H. Lee Partners and Warburg Pincus for approximately $8.3 billion, including the assumption of about $2 billion in existing debt. Stockholders will receive $33.80 for each share of common stock. Neubauer previously took the company private in 1984 and is expected to commit as much as $250 million of private funds to the deal.

The company's third quarter filings proved weaker than the first two quarters, with a 1.3% drop in adjusted EBITDA, as opposed to an 8.1% increase in the first half of the year. After the acquisition, the company will have a debt leverage ratio of 8.9 times.

Goldman and JPM are also acting as financial advisors to the private equity group. Credit Suisse is acting as a financial advisor to the special committee, comprised entirely of independent directors, and Shearman & Sterling is acting as legal advisor.

Standard & Poor's dropped the company's corporate credit rating from BBB- to BB+ on Aug. 8. It also reported that all ratings would remain on CreditWatch, where the company was placed in May following the announcement of the buyout.

Philadelphia-based Aramark is a provider of food-services, facilities management, and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and global businesses. A company spokeswoman referred questions to the company's 13/D SEC filing. Calls to officials of the investor group were not returned. A JPMorgan spokeswoman declined comment and calls to a Goldman Sachs banker were not returned.

10 Aug 2006