Nellson Gives Back To Shareholders
Nellson Nutraceutical recently came back to the loan market for $100 million in financing to fund the repurchase of shares from its shareholders--including investors in the Fremont Partners III fund.
Nellson Nutraceutical recently came back to the loan market for $100 million in financing to fund the repurchase of shares from its shareholders--including investors in the Fremont Partners III fund. The combination of a strong market and solid company performance opened the window of opportunity, explained Bill Lenihan, a managing director of sponsor Fremont Partners and a director at Nellson.
Lenihan noted that the company, which makes functional bars and powders, has significantly grown its EBITDA and cash flow allowing for the additional leverage. He said the leverage had not significantly increased, but he declined to provide the exact multiples.
UBS and Goldman Sachs lead the add-on. UBS has been the lead on Nellson's bank loan since the company put in place its original acquisition financing in 2002. Goldman signed on as a co-syndication agent when Nellson completed a $285 million refinancing in conjunction with the purchase of the Montreal-based Bariatrix Products International last July (LMW, 7/20).
The new $100 million worth of loans includes a $25 million add-on to the company's existing "B" term loan, bringing the total amount up to about $280 million. The new financing also contains a $75 million second-lien piece. The add-on "B" loan is priced at LIBOR plus 3%, the same as the company's existing term loan. The second-lien is priced at LIBOR plus 51/2%. The second-lien tranche was chosen after the market appetite for the "B" loan maxed out with the $25 million add-on, explained Lenihan.