Rayovac Corp. is planning a $50 million add-on to an existing $300 million "B" loan to fund the acquisition of electric shaver and personal care company Remington Products Co., according to Randall Steward, Rayovac cfo. The Madison, Wis.-based battery producer will also issue $300 million in senior subordinated notes to fund the balance of the $322 million acquisition. Steward declined to comment further on the financing, saying that the additional credit has not yet been finalized.
The existing loan was put in place to back the $675 million acquisition of German battery company Varta (LMW, 8/02). Bank of America and Citigroup lead the credit facility, while Citi advised Rayovac on the Remington transaction. Steward declined to comment on whether the banks would lead the add-on. B of A bankers did not return calls. A Citi spokeswoman was unable to provide comment by press time.
The Rayovac loan was well-received in the market last year, with particularly strong demand from European buyers. The "B" piece initially comprised $375 million of the facility, but was downsized by $75 million to make room to increase a E50 million European tranche. Moody's Investors Serivce has placed Rayovac on review for possible downgrade of its Ba3 credit rating following the announcement of the acquisition. Moody's is concerned with Rayovac's post-acquisition financial and legal structure, including the assumption of Remington's debt and the potential costs and benefits of projected synergies between the two companies.