Credit Suisse, Bank of America and UBS launched syndication of a seven-year, $335 million credit facility for Apollo Management's buyout of Jacuzzi Brands' bath products business. The deal comprises a covenant-lite, $135 million first-lien "B" term loan, a $15 million synthetic letter of credit and a $185 million second-lien term loan. Pricing on the tranches could not be determined. Commitments are due Friday.
"The name's been around for awhile, people have owned it and it hasn't improved in terms of its performance," said one portfolio manager. The company announced in October the private equity firm would acquire the manufacturer and distributor of bath and plumbing products for approximately $1.25 billion, including the assumption of about $260 million in outstanding debt. In connection with the transaction, Jacuzzi has commenced a cash tender offer for all of its outstanding 9.625% senior secured notes due 2010. After the acquisition, the company's name will be Jacuzzi Corp.
Standard & Poor's rated the proposed first lien B with a 3 recovery rating and a CCC+ and 5 recovery rating to the second lien. Pro forma debt to EBITDA leverage will be about 4.7 times. West Palm Beach, Fla.-based Jacuzzi tapped Fleet Capital and CS in 2003 for a $265 million credit facility consisting of an $200 million asset-based revolver and a $65 million second-lien "B" term loan (LMW, 7/27/2003). The revolver was priced at LIBOR plus 2 1/4% and the term loan was priced at LIBOR plus 5%. Calls to Jeffrey Park, cfo, were referred to a spokeswoman who declined comment.