Sturm Foods is back in the market with a dividend recap for sponsor HM Capital. The $540 million financing launched at a bank meeting last Thursday. It will pay a dividend to HM, which bought the company from Mason Wells in 2005 (LMW, 4/29/2005). The size of the dividend could not be determined.
The Deutsche Bank-led financing consists of a $320 million revolver, a $350 million term loan and a $170 million second lien. Pricing is LIBOR plus 2 3/4% on the revolver and term loan, and LIBOR plus 6 1/4% on the second lien. It has all traditional maintenance covenants.
It refinanced and brought an amendment in May that took pricing down 25 basis points to LIBOR plus 2 3/4% on a $20 million revolver. A $200 million term loan, priced at LIBOR plus 2 1/2%, was expected to be used to pay off an existing $65 million first lien and an existing $134 million second lien (CIN, 5/19). The term loan broke for trading at 100 1/4 (6/9).
Since its 2005 leveraged buyout, EBITDA has increased from $48.8 million to a run rate of $87.6 million, pro forma the new transaction. As of Dec. 31, EBITDA was $70 million. Based in Manawa, Wis., Sturm manufactures various products for the food industry, including hot cereals and sugar free drink mix sticks. A call to Peter Brodsky, an HM partner and a director on Sturm's board, was not returned. A spokeswoman could not comment by press time. A Sturm spokesman was traveling and could not immediately be reached.