Goldman Sachs, JPMorgan and Morgan Stanley at a bank meeting last Thursday launched syndication of a $635 million credit backing Silver Lake Partners' acquisition of IPC Information Systems from Goldman Sachs Capital Partners. The deal consists of a six-year, $50 million senior secured first-lien revolver; a seven-year, $415 million senior secured first-lien term loan and an eight-year, $170 million senior secured second-lien term loan, according to market sources. Pricing is LIBOR plus 2 1/2% on the first lien and LIBOR plus 6 1/2% on the second lien.
The $800 million takeover is expected to close by the end of the year, according to the spokeswoman. The credit will also be used to refinance $423 million in existing debt. Moody's Investors Service assigned a Ba3 rating to the first lien and a Caa1 rating to the second.
Pro forma for the acquisition, Moody's estimates debt to EBITDA leverage will be nearly 6.9 times. Standard & Poor's took IPC off of CreditWatch, where it was placed on Aug. 2 following the announcement of the acquisition. The ratings agency assigned a B+ rating and a recovery rating of 2 to the first lien and a B- with a recovery rating of 5 to the second lien.
IPC last tapped the market in 2005 for a $485 million deal led by Goldman Sachs, GE Capital and Lehman Brothers. That deal consisted of a $285 million term loan, a $50 million revolver and a $150 million second lien. The first lien was initially priced at LIBOR plus 2 3/4% and the second lien was initially priced at LIBOR plus 7 1/4% (CIN, 7/15/05).
New York-based IPC is a provider of communications systems and services to financial services firms, government, power, energy and utility, and transportation organizations. Calls to a spokesman at Silver Lake Partners were referred to IPC. GS Capital Partners declined comment. An IPC spokeswoman declined comment.