Lehman Brothers, Deutsche Bank, Bank of America and Wachovia Securities have teamed up to launch $2.35 billion in debt financing for West Corp., according to a banker. Syndication is expected to launch at a bank meeting tomorrow.
The senior secured credit facility will consist of a six-year, $250 million revolver and a seven-year, $2.1 billion term loan. Pricing could not be determined.
The financing will be used by the newly formed Omaha Acquisition Corp., owned by private equity firms Thomas H. Lee Partners and Quadrangle Group, to acquire West for approximately $4.1 billion. The merger, announced in May, will pay most of the West shareholders $48.75 per share in cash. Gary and Mary West, directors and majority shareholders holding 56% of the company, will receive $42.83 per share in an attempt to increase the amount shareholders will receive. A spokesman for West said the company was hoping to close the recapitalization soon after the Oct. 23 shareholder meeting, but declined further comment on the actual debt facility, referring questions to filings with the Securities and Exchange Commission.
The remainder of the acquisition will be funded by $650 million of senior unsecured notes, $450 million of senior subordinated notes, $720 million of cash equity contributed by the sponsors and $285 million of rollover equity. Leverage is roughly 6.25 times total and 4 times on the bank debt. Moody's Investors Service rated the new senior credit facility Ba3 and rated the notes Caa1.
West tapped the market back in April for an $800 million revolving credit facility and cheaper pricing to finance two acquisitions Raindance Communications and Intrado. The deal was led by Wachovia, B of A, Wells Fargo, US Bank, Scotia Capital and JPMorgan (CIN, 4/28).
West Corp. is a provider of outsourced communications solutions. Spokesmen for Thomas H. Lee and Quadrangle declined comment.