Credit Suisse and Citigroup last Tuesday launched syndication of a $875 million credit backing the leveraged buyout of BPC Holding Corp., parent company of Berry Plastics. The deal consists of a six-year, $200 million revolver and a seven-year, $675 million term loan "B." Pricing is LIBOR plus 2% on both tranches.
Apollo Management and Graham Partners are acquiring the company from Goldman Sachs Capital Partners and JPMorgan Partners for approximately $2.25 billion.
Standard & Poor's downgraded the company's ratings from developing to negative and kept it on CreditWatch, where it has remained since April 4, according to an S&P release. The ratings were based on the company's announcement it has commenced a cash tender offer for all of its outstanding $335 million of 10.75% senior subordinated notes due 2012. After the acquisition, Berry's total debt leverage will be seven times.
Graham Packaging was originally thought to be bidding on Berry's buyout, which one trader said the market viewed negatively because it would have added a lot of leverage to the company. When Graham Packaging announced it would not bid on Berry, its bonds and bank debt traded up (CIN, 7/7). The potential Graham Packaging bid and the bid by Graham Partners are not related.
Berry last tapped the market in 2005 for a five-year, $465 million first-lien term loan add-on and increased its revolver to $150 million. The financing, led by Goldman Sachs and JPMorgan, was used for Berry's acquisition of Kerr Group. Price talk was LIBOR plus 2 1/4% at launch (LMW, 5/20/2005).
Calls to Jim Kratochvil, Berry Plastics cfo, were not returned. Calls to a representative at Graham Partners were not returned. A representative from Apollo Management could not be reached.