Deutsche Bank and Jefferies launched syndication of a $215 million deal for Packaging Dynamics Corp. last Wednesday to back its $268 million acquisition by Thilmany, a wholly owned subsidiary of Kohlberg & Co. The financing consists of a $125 million asset-based loan and a $90 million term loan. Price talk on the term loan is LIBOR plus 2 1/4%-2 1/2% and LIBOR plus 1 1/2% on the ABL.
Standard & Poor's affirmed its B+ corporate rating of Thilmany and removed it from CreditWatch, where it was placed with negative implications on Feb. 28 following the announcement it would acquire Packaging Dynamics, which is unrated. S&P assigned a BB- senior secured rating to the term loan and a B- rating to the proposed $150 million senior subordinated notes offering to be issued by Packaging Dynamics Finance Corp., a subsidiary. Moody's Investors Service assigned a Ba3 rating to the term loan. The transaction is expected to close this quarter and when it does, Thilmany will be renamed Packaging Dynamics Corp.
According to a company release, the combined businesses will have annual sales of about $750 million. It will operate as three business units: BagcraftPapercon, a converter of food packaging products, including specialty bag, wrap and sheeted products; Thilmany Packaging/International Converter, a producer of extrusion and adhesive laminated structures for retail, consumer and industrial packaging applications; and Thilmany Papers, a manufacturer of specialty lightweight paper for packaging pressure sensitive and technical applications. Calls to Patrick Chambliss, cfo, v.p. and secretary, were not returned. A call to a Kohlberg spokesman was not returned.