infoUSA recently refinanced its existing $250 million senior credit facility, cutting rates and increasing its borrowing size, said Stormy Dean, cfo of the direct mail company. Of the $250 million, about $121 million was currently outstanding. "It gives us a chance to use the revolver to pay down debt and it gives us a lot of flexibility to do anything we need to do to run our business," he said.
The company last did a refinancing in 2004 (LMW, 3/8/04). Dean explained the company had pondered refinancing a few months ago, but decided not to because of infoUSA's efforts to go private last summer. He said that by the time the first quarter of 2006 came around, infoUSA was able to get favorable rates.
In June, Vin Gupta, the chairman and ceo who holds about 38% of the common shares of infoUSA, made an offer to acquire all of the outstanding publicly held common shares. Vin Gupta & Co. made an initial offer of $11.75 in cash per share, a 25% premium to the previous day's closing price. In July, the Board of Directors hired Lazard as its financial advisor and Fried, Frank, Harris, Shriver & Jacobson as its legal advisor. At the end of August, the special committee of the Board of Directors said it would not go forward with the proposal but would explore other alternatives. Gupta then withdrew his offer.
The refinanced deal now consists of a $100 million term loan and a $175 million revolver. Dean would not comment on specific pricing other than to say it was trimmed by 25 basis points. He said the important point is that the company took the leverage ratio of debt to EBITDA to a lower level due to some debt pre-payments.
Wells Fargo was the lead arranger, with LaSalle Bank, Citigroup and Bank of America also taking on agent roles. "We went with the banking group we were very familiar with," Dean said. "Wells Fargo is a good partner for a long time. They led syndication and were able to put together a group of banks for both the term loan and revolver." Wells Fargo led the company's 2004 refinancing, while Bank of America led a 2003 restructuring in order to redeem a portion of its 9 1/2% senior subordinated notes. At the time, Dean explained the company wanted to take back its bonds to save on interest costs (6/15/03). He said the company has also worked with LaSalle from time to time, but thought Citigroup might be a first time participant.