Credit Suisse First Boston and UBS are in the market with a $323 million financing package backing Wasserstein & Co.'s PBI Media Holdings acquisition of PRIMEDIA's business information segment. The deal will be done through Wasserstein & Co.'s U.S. Equity Partners II, LP investment partnership. The deal consists of a six-year, $60 million revolver; a seven-year, $185 million "B" term loan, and an eight-year, $78 million second lien. Pricing on the revolver and term loan "B" is LIBOR plus 2 1/2% and pricing on the second lien is LIBOR plus 6 1/2%. Bank commitments are due Sept. 27.
The business information segment consists of business-to-business target publications and Web sites, featuring 70 publications and more than 100 Web sites. In 2004 the group generated $224.8 million in revenue. CSFB acted as advisor to PRIMEDIA in the transaction and Jones Day provided legal representation to Wasserstein & Co., according to filings with the Securities and Exchange Commission.
Moody's Investors Service assigned a B2 rating to the revolver and term loan "B," and a B3 rating to the second lien. Moody's writes that the ratings reflect PBI's high financial leverage, a vulnerability in business to business advertising and the high amount of competition. It also considers the difficulties of operating the company as a standalone from its parent, PRIMEDIA. Calls to Wasserstein & Co. and PRIMEDIA were not returned. Bankers at CSFB declined comment, calls to UBS were not returned.