Goldman Sachs and JPMorgan are in the market with a new $465 million first-lien term loan for Berry Plastics Corp., an add-on to its existing facility. The deal supports the company's acquisition of Kerr Group. Maturity is expected to be five-and-a-half years and price talk is LIBOR plus 2 1/4%. In addition to the new term loan, a revolver is also being increased to $150 million. Berry will pay $445 million for the company including repayment of existing debt. The acquisition is scheduled to close in the second quarter. Berry also just took over all of the injection molding closure assets from Euromex Plastics, a Mexican injection molding manufacturer in April.
Based in Evansville, Ind., Berry manufacturers injection-molded and thermoformed plastic open-top containers, closures, drink cups and housewares. Goldman Sachs Capital Partners controls about 60% of BPC Holding, while JPMorgan Partners controls about 30%. The groups acquired Berry in July 2002.
In 2004 Berry put in place a $100 million revolver that is set to expire in 2008 and a $365.52 million term loan set to expire in 2010. Pricing on both tranches launched at LIBOR plus 2 3/4%.
Moody's Investors Service said the attractiveness of "Kerr's intellectual property, research and development capabilities and regulatory process approvals for healthcare packaging are reflected in the seemingly rich purchase price estimated to be over seven times the target's EBITDA." The company also affirmed Berry's ratings and assigned a B1 rating to the add-on. Calls to Jim Kratochvil, Berry, executive v.p., president, cfo, treasurer and secretary were not returned, nor were calls to David Lorsch, a principal at Fremont Partners, the private equity fund that controls Kerr. Bank officials declined to comment.