A bank meeting is scheduled for Jan. 10 to syndicate the $1.2 billion credit backing battery maker Rayovac Corp.'s $1.3 billion acquisition of pet and garden-products company United Industries Corp. Bank of America is the lead arranger on the credit. "We have a very long relationship with B of A on the debt side and we've used them consistently throughout our history as a public company," said Nancy O'Donnell, v.p. investor relations of Rayovac. Citigroup and Merrill Lynch are co-arrangers. "We've been very active on the acquisition front and have done a number of transactions and financings and they've been good partners to us over that period of time," she added.
The new credit comprises a $300 million revolver, a $740 million "B" loan, a $140 million euro-denominated "B" loan and a $50 million Canadian dollar-denominated "B" loan. A meeting will be held in London on Jan. 12 to launch the euro-denominated portion of the facility. The revolver matures in six years while the term loans are due in seven. O'Donnell said the new pricing has not been negotiated but the company "hopes to have better rates than on the current Rayovac facility as well the United facility," though she declined to disclose Rayovac's current spread.
The new facility will refinance both United's and Rayovac's existing debt. As of Sept. 30, United had a $508 million "B" loan, a $53 million Canadian dollar-denominated "B" loan, a $75 million second-lien "C" loan and $10-15 million drawn on its $130 million revolver, according to Dan Johnston, United's cfo. B of A led United's old facility as well. The revolver is priced on a grid from LIBOR plus 1 3/4-2 1/2%, while the "B" loan carries a spread of LIBOR plus 2 1/2% and the "C" is at LIBOR plus 4 1/2%. Rayovac currently has a $120 million revolver, a E40 million revolver, a $257 million "C" loan and a E114 million "C" loan. In addition to the new bank debt, the company is issuing $500 million in new bonds which it expects to price in the 7% range, O'Donnell said.