J.P. Morgan is leading the financing backing FedEx Corp.'s $2.4 billion acquisition of Kinko's from Clayton, Dubilier & Rice (CD&R). The acquisition has iced a plan to pay a dividend to CD&R. Bank of America and J.P. Morgan were leading an $825 million facility to finance the dividend. FedEx approached CD&R about Kinko's and the transaction materialized relatively quickly, a CD&R spokesman said. "At any given moment, CD&R would be pursuing multiple tracks with respect to its portfolio companies and obviously on balance the sale of the business to FedEx was determined to be the better course," he added.
FedEx will pay $700-800 million in cash and the remainder using commercial paper, from its own $1 billion credit facility and a $2 billion commitment from J.P. Morgan, said Alan Graf, FedEx's cfo, on a conference call. The transaction is expected to close in the first quarter of 2004. A FedEx spokesman said the firm has had a relationship with Kinko's since 1988.