Lehman Brothers allocated the $150 million "B" loan for B&G Foods last week after flexing pricing down by 25 basis points to LIBOR plus 31/4%, said a banker. The credit was three times oversubscribed, he said. The $200 million credit backs B&G's acquisition of Nestlé Prepared Food Co.'s Ortega brand acquisition for $116 million. The credit also includes a $50 million, five-year revolver that was expected to be drawn for $11 million to pay for the acquisition (LMW, 8/25). The revolver includes a $5 million sub limit for letters of credit. FleetBoston Financial, Bank of New York and CIT Group are all agents on the deal. A Lehman official declined to comment.
Parsippany, N.J.-based B&G had also issued $220 million in 95/8% senior subordinated notes due 2007 to fund the acquisition. Lehman acted as B&G's financial adviser on the deal, while the transaction was sponsored by Bruckmann, Rosser, Sherrill & Co., a private equity firm that holds a majority interest in B&G.
B&G is a manufacturer and distributor of shelf-stable branded food products. Excluded from the Ortega sale is a line of cheese products, dipping cups and dispensing units that Nestlé will retain and sell under the Ortega brand through a transitional license. Robert Cantwell, B&G's executive v.p. of finance and cfo, was out of the office at press time and could not be reached.