J.P. Morgan has launched syndication of a $100 million add-on "B" piece for Church & Dwight Co. in order to help back the Arm & Hammer brand owner's purchase of the toothpaste brands from Unilever. The add-on is priced at LIBOR plus 21/4%, according to market players. The new debt will tack on to Church & Dwight's $510 million credit that was completed in 2001 to in part support past acquisitions of USA Detergents and Carter-Wallace's anti-perspirant and pet care businesses.
The existing credit includes a $100 million revolver and a $125 million "A" loan, priced at LIBOR plus 2%. There is also a $285 million "B" loan priced at LIBOR plus 21/2%. The company announced in its most recent 10-Q that the "A" loan was paid off in full during the second quarter of 2003. Scotia Capital, FleetBoston Financial, National City Bank and PNC Bank are all agents on the credit. An investor said J.P. Morgan is going out to existing lenders with the add-on. A J.P. Morgan spokesman declined to comment.
Church & Dwight will pay $104 million in cash for the Unilever business, plus additional cash performance-based payments of between $5 million and $12 million. The company's leverage at June 27 was approximately 2.13 times and interest coverage was 6.74 times. Zvi Eiref, v.p. finance and cfo, did not return calls before press time.