UBS wrapped up a $175 million asset-based credit for Broder Bros. last week, said Howard Morof, cfo. The credit backs the sportswear distributor's acquisition of Alpha Shirt Company for $232 million from Linsalata Capital Partners, a Cleveland-based private equity firm (LMW, 7/28). Earlier this month, Broder Bros., which is majority owned by Boston-based private equity firm Bain Capital, also sold $175 million of seven-year, 111/4% notes to further finance the acquisition. Bain put about $76 million into the transaction, said Yoo Jin Kim, a principal at Bain.
Pricing on the revolver, which was oversubscribed, is LIBOR plus 21/2%, with an undrawn fee of 50 basis points. In addition to backing the acquisition, the credit also served to refinance $75.4 million of Broder's existing debt, to finance Alpha's seasonal working capital needs and to pay about $22 million in transaction fees and expenses, Kim confirmed. Pro forma leverage was expected to be about 4.2 times for fiscal 2003, Moody's Investors Service states. UBS officials declined comment.
Kim said UBS was selected to lead because the bank holds one of Bain's core banking relationships. UBS was able to offer the ABL-bond deal combo, whereas some ABL providers cannot, a banker added, pointing to another possible reason for the selection of UBS as lead. UBS also led the ABL deal for International Steel Group earlier this year with Goldman Sachs and CIT Group (4/7), the banker noted.
CIT is a collateral agent on the new facility, while Bank One is a syndication agent, Morof and Kim confirmed. Bank One led the Plymouth, Mich.-based imprintable sportswear retailer's previous asset-based revolver for $137.5 million. Other lenders on the new deal include Fleet Capital, GE Capital, Standard Federal Bank, Comerica Bank, Fifth Third Bank and National City Bank.