The $360 million "B" loan backing the acquisition of TransDigm Holding Company by members of senior management and an affiliate of private equity firm Warburg Pincus was nearing oversubscription late last week. Credit Suisse First Boston and Bank of America are leading the $440 million deal that was pitched to investors last Tuesday. The seven-year "B" loan is priced at LIBOR plus 33/4%, while the credit's six-year, $80 million revolver is priced at LIBOR plus 31/2% and includes a 50 basis point up-front fee. GE Capital and UBS Warburg have also signed onto the facility as co-documentation agents, a banker said. There is a $300 million notes deal tied to the transaction.
Warburg is buying the Richmond Heights, Ohio-based aerospace component manufacturer from Odyssey Investment Partners, which has owned TransDigm since 1998 (LMW, 6/16). B of A and GE officials declined to comment, while CSFB and UBS bankers did not return calls before press time.
The $1.17 billion acquisition is expected to increase TransDigm's debt by 73%, from $401 million to $695 million, according to Moody's Investors Service, which rated the new deal at B1. This represents a leverage increase from about 3.4 times pro forma lagging 12 month EBITDA to about 5.5 times. Moody's does expect TransDigm will be able to quickly reduce its debt levels to below five times by 2004 as the company continues to generate cash flows that are adequate for debt repayment. CSFB managed the auction for TransDigm. A spokeswoman from TransDigm did not return calls.