J.P. Morgan, UBS Warburg and Goldman Sachs are tentatively setting aside Friday as the launch date for syndication of a $325 million credit facility backing the $620 million leveraged buyout of the waterworks distribution business of United States Filter by Thomas H. Lee Partners and J.P. Morgan Partners. The bank financing consists of a $75 million revolver priced at LIBOR plus 3% and a $250 million "B" term loan with a spread of 31Ž 2% over LIBOR. The buyout also will be financed with $200 million in subordinated notes, according to a banker familiar with the transaction. Officials at the banks either declined to comment or did not return calls.
The sale of the waterworks distribution business is part of U.S. Filter's strategy to divest non-core assets and focus on its wastewater equipment and services businesses and consumer and commercial businesses, according to a spokesman for U.S. Filter. The waterworks unit supplies pipes, hydrants, valves and equipment for municipal water systems and sewage-treatment plants. The private equity firms reportedly are pumping a total of $210-225 million in equity into the deal, which is expected to close in the fourth quarter.