UBS Warburg closed the book on commitments last week for the financing package backing the $300 million acquisition of Nellson Nutraceutical by Fremont Partners and existing management. Some investors had been waiting for the rating agency write-ups, which emerged last Wednesday. "There is a relatively conservative capital structure, below three times leverage, and the "B" is attractively priced for the risk," one investor said. He believes the deal will not be flexed downward due to the small size of the tranche. An official at Fremont and a UBS banker declined to comment.
Fremont and Nellson management are acquiring the Irwindale, Calif., nutrition bar and product maker from Artal Luxembourg, a European private equity shop. The bank-financed portion of the transaction consists of a $15 million revolver and a $130 million "B" term loan priced at LIBOR plus 4 1/4%. This will be combined with approximately $180 million of equity to finance the transaction. "People like the business, the sponsor and the capital structure," one banker said, referring to the credit's strengths. "It's a strong cash-flow business."