UBS Warburg is preparing to lead a debt financing package backing the $300 million acquisition of Nellson Neutraceutical by a partnership between Fremont Partners and existing management. The San Francisco-based sponsor is putting approximately $180 million of equity into the deal, and the leverage will consist entirely of bank financing, according to one banker. The financing is likely to be structured as a $120-130 million institutional term loan complemented by a $10-15 million revolver, but details have not yet been finalized. An official at Fremont and a UBS banker declined to comment.
Fremont and the management team are buying the Irwindale, Calif., nutrition bar manufacturer from Artal Luxembourg, a European private equity shop. Last year, Nellson's EBITDA came in at more than $40 million, therefore the financing should create total leverage of about three times. It is anticipated that the deal, which will launch in mid-September, will carry a single-B rating, another banker noted.