Merrill Lynch and J.P. Morgan are preparing to launch syndication of the long-awaited bank facility backing Code Hennessy & Simmons' $275 million buyout of Otis Spunkmeyer. The $140 million bank piece, which launches on Wednesday, is split between a $120 million "B" term loan and a $20 million revolver. Tenor on the revolver is six years and six-and-a half years on the "B" piece. Pricing and ratings could not be ascertained by press time. Officials at the banks declined to comment.
EBITDA for the San Leandro, Calif., cookie maker is approximately $35 million, which means senior secured leverage is about 3.4 times, one banker noted. Code Hennessy is putting $128 million of equity into the deal, and there also will be a $40 million private placement of senior subordinated debt.