J.W. Childs Equity Partners has tapped UBS Warburg to lead a $130 million credit backing the $165 million purchase of the Meow Mix and Alley Cat brands from Ralston Purina. A bank meeting has been set for Jan. 16. A banker said UBS' previous involvement with Childs in the petcare arena -- the Hartz Mountain deal earlier this year -- was a strong factor in the bank leading the credit. Officials at Childs said the firm does not comment to the press.
Market sources said UBS is looking at LIBOR plus 3% for pricing on the deal, which will be split between a $30 million revolver and a $100 million term loan. Bells and whistles have yet to be finalized, said the banker. On a total basis, leverage is 1.7 times and ratings are due out soon, with expectations of mid-to-high four Bs from the putting agencies. To strengthen the deal, Childs is 40% equity in.
The Federal Trade Commission agreed last month to drop antitrust objections to Nestlé's $10.3 billion acquisition of Ralston Purina, after the agreement to divest the brands to Childs. Nestlé, as part of the agreement will produce Meow Mix and Alley Cat for up to two years, and license to Childs the patents required to produce the cat food. Without the divestiture, Nestlé would have controlled 45% of the market.