The International Mutlifoods deal set to be launched by early this month has lenders champing at the bit, eager to get at a deal most consider strong relative to what is out there. One banker looking at the deal noted that lead lenders UBS Warburg and CIBC World Markets could cut pricing and the credit would still probably blow out. The banks will hold a bank meeting to launch syndication of the $450 million deal for the Minnetonka, Minn.-based food company. John Byom, cfo, did not return calls.
The loan comprises a $100 million revolver, a five-year $150 million term loan "A," and a six-and-a-half-year, $200 million term loan "B." Pricing on the deal will reportedly open at LIBOR plus 3% for the pro rata and LIBOR plus 3 3/4% for the term loan "B." The banker looking at the deal said the market would have responded positively to the Ba3 deal if it were priced 25 basis points lower, as lenders on the "B" term piece are hungry for strong industrial credits.
According to bankers, the credit will back the company's purchase of The Pillsbury Inc.'s food services business. International Multifoods, Inc. is the largest U.S. distributor of food products to vending machine companies, independent restaurants, and movie theaters. In addition, the company produces baking mixes, frozen batters, and doughs for food service baking operations.