Bank of America will bring to market a $470 million loan backing the buyout of Michael Foods, according to a banker familiar with the financing. The buyout will be led by Vestar Capital Partners and Goldner Hawn Johnson & Morrison, and includes Michael Foods management and the Michael family. Michael Foods is a Minneapolis-based diversified food processor and distributor. Officials at Vestar and Goldner did not return calls. John Reedy, cfo, and Mark Witmer, assistant treasurer, did not return calls seeking comment. B of A will seek managing agents in early February. Rabobank will also have a titled role in the deal, according to a lender familiar with the matter. He declined further comment. Commitment sizes and fees have not been finalized, according to the banker familiar with the deal. The loan will be rated after a $200 million bond issue, which will be completed during the first quarter. The bond offering will take out a $200 million bridge loan that B of A has also underwritten. Pricing and other underwriters could not be ascertained before press time.
The credit is structured as a $100 million, six-year revolver, a $125 million, six-year term loan "A" and a $245 million, seven-year term loan "B." Pro rata pricing is set at 3% over LIBOR, with the "B" tranche at 31/2% over LIBOR.