Goldman Sachs, Credit Suisse, Barclays, and Deutsche Bank have postponed until September syndication of their financing backing the merger of Bioplan and Arcade Marketing due to market conditions, sources said. The transaction requires regulatory approvals and wasn’t expected to close until mid-to-late-September, sources noted.
Amid difficult market conditions arrangers earlier attempted to jump-start the deal, boosting first-lien pricing to L+450, with a 1% LIBOR floor, offered at 98.5, and increasing talk on the second-lien term loan to L+800, with a 1% floor, at 98.
The covenant-lite deal will comprise a $375 million, seven-year first-lien term loan with six months of 101 soft call protection; a $145 million, eight-year second-lien term loan with 102, 101 call protection; and a $65 million five-year revolver. The first-lien loan was talked earlier at L+400-425, with a 1% floor, at 99, while talk on the second-lien loan was previously at L+750-775, with a 1% floor, at 99. The deal would have included a ticking fee that kicks in at half the spread for days 31-60, rising to the full spread on day 61. Goldman is left lead on the first-lien facilities, while Credit Suisse is left lead on the second-lien term loan.
The issuer is rated B/B3. The first-lien debt is rated B+/B2, with a 2 recovery rating. The second-lien debt is rated B-/Caa2, with a 5 recovery rating.
Ileos, which is owned by Oaktree, and KKR-controlled Visant earlier this month agreed to combine the units into a new business providing sampling products and services for the beauty, fragrance and personal-care segments, sources said.
Oaktree will hold a 75% stake in the venture, while KKR and DLJ Merchant Banking will hold the remaining 25% ownership interest.
The new venture is expected to generate annual revenue of approximately $450 million on a combined basis, according to Ileos. The combined venture would generate roughly $88 million of annual EBITDA, sources added. The transaction is expected to close by the beginning of the fourth quarter of 2014.
The Bioplan subsidiary of Ileos specializes in unit-dose sampling and promotional turnkey products, providing vials, sprays, sachets, tubes and thermoform units for care, perfume, and makeup. Arcade Marketing is a global provider of sampling products for the fragrance, cosmetics, and skincare segments. – Chris Donnelly