Rackspace Hosting provided the breakdown of the $3.425 billion financing package that will back the buyout of the software company by Apollo Global Management. The financing commitment includes a term facility of up to $2 billion, a $225 million revolver, and an unsecured bridge loan of up to $1.2 billion, a regulatory filing shows.
Citigroup, Deutsche Bank, Barclays, Credit Suisse, and Royal Bank of Canada are leading the financing behind the $4.3 billion buyout. PSP Investments Credit USA also is providing a portion of the financing. The sponsor’s equity contribution will be up to $1.707 billion, according to the filing.
The purchase is expected to close in the fourth quarter, pending customary closing conditions.
Apollo last month announced that it was taking the NYSE-listed company private for $32 per share in cash. After closing, Searchlight Capital Partners will purchase an equity stake in the acquired company.
Rackspace’s existing debt includes a $500 million issue of 6.5% notes due 2024 that was placed in November of last year. Those notes traded at 109 this morning, compared to a 103 context before the news broke last month, trade data shows.
San Antonio, Texas–based Rackspace is buying the cloud computing company that generated revenue in 2015 of $2 billion. —Staff reports
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