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NEW YORK, May 10 (Reuters) - The take private of customer contact and conferencing services provider West Corp by Apollo Global Management, announced on May 9, will be financed with a US$2.7bn term loan B and a US$1.4bn bridge to unsecured bonds, sources said.
Credit Suisse will lead the loan, while RBC is expected to arrange the bridge loan and bonds, one of the sources said. The syndicate includes Bank of America Merrill Lynch, Barclays, Citigroup, Deutsche Bank, Morgan Stanley and Goldman Sachs, according to a press release.
The bridge loan is expected to launch in June, with syndication of the permanent financing post Labor Day, the source added. Caisse de dépôt et placement du Québec and PSP Investments Credit USA LLC have committed to a portion of the bridge, said the source.
The deal values the company at US$5.1bn, including net debt, implying Apollo will contribute around US$1bn of equity, for roughly 20% of capitalization.
West Corp on Tuesday reported a 0.7% drop in adjusted Ebitda for the first quarter, and a 0.3% uptick in revenue. Based on last 12 months’ adjusted Ebitda of US$663m, leverage pro forma the new debt stands at 4.1 times on a secured basis and 6.2 times total. That compares to 3.3 times and 4.8 times currently, based on roughly US$2.2bn of secured debt and US$3.2bn of total debt, regulatory filings show.
The company’s stock is trading lower by 4.16% at midday Wednesday at US$23.10, for a market capitalization of US$2.04bn, versus a per share price of US$23.5 under the purchase agreement. The transaction is expected to close in the second half of this year.
West Corp is rated BB- by Standard & Poor’s and B1 by Moody’s.
Credit Suisse and RBC declined to comment. Apollo and the company did not respond to inquiries. (Reporting by Andrew Berlin; Editing By Lynn Adler and Jon Methven)