August 30, 2017 / 3:43 PM / a month ago

LPC: ECi pre-markets debt package backing LBO, merger with Exact

NEW YORK, Aug 30 (Reuters) - Bank of America Merrill Lynch and RBC Capital Markets are sounding out investors on a US$570 million financing package that will back the buyout of ECi, a US enterprise resource planning (ERP) software provider, and its merger with Dutch ERP company Exact Software, according to four sources familiar with the situation.

The financing for the transaction will comprise a US$50m revolver and a US$380m term loan B led by BAML, and a US$140m second-lien term loan led by RBC, two of the sources said. The revolver will be undrawn at close.

Syndication of the debt will begin after Labor Day.

BAML and RBC declined to comment.

Private equity firm Apax Partners on August 14 said it would acquire ECi and combine it with three units of Exact, which it has owned since 2015.

Fort Worth, Texas-based ECi makes cloud-based software and services for small- and medium-sized businesses (SMB) in the distribution, field services, building and construction and manufacturing industries. In conjunction with the buyout, Apax will merge ECi with Exact’s Macola, JobBOSS and MAX segments, which are based in the US and also service SMB manufacturers.

The deal will be marketed off of US$80.8m of pro forma last 12 months’ earnings before interest, tax, depreciation and amortization, including US$12m of synergies. Based on that figure, leverage will stand at 4.7 times through the first lien and 6.4 times total.

Capitalization of the combined company will feature US$363m of equity, including US$59m that will be rolled over from current ECi sponsor The Carlyle Group.

Carlyle did not respond to requests for comment. A spokesperson for Apax declined to comment.

The transactions are expected to close in the third quarter. (Reporting by Andrew Berlin; Editing By Michelle Sierra and Jon Methven)

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