April 18, 2019 / 12:14 PM / 4 months ago

REFILE-RPC set to launch jumbo buyout financing

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By Prudence Ho

LONDON, April 18 (LPC) - British packaging company RPC Group is set to launch a jumbo leveraged loan financing to back its £3.34bn acquisition by US-based Berry Global Group Inc , banking sources said.

Goldman Sachs and Wells Fargo Bank are leading the financing, which is set to launch for general syndication to European and US investors in late April, the sources said.

Berry was not immediately available to comment.

The acquisition was announced in March for a total purchase price of US$6.5bn, comprising US$4.4bn for the cash offer, US$0.3bn of transaction expenses and US$1.8bn of assumed average net debt.

The total size of the financing will be lower than the US$5.95bn-equivalent of loans that was announced in March as the company does not need to refinance as much of RPC’s debt as initially expected, the sources said.

The jumbo deal will give a boost to Europe’s leveraged loan market, which recorded a decade low in volume during the first quarter amid concerns over the US-China trade war and Brexit.

It will also be a test for investors’ international appetite as the UK is RPC’s largest single market.

RPC, which makes Heinz tomato ketchup bottles and packaging for Nivea sun cream, operates in 33 countries, with the UK accounting for about 24% of revenue.

Berry last month said it secured a financing to back the acquisition comprising a €2.5bn term loan and a £400m term loan paying margins of 325bp over Euribor and 425bp over Libor, respectively.

The financing also included a one-year €1.5bn and £300m first lien bridge loan paying initial margins of 325bp over Euribor and 400bp over Libor, and a one-year US$1.275bn second lien bridge loan paying an initial margin of 375bp over Libor. Pricing on the bridge loans included a 50bp increase every three months after closing.

In addition, Berry lined up US$3.552bn of loans to backstop existing term loans.

Berry Global is rated BB+ by S&P and Ba3 by Moody’s.

RPC posted a 36% growth in revenue last year as of March 2018 and a 34% increase in adjusted Ebitda to £590.3m.

Editing by Claire Ruckin

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