Barclays Talks Price on $370M Acco TL
Proceeds will go towards its acquisition of MeadWestvaco assets
February 3, 2012
Barclays Capital has established price talk on a $370 million term loan B Acco Brands is seeking in conjunction with its merger with MeadWestvaco Corp.
The maker of swing-line staplers is seeking an interest rate of Libor plus 375 bps at a price of 99 cents on the dollar, according to KDP Advisor. Lender commitments are due Feb. 16. The term loan B is part of a proposed $920 million facility that also includes a $250 million revolver and a $300 million term loan A.
On Nov. 17, Acco said it was acquiring the office products business of WestMeadvaco in a deal valued at $860 million. As part of the deal, Acco will pay roughly $460 million to WestMeadvaco shareholders.
Standard & Poor’s has assigned the proposed senior secured credit facility a preliminary BB+ rating, three notches above Acco’s current corporate credit rating of B+. Following the closing of the merger, S&P anticipates upgrading Acco’s corporate credit rating to BB-.
“We expect Acco will use net proceeds from the proposed credit facility, along with their planned issuance of common equity and $270 million of bridge financing, to fund a dividend to MeadWestco, refinance the existing senior secured notes, and pay fees and expenses,” S&P said in its presale report. “MeadWestvaco shareholders will retain 50.5% of Acco’s outstanding shares.”
Pro forma for the transaction, the ratings agency estimates that the company will have about $1.2 billion of reported debt outstanding
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