Mediaocean pulls dividend recap loan after lenders balk at portability request

Mediaocean has scrapped efforts to raise a new term loan that would have enabled its owner, Vista Equity Partners, to recoup its investment in the company, according to five sources familiar with the situation.

The USD 693m offering, which was talked at Libor+ 375bps with a 99 OID, included portability language, the sources said. An orderbook had formed at wider pricing but lenders were asking for the portability clause to be removed–one factor that led the issuer to scrap the deal, two of the sources added.

Proceeds from the Macquarie-led, best-efforts deal were slated to pay out a USD 400m dividend to Vista and pay down a portion of Mediaocean’s term loan due 2022.

Vista began exploring a sale process last year, after acquiring Mediaocean in 2015. The acquisition valued the company at roughly USD 720m.

The dividend would have allowed Vista to fully recoup its equity investment, while the portability clause would have ensured added flexibility should the company pursue an IPO or strategic alternatives, one of the sources noted.

The company marketed the deal off 5.25x of pro forma leverage, two sources said. Excluding several adjustments, one of the sources placed pro forma leverage closer to 7x.

Mediaocean’s USD 370m L+425bps TLB due 2022 is quoted at 100/100.75, according to Markit.

Macquarie declined to comment. Mediaocean did not respond to a request for comment.

2019 Debtwire

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