Zayo is giving buyside accounts early looks at the USD 8.1bn financing for its LBO by EQT Infrastructure and Digital Colony, according to four sources familiar with the situation.
Bankers at Credit Suisse have been circulating a financing structure that includes a USD 4.2bn term loan and a EUR 800m term loan. The proposed structure also includes USD 1bn-equivalent of secured notes and USD 2.1bn of unsecured notes, two of the sources said. The loans are expected to launch next week, they added.
The communications infrastructure provider expects to achieve roughly USD 65m in cost savings going forward, two of the sources said. Including the savings, pro forma leverage is projected to total roughly 6x.
As of 30 September, the company’s leverage stands at 4.4x through USD 5.7bn of total debt and USD 1.28bn of LTM EBITDA, filings show.
On lender calls in support of the financing effort, the company disclosed that CEO Dan Caruso will stay on to run the post-LBO operations, two of the sources said.
As a part of the transaction, shareholders will receive USD 35 per share in cash. The deal is valued at USD 14.3bn, including the assumption of USD 5.9bn of Zayo’s debt.
Zayo’s USD 900m 6.375% senior unsecured notes due 2025 traded today at 102.25 today to yield 5.613%, down slightly from trades at 103 last week, according to MarketAxess.
The company’s stock last traded at USD 34.76 today for a market cap of USD 8.233bn, up 0.4% from yesterday’s close.
Zayo will report 2Q20 earnings on 4 February after market close.
Zayo and Credit Suisse did not respond to requests for comment.