UGS launches $225 million term B add-on and repricing amendment

By Sara Rosenberg

New York, Feb. 8 - UGS Corp. held a conference call to launch its $225 million term loan B add-on to existing lenders and to request a repricing amendment that would lower the interest rate on the entire term loan B tranche by 25 basis points, according to a market source.

JPMorgan and Citigroup are the lead banks on the deal, with JPMorgan acting as the left lead.

The company wants to upsize its term loan B to $725 million from $500 million and price the full amount at Libor plus 200 basis points, down from Libor plus 225 basis points, the source explained.

The company's existing revolving credit facility will basically remain unchanged, the source said.

Consents are due on Feb. 22, and 100% approval is needed for the amendment to pass.

"The company has performed well. It's being upsized so lenders are getting more paper, which is what they want. It's only a 25 basis point reduction. I think in this marketplace it will be fine," the source said.

Proceeds from the $225 million add-on will be used to fund the company's acquisition of Tecnomatix Technologies Ltd. for about $228 million in cash, or $17.00 a share. The transaction, which is subject to the receipt of required regulatory approvals, is expected to close by the end of the first quarter.

UGS is a Plano, Texas, provider of product lifecycle management software and services. Tecnomatix is a Herzliyya, Israel-based provider of manufacturing process management solutions for the automotive, electronics, aerospace and other manufacturing and processing industries.

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