Jostens gets required tenders for 12¾% notes, extends offer

New York, Sept. 2 - Jostens Inc. (B3/B-) said it received the required number of consents to proposed indenture changes from the holders of its 12¾% senior subordinated notes due 2010 as part of the tender offer and consent solicitation for those notes. The company also extended the expiration of the tender offer, rescheduled the pricing date, and said that all tendering holders would receive the total consideration to be paid for the notes.

Jostens said that as of the consent deadline, which expired as scheduled at 5 p.m. ET on Sept. 1, it had received tenders and consents for about 90% of the outstanding principal amount of the notes. Having received the required number of consents, it plans to execute a supplemental indenture incorporating the proposed changes, along with The Bank of New York, the indenture trustee. However, the amendments will not become operative until the notes are accepted for purchase by the company.

Jostens further said that it is extending the expiration of the offer to 5 p.m. ET on Sept. 24, subject to possible further extension, from the original deadline at 5 p.m. ET on Sept. 17, and said it will also pay the consent payment, as part of the total consideration for the notes, to all noteholders tendering their notes by that extended deadline. Consideration for the notes, which was originally to have been set at 10 a.m. ET on Sept. 2, will now be set at 10 a.m. ET on Sept. 10, subject to possible further extension.

As previously announced, Jostens, a Minneapolis-based provider of school-related affinity products such as yearbooks, class rings, diplomas and graduation caps and gowns, as well as school photography products and services in Canada, said on Aug. 19 that it had begun a cash tender offer for any and all of the $203.985 million outstanding principal amount of its 12¾% notes and was also soliciting noteholder consents to eliminate substantially all of the restrictive and reporting covenants, certain events of default and certain other provisions contained in the indenture governing the notes.

It set a consent deadline of 5 p.m. ET on Sept. 1 and initially said the tender offer would expire at 5 p.m. ET on Sept. 17, which was subsequently extended.

Jostens said it was undertaking the tender offer and consent solicitation in connection with the previously announced transactions with affiliates of Kohlberg Kravis Roberts & Co. and DLJ Merchant Banking Partners, including the recapitalization of Jostens Holding Corp., the parent of Jostens Inc.

The company said noteholders tendering their notes by the consent deadline would receive a consent payment of $20 per $1,000 principal amount of notes tendered and accepted for purchase as part of the total consideration to be paid for the notes, which was originally to have been determined at 10 a.m. ET on Sept. 2 (this was subsequently extended). The total consideration will be based on the present value of the notes as of the payment date, calculated in accordance with standard market practice, assuming each $1,000 principal amount of the notes would be paid at a price of $1,063.75 on May 1, 2005, discounted at a rate equal to 75 basis points over the yield on the 6½% U.S. Treasury note due May 15, 2005.

The company originally said holders tendering their notes after the consent deadline would not receive the consent payment as part of their consideration but subsequently dropped this provision. All tendering holders will also be paid accrued and unpaid interest, if any, up to but not including the payment date.

Jostens intends to fund the tender offer and consent payments with a portion of the proceeds from senior secured term loan and revolving credit facilities totaling up to $1.3 billion principal amount, and a $500 million increasing-rate bridge loan to be secured by Jostens IH Corp., a wholly owned subsidiary of Jostens Holding Corp., (or, in lieu of the bridge loan, the incurrence of other debt by Jostens IH Corp.) in connection with the Kohlberg Kravis/DLJ Transactions.

Completion of the tender offer will be subject to certain conditions, including satisfaction or waiver of the conditions to the closing of the transactions, and the company's receipt of consents to the proposed amendments from the holders of at least a majority of the outstanding notes, and the execution of a supplemental indenture to the indenture governing the notes.

Credit Suisse First Boston LLC (call 212 538-0652 or 800 820-1653) will serve as the dealer manager and solicitation agent for the tender offer and consent solicitation. MacKenzie Partners Inc. is the information agent (800 322-2885) or by email at proxy@mackenziepartners.com.

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