Switch borrows $100 million revolver in take-private transaction

Chicago, Dec. 6 – Switch, Inc. announced some details of the financing on the $11 billion take-private transaction wherein funds affiliated with the investment management platform of DigitalBridge and an affiliate of IFM Investors acquired all outstanding common shares, according to a press release and an 8-K filing with the Securities and Exchange Commission.

At closing, on Dec. 6, Sunshine Bidco Inc. entered into a $100 million revolver with Toronto Dominion (Texas) LLC as administrative agent.

There is a $25 million sublimit on the facility for letters of credit.

The facility matures on Dec. 6, 2025.

Interest will be at SOFR plus 200 basis points, subject to a 0% SOFR floor. Interest may step down 25 bps on the achievement of a certain loan-to-value ratio and an additional 25 bps if there is a qualified initial public offering.

The commitment fee will be between 25 bps and 50 bps.

The filing also mentioned that Switch’s amended and restated credit agreement from June 27, 2017 had been terminated, and that $877,121,561 had been paid to satisfy all related outstanding obligations.

The transaction financing also included a mortgage loan with $5,828,900,000 funded on Dec. 6 and another $866.1 million available for a later draw.

The mortgage loan, secured by 19 properties, has interest at SOFR plus 300 bps. The maturity date is Dec. 15, 2025.

Debt financing for the transaction was led by TD Securities, which acted as joint lead arranger, joint bookrunner and administrative agent, along with joint lead arrangers and joint lead bookrunners Societe Generale, Royal Bank of Canada, Citizens Bank, NA, Truist Securities, Inc., Banco Santander, SA, Bank of Nova Scotia and MUFG Bank Ltd.

Dechert LLP served as legal counsel to the lenders.

Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC acted as financial advisers to the special committee of the board of directors of Switch, and Latham & Watkins LLP acted as its legal counsel.

RBC Capital Markets, LLC served as lead financial adviser and TD Securities served as co-adviser to DigitalBridge and IFM, and Simpson Thacher & Bartlett LLP acted as their legal counsel.

Switch is a Las Vegas-based technology company. The transaction was announced earlier in the year and is expected to close in the second half of 2022.

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