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Finish Line details expected pricing on $1.14 billion credit facility
By Sara Rosenberg
New York, July 16 - The Finish Line Inc. detailed expected pricing on its proposed $1.14 billion senior secured credit facility, according to an 8-K filed with the Securities and Exchange Commission on Monday.
The $690 million seven-year term loan is expected at Libor plus 250 basis points and the $450 million five-year asset-based revolver is expected at Libor plus 150 bps, with a 25 bps unused fee.
UBS is the lead bank on the deal.
The revolver will have a minimum fixed-charge coverage ratio covenant of 1.00:1.00 if excess availability is at or below 10%.
The term loan is expected to have no financial covenants.
Proceeds will be used to help fund the acquisition of Genesco Inc. for $54.50 per share in cash. The total transaction value is $1.5 billion.
Other financing will come from a $700 million senior unsecured notes offering.
As a backup for the bonds, the company has received a commitment for a $700 million senior unsecured bridge loan.
At close, the debt-to-EBITDA ratio is expected to be in the mid-five times area.
However, Finish Line anticipates that its strong cash flow from operations will allow it to reduce its net debt and fully fund its growth initiatives.
Closing on the acquisition is expected to take place in the fall, subject to approval by Genesco shareholders and the satisfaction of customary closing conditions and regulatory approvals. The deal is not subject to financing.
On a pro forma basis, the combined company had revenues of $2.8 billion, based on the 12 months trailing as of May 31.
Finish Line is an Indianapolis mall-based specialty retailer. Genesco is a Nashville specialty retailer that sells footwear, headwear and accessories.
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