TransUnion to launch $3.1B 1st-lien, $640M 2nd-lien term loans for acquisitions

TransUnion scheduled a lender call for 3 p.m. ET on Nov. 2 to launch $3.1 billion first-lien and $640 million second-lien term loans to back the company's previously announced acquisitions of Neustar and Sontiq, according to sources.

Price talk for the seven- and eight-year covenant-lite facilities has not yet been announced. The first-lien tranche will offer six months of 101 soft call protection while the second-lien tranche will be redeemable at par for six months post closing, followed by hard calls of 102 and 101 in years one and two, respectively.

Deutsche Bank is left lead arranger on the first-lien tranche and J.P. Morgan is left lead on the second-lien term loan. Capital One, RBC Capital Markets and BofA Securities are also part of the arranger group on the first-lien tranche, while Deutsche Bank and Wells Fargo are also arrangers on the second-lien tranche.

The company announced last week that it entered into a definitive agreement to acquire Sontiq for $638 million. Sontiq is expected to generate $85 million of revenue in 2021 and has an adjusted EBITDA margin of approximately 40% that is expected to increase. The purchase price represents a roughly 19x multiple of expected full-year 2021 adjusted EBITDA.

In September, the company announced that it would acquire Neustar from Golden Gate Capital and GIC for $3.1 billion. For 2021, Reston, Va.-based Neustar is expected to generate adjusted EBITDA of $115 million on revenue of $575 million. Closing of the acquisition is expected in the fourth quarter.

The issuer currently has a first-lien term loan due November 2026 (L+175, 0% Libor floor) that totaled $2.23 billion as of Sept. 30. The issuer also has a term loan A-3 due December 2024 that had $1.1 billion outstanding as of Sept. 30.

TransUnion provides risk and information services, including consumer reports, risk scores and analytical services and decision capabilities to businesses. Current corporate ratings are BB+/Ba2.