Ultra Electronics lays out price talk on buyout term loans

Ultra Electronics Holdings PLC has outlined price talk on the cross-border term loans backing its buyout by Advent through Cobham.

Both the euro- and dollar-denominated facilities are guided at E/L+375-400, offered at 99.50. The €475 million euro piece is talked with a 0% floor, to yield about 3.89%-4.15%, while the $855 million dollar tranche will have a 0.50% floor, to yield 4.41%-4.67%.

The transaction is now out to syndication before the Nov. 16 commitment deadline. Barclays is the sole physical bookrunner on the dollars, while Barclays, BNP Paribas, Credit Suisse and HSBC are physical bookrunners on the euros.

Goldman Sachs, Jefferies, Lloyds, Morgan Stanley, NatWest, RBC, SMBC and UniCredit make up the full mandated lead arranger group. Credit Suisse is the agent for both tranches.

Corporate ratings are confirmed at B-/B2, while the issue ratings are B-/B1, with an S&P Global Ratings' recovery rating of 3.

Cobham Ultra SeniorCo is the borrower for the euro tranche. Cobham Ultra US Co-borrower is borrower on the dollars.

Advent through Cobham confirmed the deal to buy Ultra Electronics on Aug. 16 in an acquisition that valued the London-listed group at £2.57 billion. The deal comes with commitments designed to allay potential government fears over national security and is subject to a public interest intervention notice issued by the secretary of state for business. This means the Competition and Markets Authority must complete and submit a report on the takeover by midnight U.K. time on Jan. 18, 2022.

Advent agreed to buy Cobham in 2019, in a deal backed by a cross-border first- and second-lien loan financing that was allocated in January 2020. That financing included an €885 million term loan B priced at E+375 and a $1.188 billion TLB at L+350, with a 1% floor. There was also a £532 million-equivalent, dollar-denominated eight-year second-lien facility.

Ultra Electronics serves the defense, security, critical detection and control markets.