Davis-Standard outlines revised terms of $285M term loan backing buyout

Lead arrangers BMO Capital Markets and Stifel are out with revisions to the $285 million first-lien term loan for Davis-Standard LLC that will finance the buyout of the company by Gamut Capital Management, according to sources. Comments on the credit agreement are due by 5 p.m. ET on Dec. 9, and closing is expected Dec. 10.

Pricing for the seven-year covenant-lite term loan is L+575, with a 0.75% Libor floor and an original issue discount of 98. There are no leverage-based pricing step-downs. Initial price talk was L+500-525 with a 0.5% floor and an OID of 99. Also, the loan will now amortize at 5% per annum, instead of 1%.

In another change, there is now a 101 hard call for 12 months, revised from six months of 101 soft call protection as outlined at launch.

At revised terms, the yield to maturity is 7.11% compared to 5.80%-6.07% previously.

Corporate and facility ratings are B/B2, with stable outlooks, and with a 3 recovery rating on the loan from S&P Global Ratings.

Financing also includes a $55 million revolving credit facility due 2026, undrawn at close, that will have a springing first-lien net leverage covenant, Ratings said.

Middle-market private equity firm Gamut announced Nov. 9 that it was acquiring Davis-Standard from ONCAP, the middle-market private equity platform of Onex. The transaction is expected to close in the fourth quarter.

Davis-Standard is a provider of highly engineered systems and aftermarket services for the polymer processing industry.