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Hearthside Food preps $400M loan backing refi, dividend to Wind Point

GE Capital and SunTrust Robinson Humphrey have set a bank meeting on Wednesday morning, May 9, to launch a $400 million dividend recapitalization for Hearthside Food Solutions.

The transaction includes a $30 million, five-year revolver, a $30 million, six-year delayed-draw term loan that’s available for one year, and a $340 million, six-year B term loan.

The deal will refinance the existing $280 million term loan put in place in 2010 via a Rabobank-led syndicate, along with other debt, and will fund a small distribution to owner Wind Point Partners, sources said.

Price talk hasn’t emerged yet. The delayed draw loan will include a 100 bps unused fee, while the RC carries a 50 bps unused fee.

Based on March LTM results, the specialty snacks manufacturer will be leveraged at 3.8x through the loan and 4.7x through sponsor-owned sub debt and preferred stock, sources noted. The loan will be rated privately, with lenders told to expect a mid-single-B profile.

The issuer’s 2010 transaction that helped finance the acquisitions of Consolidated Biscuit Company, and the cereal division of Golden Temple saw a rocky reception and eventually priced wide of talk at L+600 with a 2.25% LIBOR floor, sources said.

Wind Point acquired Hearthside, which formerly operated as Roskam Bakery, in April 2009. – Chris Donnelly