US government-focussed management and technology consultancy Booz Allen Hamilton has completed a US$1.24bn refinancing. The company repaid US$1.02bn of senior secured term loans and US$222.1m of mezzanine credit facilities through a mixture of new debt…
US government-focussed management and technology consultancy Booz Allen Hamilton has completed a US$1.24bn refinancing. The company repaid US$1.02bn of senior secured term loans and US$222.1m of mezzanine credit facilities through a mixture of new debt and cash on hand.
The new credit facility comprises a US$500m 5-year Term Loan A, paying 250bp over Libor, and a US$500m 6.5-year Term Loan B, issued at par and paying a rate of 300bp over Libor with a 1% floor. Booz Allen also secured a US$30m increase to its existing undrawn revolving credit facility upping it to US$275m. The revolver carries an interest of 250bp over Libor and matures on 31 July 2014.
Under the terms of the financing, which was taken out via wholly owned subsidiary Booz Allen Hamilton Holding Corporation, the consultancy also has the ability to increase the facilities by up to US$150m, plus an additional US$150m under certain circumstances.
BofA Merrill Lynch led the refi with Credit Suisse administrative agent. Both banks were joint lead arrangers and bookrunners while Barclays Capital, Goldman Sachs, Morgan Stanley and Sumitomo Mitsui Bank were joint bookrunners.
As a result of the refi, Booz Allen states that it now has both lowered the interest rates on its term loan debt and lowered the overall amount of debt on its balance sheet. The company expects the transaction to reduce fiscal year 2012 interest expense by approximately US$58m.
At the end of 2010, Booz Allen raised approximately US$238m from an IPO on the NYSE, giving it a market cap of just under US$2.7bn. The company’s private equity owner Carlyle maintained its majority control of the company reducing its holding by only 8% to 69%. As with the refinancing, the lead bookrunners for that transaction were Barclays Capital, BofA Merrill Lynch, Credit Suisse and Morgan Stanley.
