A Morgan Stanley-led arranger group this week added documentation changes to close a $2.4 billion leveraged loan refinancing for Qlik, according to sources.
Among the changes, Serta protection was added, and the existing J.Crew and Chewy protections were enhanced. The MFN protection was reduced to 50 bps with an 18-month sunset, from 100 bps for six months, and carveouts were removed other than that related to debt incurred in conjunction with M&A. The ratio-based incremental capacity was reduced by 0.5x, to 4.5x consolidated first-lien net leverage, 6.5x consolidated senior secured net leverage, and 7x consolidated total net leverage. The pick-your-poison debt basket, utilizing available amount and some other RP and RDP baskets, was removed and the non-loan party debt basket was reduced to 50% of EBITDA, from 100%. Also, the company will provide quarterly and annual MD&A.
The deal closed at the wide end of price talk, at S+475, with a 0.5% floor and an OID of 98. The loan has a seven-year maturity and comes with six months of 101 soft call protection.
At these terms, the yield to maturity is 11%.
Morgan Stanley, BMO Capital Markets, Goldman Sachs, HSBC, BofA Securities, Citi, Mizuho, and Scotia are joint bookrunners on the deal. Morgan Stanley is administrative agent.
Proceeds from the deal will be used to refinance debt at Qlik and recently acquired data transformation provider Talend. Qlik and Talend, both backed by Thoma Bravo, agreed to merge early this year, and the transaction closed in May. Qlik’s existing covenant-lite TLB due April 2024 (S+400, 0% floor), which totaled $1.39 billion as of March 2023, was originally syndicated in 2017 to replace a roughly $1 billion unitranche facility that financed Thoma Bravo’s buyout of the company a year earlier. Talend’s debt dates to Thoma Bravo’s LBO of the business in 2021, which was backed by $1.075 billion of secured credit facilities from a group of private lenders. Pricing for the first-lien term loan due September 2028 came at L+600, with a 0.75% floor, lender filings show.
Ratings are B/B2/B+ for the issuer and B/B2/BB+ for the loan, with recovery ratings of 3 and 1 from S&P Global Ratings and Fitch, respectively. All agencies have a stable outlook. Moody’s upgraded Qlik on Oct. 5 by one notch from B3 citing the extension of the debt maturity profile and expectations for a solid performance in the next few years. On the same day, S&P issued preliminary ratings and said it would upgrade Qlik from B- on close of the financing. In its assessment, S&P said the expected synergies from the combination of Qlik and Talend are larger than expected and — along with continued growth — will support cash interest coverage and free cash generation over the next few years.
In addition to the TLB, Qlik will have a new $200 million revolver due 2028 with a springing first-lien net leverage covenant.
Qlik is a software provider with a portfolio of solutions for data integration, data quality and analytics. Project Alpha Intermediate Holding Inc. is the borrower.
Learn about our editorial standards.