Utz Quality Foods has launched a $1.1 billion term loan B through a BofA Securities–led arranger group to finance the previously announced acquisition of the business by Intersnack, a privately held multinational snack company, according to sources. Commitments to the deal are due by 2 p.m. ET on Wednesday, Sept. 16.
Price talk for the seven-year covenant-lite TLB is S+350, with a 0% floor and an OID of 99-99.5. That implies a yield to maturity of 7.65-7.75%. There is no ticking fee for 60 days, and then the fee is 50% of the margin for days 61-120, stepping to 100% of the margin thereafter. Lenders are offered six months of 101 soft call protection.
BofA leads an arranger group that includes BNP Paribas, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley and Wells Fargo.
S&P Global Ratings today downgraded Utz to B-, from B, and assigned a B- facility rating to the new TLB with a recovery rating of 4. The outlook is stable.
Proceeds will be used to partially fund the acquisition consideration and to refinance debt at Utz. Germany-based Intersnack in July agreed to take Utz private at $14.25 per share in cash in a deal with an enterprise value of $2.9 billion, including debt. In addition to the debt financing, the transaction will be funded with $920 million in cash from Intersnack, rollover equity from the Rice and Lissette family, who are descendants of Utz’s founding family, and a reinvestment by the family of a portion of the proceeds from a $44 million settlement of Utz’s tax receivable agreement. At close, the family and Intersnack will each own 50% of Utz. The transaction is expected to close in Q4 2026.
Financing also includes a $250 million, five-year ABL revolver with pricing tied to excess availability and opening at S+175, with a 0% floor. The ABL facility will include a springing fixed-charge covenant.
As of the end of Q2, Utz’s $842.3 million of long-term debt included a $630.3 million TLB due January 2032 (S+250, 0% floor), which will be repaid, as well as real estate and equipment loans and a $225 million ABL facility due July 2028. Bank of America is the administrative agent of the existing TLB.
Utz Brands (NYSE: UTZ) makes a variety of chips, pretzels and other snacks under brands such as Utz, On The Border, Zapp’s and Boulder Canyon.
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