$350 Million Credit Facility Supports VS&A Communications' Acquisition of Data Transmission Network Corp.

Strategic Insights -

VS&A Communications Partners III LP, a private equity affiliate of merchant bank Veronis, Suhler & Associates Inc., has completed a $350 million credit facility to support its acquisition of Data Transmission Network Corp. (DTN), a Nebraska-based company that provides time-sensitive information to 163,000 subscribers throughout the U.S. and Canada. The secured facility, fully underwritten by First Union, consists of a 5.25-year $75 million revolver, a 5.25-year $125 million term loan A, and a 6.75-year $150 million term loan B. The acquisition price is $466.9 million in cash and assumed debt, with DTN's shareholders receiving $29 per share.

Key Takeaways:

  • The $350 million credit facility is secured by First Union and comprises a 5.25-year $75 million revolver, a 5.25-year $125 million term loan A, and a 6.75-year $150 million term loan B.
  • The facility is priced at Libor plus 300 basis points for the pro-rata pieces and Libor plus 350 basis points for the B-term loan.
  • VS&A has agreed to pay $466.9 million in cash and assumed debt for Data Transmission, with shareholders receiving $29 per share.
  • DTN provides time-sensitive information to 163,000 subscribers, with 15% of shares owned by founder Roger Broderson.
  • The company's board of directors has recommended the offer, and holders of more than half of DTN shares have approved the merger.
  • DTN had revenues of $165 million, Ebitda of $64.7 million, and earnings before extraordinary items of minus-$3.7 million in 1999.
  • At the end of September 1999, DTN had total liabilities of $152 million, with $89 million as long-term debt.

Statistics:

  • The credit facility is valued at $350 million.
  • The facility comprises a 5.25-year $75 million revolver, a 5.25-year $125 million term loan A, and a 6.75-year $150 million term loan B.
  • The acquisition price is $466.9 million.
  • DTN has 11.9 million shares outstanding, with nearly 5.2 million privately-held shares.
  • The company's stock price ranges from $16 to $28.13/16.
  • DTN reported revenues of $165 million, Ebitda of $64.7 million, and earnings before extraordinary items of minus-$3.7 million in 1999.

Sources:

  • First Union
  • Industrial Bank of Japan
  • Dresdner Bank
  • VS&A Communications Partners III LP
  • Data Transmission Network Corp.
  • Veronis, Suhler & Associates Inc.
  • First National Bank of Omaha
  • Hanley-Wood Inc.
  • HCIA-Sachs
  • Bank of New York
  • BT Alex. Brown
  • New York Insurance
  • Travelers Insurance