Reorg Blog

Analyzing the Proofpoint merger that was filed with the SEC on April 27, our M&A by Reorg team provides a few takeaways from the definitive agreement where Thoma Bravo, private equity and growth capital firm with offices in San Francisco, Chicago and Miami, is set for an acquisition of the company for an all-cash transaction valued at approximately $12.3B.  The terms of the Proofpoint merger agreement take into consideration Thoma Bravo’s divestiture obligations which are capped at a material adverse effect. Additionally, the Proofpoint merger agreement includes termination fees for both Thoma Bravo and Proofpoint at $369M and $676M respectively as well as a clause in the case that a superior proposal is entered into by Proofpoint.

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Our M&A team also thoroughly analyzes the transaction details including the consideration, the closing conditions, the limitations on divestitures and regulatory best efforts, timing, the company termination fee and more. To read our full analysis of Proofpoint merger situation as well as our M&A team's analysis and reporting on hundreds of other mergers and acquisitions click through to the article and request a trial: https://reorg.com/pfpt-thoma-bravo-proofpoint-files-definitive-merger-agreement-with-sec-material-adverse-cap-on-divestitures-369m-676m-termination-fees/ 

Written by Richard Woolley, Editor, EMEA Core Credit || The high volume of new issuances in the first quarter has continued during the first weeks of the second. Our primary pipeline puts the total value of loans and bonds currently in the market at €11.4 billion and our watchlist features no fewer than 39 companies with near-term maturities, 15 possible LBOs and four acquisition financing candidates. Sources expect the market to stay hot until at least mid-May. Among the biggest deals in April was a €2.1 billion senior note offering by Nexi Capital, with proceeds to refinance existing debt. Elsewhere, Pfleiderer issued €750 million in sustainability-linked senior notes, Oriflame priced €250 million of floating rate senior secured notes and $550 million of senior secured notes, and Dufry printed €725 million and 300 million Swiss francs in senior notes. All of these deals were the subject of illuminating analyses by the EMEA Covenants team. The healthy pipeline means investors now have plenty of options and some deals are a less obvious fit. This was one factor in Picard’s decision to pull a €1.71 billion bond offering last week, alongside the relatively long runway the group has to refinance its senior notes due 2024. For now, sources expect it to remain a sellers’ market in Europe, and our reporters and analysts will be kept busy covering new deals.  || Sign up for our weekly updates here.

Analyzing the Surgery Partners term loan refinancing plan, our Americas Covenants team discusses the MFN protections under the company’s credit agreements as they seek to raise $125M in incremental term loans after facing economic difficulties during the Covid-19 pandemic. The incremental term loans which were incurred in 2020, as well as their repayments, both call attention to the risks associated with most favored nations (MFN) protections in credit agreements across the board. In a recent article, our team discussed the increased abilities for lenders to begin to break down the strength of MFN protections in terms of their length, scope and pricing. For Surgery Partners these trends continue to prevail. Click through to read our full covenants analysis on the Surgery Partners term loan refinancing situation and how MFN mechanics in credit agreements may have allowed borrowers to exploit these protections at the height of the Covid-19 pandemic: https://reorg.com/surgery-partners-term-loan-refinancing/

The recent filing of “defensive” applications by PT Sri Rejeki Isman Tbk (Sritex) subsidiaries, Golden Legacy Pte Ltd. and Golden Mountain Textile and Trading Pte Ltd., in the Singapore court for a moratorium under section 64 of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) comes as the company faces increasing difficulties with its creditors in Indonesia with one of its (potentially friendly) trade creditors having filed a petition to initiate PKPU against Sritex. If the full debtor-in-possession moratorium is granted by the Singapore courts, this would prevent noteholders under Sritex’s $150 million 6.875% due 2024 notes issued by Golden Legacy from taking enforcement action under the notes -- which in turn would prevent noteholders from being able to take recovery action around potential offshore value. Read more 

Discussing Texas winter storm Uri as well as the financial and legal repercussions from the storm on power and utility companies across the state, our Americas Core Credit experts conducted a webinar on Tuesday, April 27 at 10:00am to break down the impact across a variety of sectors. Our coverage team provided an overview of legal and financial issues stemming from the storm, reviewing the current state of play and cataloging the various proposed legislative and regulatory solutions and potential outcomes for impacted companies. We also talked through the storm itself and the political paralysis it caused, the storm’s impact on ERCOT’s short pay and uplift as well as hedging counterparty losses, the market participants that were affected, and the possible solutions for all entities involved.

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View the replay here: https://reorg.com/resources/webinars/texas-storm-webinar/

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If you’re already a subscriber, you can view our ever-expanding coverage of the Texas winter storm Uri situation here: https://app.reorg.com/v3#/dashboard/13464 

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If you’re not already a subscriber request a trial here: https://reorg.com/trial