The businesses of the software company will be put up for sale by the private equity firms in order to repay their debt.
Wrike, a startup that it acquired fromVista in 2021, is going to be sold. During a call on Thursday, the timing was revealed. The sale of the project management company would help pay back the preferred equity financing that was used to buy the company, people with knowledge of the call said.
The holders of the preferred equity have a claim on any proceeds the company gets from the sale of Wrike, according to a previous report.
Oak Hill and Carlyle have found a way to dodge losses on preferred stock.
Debt investors are being offered a vision of the potential gains from combining it with aVista portfolio company. They have a plan to cut costs.
The sale of a $4.05 billion loan and a separate euro- denominated portion equivalent to $500 million began this week. The secured bond portion is expected to launch in the coming days.
Representatives for the two companies wouldn't say anything. Representatives for Bank of America did not respond to requests for comment.
The dollar loan is expected to cost around 4.5 percentage points more than SOFR and be priced at 92 cents on the dollar.
According to the people on the call, the combined company can save $371 million a year. The one-time costs of achieving that savings will be $200 million. About 450 of the job cuts will come from the sales and marketing segment.
The $1 billion revolving credit facility will be held by banks and will be used for debt repayment. Part of the revolver will be used to help fund half of the restructuring charges. The expenses are expected to be recorded over the next two quarters.
The entire $4.05 billion US dollar portion has already been sold by the banks. The market's risk appetite is being watched closely by investors due to issues such as inflation, rising rates, and high energy costs. Other borrowers could be encouraged to issue debt if the offerings go well. Companies could hold off on selling junk bonds if they don't do well.
DavideScigliuzzo assisted.
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