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LPC: Banks provide US$835m loan package for Barracuda Networks' take-private

By Andrew Berlin

NEW YORK, Nov 28 (Reuters) - US publicly traded cloud-based security company Barracuda Networks Inc’s acquisition by private equity firm Thoma Bravo will be backed by an US$835m loan package, according to two sources familiar with the matter.

The all-cash buyout, which will capitalize Barracuda at roughly US$1.5bn, was announced on Monday. Thoma Bravo is purchasing the company for US$27.55 per share, representing a 22.5% premium to the prior 10-day average stock price.

The financing will include a US$75m revolving credit facility, a US$555m secured term loan with a first priority claim and a US$205m secured term loan with a second priority claim, according to the sources. The revolver will be undrawn at close.

Goldman Sachs will lead syndication of the debt, one of the sources said. Credit Suisse and UBS are also providing commitments, according to a press release.

The deal will be supported by US$774m of equity, for total capitalization of US$1.534bn.

Goldman Sachs, Credit Suisse and UBS declined to comment. The company and Thoma Bravo did not respond to requests for comment.

The debt will bring Barracuda’s debt-to-Ebitda, or earnings before interest, taxes, depreciation and amortization, to roughly 5.0 times through the senior loan and 6.9 times through the junior loan, based on preliminary Ebitda of approximately US$110m, the sources said. The Ebitda used to market the debt could be higher, one of the sources noted.

Thoma Bravo has been active in the cyber security space of late. Earlier in November, DigiCert, one of the buyout firm’s portfolio companies, closed on its acquisition of Symantec Corp’s web certification business.

The Barracuda transaction is expected to close before February 28, 2018, the company's fiscal year end. (Reporting by Andrew Berlin; Editing By Jon Methven)