Bloomberg News

BJ’s Wholesale Club to Back Buyout With $2.58 Billion of Loans

June 29, 2011

June 29 (Bloomberg) -- BJ’s Wholesale Club Inc. received commitments for $2.58 billion in senior secured debt to back its buyout by private-equity firms Leonard Green & Partners LLP and CVC Capital Partners.

The third-largest U.S. warehouse-club chain has received financing for a $1.25 billion first-lien term loan, a $900 million, asset-based loan and a $425 million second-lien term loan, according to a regulatory filing today.

BJ’s, based in Westborough, Massachusetts, said today it agreed to be purchased by Leonard Green and CVC Capital in an all-cash deal valued at $2.8 billion.

The private-equity firms plan to invest $320 million of equity to help finance the buyout, the company said in the regulatory filing.

The debt funding will be supplied by Deutsche Bank AG, Citigroup Inc. Barclays Bank Plc, Jefferies Group Inc., General Electric Capital Corp. and Wells Fargo & Co.

The buyout is expected to close in the fourth quarter, pending regulatory approval.

Borrowings under an asset-based revolver are tied to a company’s accounts receivables and inventory. First-lien debt is repaid first in a bankruptcy or liquidation, second-lien debt is repaid next.

--Editors: Faris Khan, Chapin Wright

To contact the reporter on this story: Christine Idzelis in New York at cidzelis@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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