Private Credit Lenders in Talks to Provide $1 Billion Debt for Model N Acquisition by Vista Equity Partners

Private credit lenders, including Oak Hill Advisors, are in talks to provide $1 billion in debt to support Vista Equity Partners’ acquisition of Model N. The financing package includes a $735 million loan, a $150 million delayed-draw term loan, and an $80 million revolving credit facility. The pricing is expected to be at 5 percentage points over the Secured Overnight Financing Rate, at a discounted price of 99 cents on the dollar.

This deal highlights the competition among private credit firms to finance leveraged buyouts, as they have a substantial amount of cash to invest. Other sponsors are also turning to direct lenders for their acquisitions, with Guggenheim Partners exploring financing options for a potential buyout of Macy’s Inc. and Kymera International seeking to refinance debt and fund an acquisition.

Model N, a revenue management solutions business, is set to be acquired by Vista Equity Partners in a deal valued at approximately $1.25 billion. The acquisition is expected to be finalized in mid-2024. This news comes amidst a flurry of activity in the global credit markets, with 88 deals in 72 hours signaling a risk-on sentiment.

Overall, the private credit landscape remains active and competitive, with firms vying for opportunities to support high-profile acquisitions and refinancing efforts. Stay tuned for more updates on this developing story.