Morgan Stanley and Goldman Sachs have refinanced a $995 million loan from the Thoma Bravo acquisition of Qlik Technologies last year, according to media reports published this week.
The private equity firm selected the Wall Street banks, instead of the original private lenders on the deal, in order to “slash by more than half the interest on the debt”, Bloomberg reported on Wednesday. Thoma Bravo hopes to reduce the loan interest to as low as 4.5 percent, down from the roughly 9.25 percent it paid to obtain the debt last year, the article said.
The original loan was provided by Ares Capital, Golub Capital, TSSP and Varagon Capital Partners when Thoma Bravo acquired Qlik in August 2016. These lender provided one of the largest unitranche debt offerings ever – at $1.08 billion – as part of the deal.
A Moody’s rating action on Tuesday also said that the new loan replaces the existing “higher priced” loan and will save Qlik about $50 million in interest expense. The rating agency estimates that the interest savings from the new loan will enable the software company to garner a cashflow of roughly $60 million over the next year.
The proceeds from the new loan will also pay for associated premiums and transaction fees, the rating agency said. Qlik plans to have approximately $155 million of cash upon completion of the refinancing.
The credit agreement also has covenant of 6x total net leverage maximum, though Moody's “does not expect utilisation to exceed this amount over the next twelve to 15 months”. The covenant allows for adjustments for items like cost savings and deferred revenue.
Thoma Bravo, Morgan Stanley, and Goldman Sachs were not available to comment on the deal.
Qlik sells data-visualisation software to the business intelligence and analytics industry. Moody's expects Qlik to generate 2017 revenues of approximately $785 million, the ratings action said.
Thoma Bravo is a Chicago and San Francisco-based private equity firm with a series of funds representing more than $17 billion in capital commitments.