(Bloomberg) — Blue Owl Capital Inc. led $3.2 billion in private debt financing to back Blackstone Inc. and Vista Equity Partners’ acquisition of software company Smartsheet Inc., with 20 other lenders participating, according to a person familiar with the matter.
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With fewer large acquisitions, direct lenders with record amounts of cash are having to fight for positions in club deals. Earlier this year, 24 lenders participated in a private loan deal for British insurance broker The Ardonagh Group Ltd., a record.
Bloomberg previously reported that the Smartsheet deal included a $2.9 billion loan with annual recurring revenue and a $300 million revolving credit facility.
Among other key elements of the financing, Vista and Blackstone made a number of concessions to woo the large group of direct lenders, including providing protections to block liability management transactions. Blue Owl was one of the lenders that took over troubled software company Pluralsight Inc. in August after Vista wrote off its entire equity stake in the company.
Lenders include HPS Investment Partners, Farallon Capital Management, Elliott Capital Management, Carlyle Group Inc., Brinley Partners, GoldenTree Asset Management, Golub Capital, Monroe Capital Corp., New Mountain Capital, Ontario Teachers’ Pension Plan Board, Benefit Street Partners, AllianceBernstein Holding LP, Hercules Capital Inc., Cliffwater, Canyon Capital Advisors, Jefferies Credit Partners, Macquarie Group Ltd. and Brigade Capital Management, the person said. The credit divisions of Blackstone and Vista also participated in the debt deal.
The deal was priced at 6.5 percentage points above the secured overnight financing rate, compared with an initial offer in the range of 6.25 to 6.5 percentage points above the U.S. benchmark, Bloomberg reported. The company would pay 7 percentage points above the benchmark if it chooses to pay some of the interest in kind.
Representatives for Blackstone, Vista, Blue Owl, HPS, OTPP, Benefit Street, AllianceBernstein, Hercules Capital, Cliffwater, Carlyle, Macquarie and Farallon declined to comment. The other lenders did not immediately respond to requests for comment.
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