(Bloomberg) -- JPMorgan Chase & Co. is expected to launch a $2.3 billion debt sale in the coming weeks that would fund R.R. Donnelley & Sons Co.’s purchase of Vericast’s print and digital marketing business and overhaul its debt structure, according to people with knowledge of the matter.
R.R. Donnelley’s debt offering is set to include a $800 million leveraged loan and a $1.5 billion bond, said the people, who asked not to be identified because the matter is private. Decisions on the structure aren’t final and plans could change, the people added.
Messages left with R.R. Donnelley, and Vericast’s private equity owner MacAndrews & Forbes, were not returned. Representatives for JPMorgan, Vericast and Chatham Asset Management — Vericast’s largest creditor and R.R. Donnelley’s owner — declined to comment.
The $1.35 billion sale of the business, known as Valassis, would largely come in the form of debt forgiveness by Chatham, Bloomberg previously reported. Ron Perelman’s MacAndrews & Forbes will receive a $50 million payout as part of the sale, the people said.
Vericast received approval from its existing debt holders for the sale, the people said, following months of negotiations. Some lenders were previously seeking additional protections in exchange for waiving a covenant to allow the deal to proceed, Bloomberg reported.
In conjunction with the deal, Vericast launched a debt swap for its first-lien notes due 2026, the people said. The early deadline for the exchange, which offers the best terms to investors, is July 17, they added.
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