(Bloomberg) -- A group of banks led by Deutsche Bank AG has been forced to fund at least a portion of a $875 million term loan they agreed to provide for the acquisition of protein bar brand FitCrunch, according to people with knowledge of the matter.
The banks were unable to sell the debt to institutional loan investors before 1440 Foods closed its purchase of FitCrunch on Nov. 1, said the people, who asked not to be identified discussing private information. In a statement announcing the acquisition’s completion, 1440 Foods said Jefferies Financial Group Inc., a unit of Macquarie Group Ltd. and BNP Paribas SA also provided committed financing.
Lender commitments on the seven-year loan were due Oct. 29 and passed without any update, the people said. A day earlier, pricing on the deal was sweetened, with the loan offered to investors at a bigger discount of 96 cents to 97 cents on the dollar.
The offering’s struggle comes during a record year for the leveraged loan market, with pricings topping $1 trillion for the first time. But there have been some recent signs of investor caution. The Morningstar LSTA index tracking leveraged loans closed Friday at 96.87, the lowest since Oct. 8.
1440 Foods, backed by private equity firms Bain Capital and 4x4 Capital, acquired FitCrunch operator Protein Bar Holding LLC for about $700 million, according to S&P Global Ratings. Bain last December agreed to buy a stake in 1440 Foods — which owns FitCrunch competitors including Pure Protein, Met-Rx and Balance.
Representatives for Bain, Deutsche Bank, Macquarie and BNP declined to comment. Representatives for Jefferies, 4x4 and 1440 Foods did not respond to requests for comment.
The acquisition was to be funded with a $875 million term loan, a $200 million asset-based lending facility and $120 million in equity from Bain and 4x4, according to S&P. It estimated FitCrunch’s debt would be 7.9 times Ebitda after the takeover, a “very high” metric.
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