(Bloomberg) -- Golub Capital is leading an effort to refinance the debt of software firm Optimizely Inc. with a new $1.1 billion facility that would stay in place if the company gets sold, according to people with knowledge of the matter.
The private deal for the Insight Partners-owned firm is expected to be covenant-lite, meaning the offering has fewer restrictions on the borrower, said the people, asking not to be named discussing a private transaction. Pricing is being discussed at around 5 percentage points over the Secured Overnight Financing Rate and at a discounted price of 99 cents on the dollar, the people added.
Private equity firms have struggled to pursue traditional exits for portfolio companies as the market for mergers, acquisitions and initial public offerings has shriveled amid higher interest rates. Sponsors are increasingly writing portability features into direct loans for flexibility and to avoid negotiating new financing in the event of a future sale.
A representative for Optimizely declined to comment, while Golub and Insight Partners did not respond to requests for comment.
Direct lenders offer features like portability and payment-in-kind debt to sweeten offerings in an effort to compete against rival Wall Street banks that tend to have cheaper pricing. Recent loans for companies including Blackstone Inc.’s Encore Group USA and Graham Partners Inc.’s Gatekeeper Systems were in negotiations to have portable structures, Bloomberg reported.
“Sponsors hope to be able to sell companies next year as the macro environment crystallizes and lenders continue to show their support by introducing features to help with that sale process,” said Sheel Patel, a partner in the private credit and special situations group at King & Spalding.
Insight Partners’ Episerver bought Optimizely for less than $600 million in 2020. Founded in 2010 by former Google executives and backed by celebrities including Ashton Kutcher, Optimizely helps companies manage and test different versions of websites to maximize clicks.
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