(Bloomberg) -- Oak Hill Advisors has provided a $775 million private credit loan to help Carlyle Group Inc. finance its acquisition of auto parts distributor Worldpac, according to people with knowledge of the matter.
Pricing on the unitranche — which is a blend of senior and subordinated debt — is 5.5 percentage points over the Secured Overnight Financing Rate, the people said, asking not to be identified discussing a private transaction.
Oak Hill is in discussions to potentially sell some of the loan to some limited partners, they added. The Worldpac financing has leverage of about 5.3 times, which is the ratio of debt to earnings, the people said.
Oak Hill and Carlyle declined to comment. A representative for Advance Auto Parts didn’t respond to requests for comment.
Direct lenders often provide debt financing for acquisitions made by private equity firms. While the market has seen a lack of new acquisition and leveraged buyout activity this year, deals have started to pick up. Vista Equity Partners and Blackstone Inc. are asking private credit lenders for a $3.2 billion debt package to support their proposed acquisition of software maker Smartsheet Inc., Bloomberg reported on Friday.
Oak Hill served as administrative agent on the unitranche for Worldpac, and Bank of Montreal also provided an asset-based lending facility, according to a September news release. A representative for BMO declined to comment.
Carlyle announced in late August that it is acquiring Advance Auto Parts Inc.’s Worldpac unit for $1.5 billion. Worldpac is a wholesale distributor of original equipment replacement parts.
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