Frontdoor, Inc. (NASDAQ: FTDR), the nation’s leading provider of home warranties, today announced it has launched the syndication of a new $1.47 billion credit facility to fund the acquisition of 2-10 Home Buyers Warranty and to refinance the company’s existing credit facilities.
The credit facility is expected to be comprised of a $418 million Term Loan A, an $800 million Term Loan B, and a $250-million revolving credit facility.
“We are nearly there on completing the acquisition and we are even more excited now about what 2-10 can do for our company,” said CEO Bill Cobb. “We are taking advantage of the strong debt capital market to opportunistically refinance our existing credit facilities as well as finance the 2-10 acquisition. This transaction also extends our debt maturities and provides the financing for potential future share repurchases.”
The company also announced that the State of California has approved the acquisition and expects to close the 2-10 acquisition in mid-December, subject to satisfaction of remaining closing conditions.
According to Thursday morning’s news release, “There can be no assurances that the company will be successful in its debt marketing efforts. Closing of the credit facilities, which is anticipated to occur in mid-December, is subject to market conditions, as well as the negotiation and execution of definitive documents and the satisfaction of customary closing conditions under the credit facilities, including the concurrent closing of the 2-10 acquisition.”
FTDR shares retreated $1.51, or 2.6%, to $57.85.
