Dechert Advises Carlson on Financing Relating to Buyout of the Remainder of Carlson Wagonlit Travel Group - US$360 Million Senior PIK Toggle Notes Offering and US$50 Million Tender Offer

Dechert LLP’s Corporate finance practice in London is advising Carlson, a global hospitality and travel company, on the financing transactions related to its proposed acquisition of the 45 percent equity interest in CWT B.V. held indirectly by JP Morgan Chase & Co. Carlson currently owns 55% of CWT B.V. (CWT). CWT owns and operates Carlson Wagonlit Travel, the world’s largest travel management company. The acquisition agreement was signed on June 22, 2014. The acquisition is subject to customary closing conditions and is expected to close sometime during the summer of 2014, depending upon satisfaction of closing conditions. After consummation of the acquisition, Carlson will own 100% of CWT.

“We are pleased with the momentum, growth and results realized by the management team at CWT. This acquisition, along with our ongoing investment in Carlson Rezidor Hotel Group and its family of brands, helps solidify our long term direction for the company,” said Carlson President and CEO Trudy Rautio. “We have benefitted from a long relationship with JPMorgan Chase & Co. and will continue to work with them in the future.”

As part of financing the acquisition, Dechert is advising Carlson Travel Holdings, Inc., a subsidiary of Carlson, Inc. on the offering of US$360 million of 7.50%/8.25% Senior PIK Toggle Notes due in 2019. The cash interest rate on the notes is 7.5 %. Under certain circumstances, Carlson Travel Holdings may elect to pay interest in the form of payment in kind notes at the rate of 8.25%. The PIK notes offering closed on July 3, 2014 with funds placed in escrow to be released in connection with the closing of the acquisition by Carlson to fund a portion of the purchase price.

“The acquisition of the minority stake in CWT and its financing were important strategic transactions for Carlson, and we are glad to be part of this and to have worked with Carlson on the transactions,” said Wayne Rapozo, the London based partner overseeing the financing transactions. “The PIK financing is indicative of a strong high yield market and the creative use of a PIK instrument to finance an acquisition where there is existing debt at the level of the operating companies.”

Dechert is also advising Carlson Wagonlit, a subsidiary of CWT B.V., on its tender offer for up to US$50 million of its US dollar denominated 6.875 % Senior Secured Notes due 2019. The tender offer was designed to reduce the overall leverage of CWT group by using cash resources at the Carlson Wagonlit level to purchase a portion of its outstanding debt. The tender offer was launched on June 23, 2014. The tender offer was launched on June 23, 2014. The early tender period terminated on July 7, 2014, and Notes tendered in the early tender period were settled on July 8, 2014. The final offering period ends on July 21, 2014. JP Morgan and Morgan Stanley are serving as Dealer Managers in connection with the tender offer.

Prior to the effect of the tender offer, Carlson Wagonlit B.V. had outstanding US dollar denominated $465 million 6.875% Senior Secured Notes due 2019 and Euro denominated €300 million of 7.25% Senior Secured Notes due 2019. Dechert advised Carlson Wagonlit B.V., as issuer, and CWT B.V., as parent guarantor, on the Senior Secured Notes offering and Luxembourg listing.
The Dechert team advising Carlson on each of these transactions was led by Corporate Finance partner Wayne Rapozo and Banking partner Corinna Mitchell and included associates Javad Husain, Amy Grammer, Jessica Sun, and trainee Alex Hillback.

About CWT

CWT is a global leader specialized in managing business travel and meetings and events. CWT serves companies, government institutions and non-governmental organizations of all sizes in more than 150 countries and territories. By leveraging both the expertise of its people and leading-edge technology, CWT helps clients derive the greatest value from their travel program in terms of savings, service, security and sustainability. The company is also committed to providing best-in class service and assistance to travelers. In 2013, sales volume for wholly owned operations and joint ventures totaled $26.9 billion. As part of its commitment to responsible business, CWT is a signatory of the United Nations Global Compact Ten Principles.

About Carlson

Carlson is a global hospitality and travel company headquartered in Minneapolis, Minn. Carlson Rezidor Hotel Group includes more than 1,340 hotels in operation and development, including, Quorvus Collection, Radisson Blu®, Radisson®, Radisson Red, Park Plaza®; Park Inn® by Radisson and Country Inns & Suites By CarlsonSM. Carlson’s portfolio also includes Carlson Wagonlit Travel®, the global leader in business travel and meetings management.

About Dechert

Dechert is a global specialist law firm focused on sectors with the greatest complexities and highest regulatory demands. We deliver practical commercial insight and judgment to our clients' most important matters. Nothing stands in the way of giving clients the best of the firm's entrepreneurial energy and seamless collaboration in a way that is distinctively Dechert.