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Lower price for Centerplate helps Kohlberg secure financing

STAMFORD Conn. Weakness in the credit markets has forced Centerplate Inc. and its pending buyer, Kohlberg & Co., to modify their acquisition agreement by reducing the purchase price and amending credit terms. The moves helped Kohlberg, a private-equity firm based in Mount Kisco, N.Y., to secure the needed financing for the deal, which is now valued between $210 and $223 million, according to a spokeswoman for Centerplate, the sports and entertainment concessionaire, based here.

Kohlberg now is offering $2.50 for each of Centerplate’s income deposit securities, or IDS, which is an investment vehicle made up of common stock and subordinated notes. The original offer, agreed upon in September, was $4 per IDS. The company’s shares have traded between 58 cents and $12.99 during the past 52 weeks.

Kohlberg also will contribute $125 million in equity toward the buyout, which still requires shareholder approval. The companies said they expect it to close in the first quarter of 2009.

To help secure the needed debt financing that Kohlberg had been unable to obtain under the original deal, which had totaled between $230 and $240 million, according to Centerplate, the on-site company agreed to new credit terms with lenders. An amended credit facility calls for the pay down of $50 million in debt and the payment of $4.5 million in fees and expenses when the deal closes. The maturity date of Centerplate’s facility was also extended from 2010 to 2012.

According to data compiled for Nation’s Restaurant News’ latest Top 100 company census, Centerplate’s estimated annual U.S. foodservice sales totaled about $709.6 million in fiscal year 2007. Its total sales for the year were $740.7 million, an 8.8-percent increase from the year earlier. The company, which provides food and concession services at more than 130 sports facilities, convention centers and entertainment venues, posted a loss of $1.9 million in fiscal 2007, compared with a profit of $3.5 million a year earlier.

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