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Subsequent Event Subsequent Event (Notes)
9 Months Ended
Jan. 28, 2017
Subsequent Event [Line Items]  
Subsequent Events [Text Block]
Note 15. Subsequent Event
Acquisition of MBS Textbook Exchange, LLC
On February 27, 2017, we acquired MBS Textbook Exchange, LLC ("MBS"), the largest contract operator of virtual bookstores for the institutional client market and one of the largest used textbook wholesalers in the U.S., for $174,200. The transaction was funded from cash on-hand and proceeds from our existing Credit Agreement, as amended (as discussed below).
Together, with MBS, we will operate over 1,490 physical and virtual bookstores and serve more than 6 million students enrolled in higher education institutions.
MBS services more than 700 virtual bookstores with a comprehensive e-commerce experience and a broad suite of affordable new, used and digital course materials. MBS sources and sells new and used textbooks to over 3,700 physical college bookstores, including our 770 campus bookstores, and provides inventory management, hardware and point-of-sale software to approximately 485 college bookstores. It also operates textbooks.comSM, an e-commerce site for new and used textbooks.
We believe the transaction will enhance our competitive positioning in the dynamic higher education industry by:
enhancing our ability to customize physical, virtual and hybrid models to meet customer needs;
enable us to generate more value from the textbook marketplace; and
expand the customer base for digital products including courseware and analytics.
Prior to the acquisition, MBS was privately held and majority-owned by affiliates of Leonard Riggio, who also owns approximately 16% of our outstanding shares. Our Board of Directors established a Special Committee of the Board, comprised solely of independent and disinterested directors, to evaluate the acquisition opportunity, negotiate the terms, and make a recommendation to the Board of Directors. The Special Committee retained independent financial and legal advisors. Both the Special Committee and the full Board of Directors approved the transaction unanimously.
Amended BNED Credit Facility
In connection with the acquisition, on February 27, 2017, we amended the BNED Credit Facility with our current lenders. The amendment amends the Credit Agreement to add a new $100,000 incremental first in, last out seasonal loan facility (the “FILO Facility”) increasing the maximum availability under the BNED Credit Facility to $500,000. We borrowed approximately $55,000 under the BNED Credit Facility to fund the acquisition.
Loans under the FILO Facility will bear interest at a rate equal to the LIBOR rate, plus 3.00%. The FILO Facility will be available solely during the draw period each year, from April 1 through July 31. We are required to borrow 100% of the aggregate commitments under the FILO Facility on April 1 of each year, and the loans must be repaid in full (including interest and fees) on July 31 of each year. The commitments under the FILO Facility will decrease from $100,000 to $75,000 on August 1, 2018, from $75,000 to $50,000 on August 1, 2019 and from $50,000 to $25,000 on August 1, 2020. We will pay a commitment fee of 0.375% on the daily unused portion of the FILO Facility.