Press Release Details

DXP Enterprises Announces New ABL Revolver and Term Loan B

08/29/2017
  • $85 million ABL at L+150, undrawn at close
  • $250 million Term Loan B at L+550
  • $19 million in cash on the balance sheet at close

HOUSTON--(BUSINESS WIRE)-- DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that it has closed on a new $250 million Senior Secured Term Loan B (“TLB”) and refinanced its existing credit facility with a new $85 million Asset Based Revolving Credit Facility (“ABL Revolver”). The TLB and ABL Revolver mature on August 29, 2023 and August 29, 2022, respectively.

DXP intends to use the proceeds to repay the existing revolver and Term Loan A credit facilities, which will be terminated on that payment. The transaction provides DXP with operational and financial flexibility to reinvest in the business and pursue targeted organic and acquisition growth.

Under the ABL Revolver, the borrowing spread is based on total availability and ranges from 1.25% to 1.75% over LIBOR for U.S. borrowings and 1.25% to 1.75% over CDOR for Canadian borrowings. The ABL Revolver provides for borrowings denominated in U.S. Dollars and Canadian Dollars. The Term Loan B is priced at 5.50% over LIBOR and includes a secured leverage covenant ranging from 5.75:1 to 4.50:1.

David R. Little, Chairman and CEO remarked, “We are pleased with the support and commitments from our revolving credit facility and term loan lenders. The new facilities improve our financial flexibility and enhance our ability to pursue growth organically and through complementary acquisitions. The favorable terms of the new ABL Revolver and TLB reflect current market conditions and allows us to most efficiently participate in the market recovery.”

Kent Yee, CFO added, “We continue to proactively manage our capital structure. This is a significant step of many that occurred prior to this transaction. The new ABL Revolver and TLB provide us with a competitively priced and flexible debt capital structure that forms a foundation for our balance sheet. We believe DXP is well-positioned to support its disciplined growth strategy well into the future. The new ABL Revolver provides DXP with lower capital costs compared to our prior recent revolver costs. The TLB increases our costs 50 basis points but provides us with extended maturities, increased borrowing capacity and flexibility for continued execution against our strategic priorities. Based on the transaction closing at the end of the second quarter, DXP’s net debt to EBITDA was 3.3:1.”

Additional details regarding the ABL Revolver and TLB will be available in DXP's Current Report on Form 8-K to be filed with the Securities and Exchange Commission by September 5, 2017.

About DXP Enterprises, Inc.

DXP Enterprises, Inc. is a leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States, Canada, Mexico and Dubai. DXP provides innovative pumping solutions, supply chain services and maintenance, repair, operating and production ("MROP") services that emphasize and utilize DXP’s vast product knowledge and technical expertise in rotating equipment, bearings, power transmission, metal working, industrial supplies and safety products and services. DXP's breadth of MROP products and service solutions allows DXP to be flexible and customer-driven, creating competitive advantages for our customers. DXP’s business segments include Service Centers, Innovative Pumping Solutions and Supply Chain Services. For more information, go to www.dxpe.com.

The Private Securities Litigation Reform Act of 1995 provides a “safe-harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made by or to be made by the Company) contains statements that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future; and accordingly, such results may differ from those expressed in any forward-looking statement made by or on behalf of the Company. These risks and uncertainties include, but are not limited to; ability to obtain needed capital, dependence on existing management, leverage and debt service, domestic or global economic conditions, and changes in customer preferences and attitudes. In some cases, you can identify forward-looking statements by terminology such as, but not limited to, “may,” “will,” “should,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “goal,” or “continue” or the negative of such terms or other comparable terminology. For more information, review the Company’s filings with the Securities and Exchange Commission.

Source: DXP Enterprises, Inc.

DXP Enterprises, Inc.

Kent Yee, 713-996-4700

Senior Vice President, CFO

www.dxpe.com

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