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$85 million ABL at L+150, undrawn at close
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$250 million Term Loan B at L+550
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$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.
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Source: DXP Enterprises, Inc.