Enerpac Tool gets $400 million revolver, $200 million term loan

By Marisa Wong

Los Angeles, Sept. 15 – Enerpac Tool Group Corp. entered into a credit agreement on Sept. 9 with PNC Bank, NA as administrative agent for a $400 million revolving credit facility and a $200 million term loan, according to an 8-K filing with the Securities and Exchange Commission.

The revolver includes a $200 million sublimit for borrowings denominated in euros, pounds sterling or other currencies.

The company will have the option to request to increase the loan facilities or to enter into one or more additional tranches of term loans in an aggregate amount of up to $300 million.

Borrowings under both the revolver and term loan will mature on Sept. 9, 2027.

The $200 million term loan is required to be repaid in principal installments of $625,000 per quarter beginning on March 1, 2023, increasing to $1.25 million per quarter beginning on March 1, 2024 and increasing to $2.5 million per quarter beginning on March 1, 2026, with the remainder due at maturity.

Borrowings bear interest at adjusted term SOFR plus 112.5 basis points. The margin is subject to adjustments based on the company’s net leverage ratio and generally ranges from 112.5 bps to 187.5 bps.

In addition, a non-use fee is payable quarterly on the average daily unused portion of the revolver ranging from 15 bps to 27.5 bps, based on the company’s net leverage ratio.

The credit agreement contains financial covenants requiring the company to not permit the net leverage ratio to exceed 3.75 to 1.00 (or, in some cases, 4.25 to 1.00 for the testing period during which material acquisitions occur and the next succeeding four testing periods); and the interest coverage ratio to be less than 3.00 to 1.00.

Upon entry into the new credit agreement, the company also terminated and repaid all debt outstanding under its credit agreement dated March 29, 2019 with JPMorgan Chase Bank, NA as administrative agent.

The prior agreement initially provided for a $400 million revolver and a $200 million term loan. Borrowings under the prior facility were scheduled to mature on March 29, 2024.

Initial borrowings under the new credit agreement were used to repay the outstanding debt under the old credit agreement.

The industrial tools and services company is based in Menomonee Falls, Wis.

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