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Circor launches $785 million term loan B at Libor plus 350 bps
By Sara Rosenberg
New York, Nov. 10 – Circor International Inc. launched on Friday its $785 million seven-year covenant-light term loan B with price talk of Libor plus 350 basis points with a 1% Libor floor and an original issue discount of 99.5, according to a market source.
The term loan has 101 soft call protection for six months.
The company’s $935 million of senior secured credit facilities (B1/B+) also include a $150 million five-year revolver.
Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey Inc. are the bookrunners on the deal, and Citizens Bank and HSBC Securities (USA) Inc. are co-managers.
Commitments are due at 5 p.m. ET on Nov. 20.
Proceeds will be used to help fund the acquisition of Colfax Fluid Handling and to refinance existing debt.
Under the agreement, Colfax Fluid Handling is being bought from Colfax Corp. for about $855 million, including $542 million in cash, the issuance of about 3.3 million in new Circor shares to Colfax and the assumption of pension plans with a net liability of $150 million on a pre-tax basis linked to the Colfax Fluid Handling business.
The combination results in estimated pro forma combined revenues of around $1.1 billion based on the trailing 12-month results as of June 2017.
Net debt to EBITDA at closing will be around 5 times. The company expects to reduce leverage to below 4 times by the end of 2018 and to around 3 times by the end of 2019.
Closing is expected by the end of the year, subject to regulatory approvals and other customary conditions.
Circor is a Burlington, Mass.-based designer, manufacturer and marketer of highly engineered products and sub-systems for markets including oil & gas, power generation and aerospace & defense. Colfax Fluid Handling is a provider of engineering, development‚ manufacturing‚ distribution‚ service and support of fluid handling systems.
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