Directed Electronics to launch $141 million term loan add-on in early September

By Sara Rosenberg

New York, Aug. 22 - Directed Electronics Inc. plans to hold a bank meeting in early September to launch its proposed $141 million term loan add-on, a company spokesman told Prospect News.

CIBC and JPMorgan are the lead banks on the deal that is anticipated to fund in late September.

Pricing on the add-on will depend on the market, but the company expects to basically stay in line with its existing term loan spread of Libor plus 225 basis points, company officials said in a conference call on Tuesday.

Proceeds will be used to fund the about $136 million cash acquisition of Polk Audio. The transaction is not subject to financing.

Following the acquisition, net debt to total EBITDA will be around 3.8 times. This multiple is expected to decline in the first and second quarters of 2007 as the company generates net cash, officials added in the call.

Directed Electronics is a Vista, Calif.-based designer and marketer of consumer branded vehicle security and convenience systems. Polk Audio is a Baltimore-based provider of high performance home and mobile audio equipment.

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