Graco gets $450 million revolver led by U.S. Bank and JPMorgan

By Sara Rosenberg

New York, May 26 - Graco Inc. closed on a $450 million five-year unsecured revolving credit facility, according to an 8-K filed with the Securities and Exchange Commission on Thursday.

U.S. Bank and J.P. Morgan Securities LLC acted as the joint lead arrangers and bookrunners on the deal that was completed on May 23, with U.S. Bank the administrative agent.

Initial pricing is Libor plus 175 basis points with a 30 bps unused fee. Pricing can range from Libor plus 100 bps to 200 bps and the unused fee can range from 15 bps to 40 bps, based on leverage.

Covenants include a cash flow leverage ratio of not more than 3.25 to 1.00 and an interest coverage ratio of not less than 3.00 to 1.00.

There is a $150 million accordion feature.

The company can not draw on the revolver until it completes the acquisition of finishing businesses of Illinois Tool Works Inc. and ITW Finishing LLC and receives at least $75 million of proceeds from the issuance of additional senior notes.

The acquisition is expected to close in the third quarter, pending regulatory reviews and other customary conditions.

Proceeds from the revolver may be used to help fund the acquisition.

Graco is a Minneapolis-based provider of fluid handling solutions to manufacturing, processing, construction and maintenance sectors.

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