DXP Enterprises plans to pay down credit facility via stock offering

By Wendy Van Sickle

Columbus, Ohio, Oct. 20 – DXP Enterprises, Inc. plans to pay down a portion of the outstanding borrowings under its credit facility with proceeds from an offering of 2.7 million of its common shares, according to a 424B5 filing with the Securities and Exchange Commission.

After the repayment, DXP may seek to refinance its senior secured credit facilities, depending on market conditions and other factors, according to the filing.

The Aug. 15 fourth amendment to the credit agreement requires mandatory prepayments of $30 million, including $17 million to be applied to the term loan, by Dec. 31 and $25 million, including $14 million to be applied to the term loan, by March 31, 2017.

These prepayment requirements are in addition to the previously existing requirement that the company prepay $12.5 million per quarter for the quarters ending Sept. 30 through Dec. 31 and $15.625 million per quarter for the quarters ending March 31, 2017 through March 31, 2018.

The company satisfied the $30 million additional mandatory prepayment on Oct. 3 with the proceeds from the sale of Vertex Corporate Holdings, Inc. and its subsidiaries to HWC Wire & Cable Co.

At Oct. 14, $162 million of principal was outstanding on the company’s revolving line of credit and $120.5 million was outstanding on the term loan, for a total of $282.5 million of principal outstanding at a weighted average interest rate of about 5.53%.

Based in Houston, DXP Enterprises provides maintenance, repair and operating products, equipment and services to industrial customers.

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