American Axle details $3.65 billion debt financing for Metaldyne buy

By Sara Rosenberg

New York, Nov. 15 – American Axle & Manufacturing Holdings Inc. plans on getting a $2.45 billion senior secured credit facility and has received a commitment for a $1.2 billion senior unsecured bridge facility to fund its acquisition of Metaldyne Performance Group Inc., according to a news release.

The credit facility consists of an $800 million revolver, a $100 million term loan A and a $1.55 billion term loan B.

J.P Morgan Securities LLC is the lead bank on the debt.

Under the agreement, Metaldyne is being bought for about $1.6 billion in cash and stock, plus the assumption of $1.7 billion in net debt. Each share of Metaldyne’s common stock will be converted into the right to receive $13.50 per share in cash and 0.5 of a share of American Axle common stock.

At close, net debt will be around $3.9 billion.

Metaldyne’s existing bank debt will be refinanced with this transaction.

Pro forma 2016 estimated net debt to adjusted EBITDA will be about 3.5 times.

American Axle expects the combined company to generate significant operating profitability and cash flow that will facilitate rapid debt reduction and is targeting a net debt to adjusted EBITDA ratio of 2 times by the end of 2019.

Closing is expected in the first half of 2017, subject to shareholder and regulatory approval, and other customary conditions.

American Axle is a Detroit-based manufacturer and designer of driveline and drivetrain systems and related components and modules, chassis systems, electric drive systems and metal-formed products. Metaldyne is a Plymouth, Mich.-based provider of highly engineered lightweight components for use in powertrain and suspension applications for the vehicle markets.

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