KMG Chemicals readies launch of $550 million term loan B for Tuesday

By Sara Rosenberg

New York, May 19 – KMG Chemicals Inc. scheduled a bank meeting for 9:30 a.m. ET on Tuesday to launch its $550 million seven-year term loan B, according to an informed source.

The company’s $600 million of senior secured credit facilities also include a $50 million revolver.

KeyBanc Capital Markets Inc., HSBC Bank USA and J.P. Morgan Securities LLC are the joint lead arrangers on the deal.

Proceeds will be used to fund the acquisition of Flowchem from Arsenal Capital Partners for $495 million, including working capital of about $17 million, to refinance existing debt and for general corporate purposes.

Closing is expected in mid-June, subject to customary conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

KMG is a Fort Worth-based producer and distributor of specialty chemicals. Flowchem is a Waller, Texas-based manufacturer of pipeline performance products.

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