Kratos repays $41 million credit facility using asset sale proceeds

By Susanna Moon

Chicago, Aug. 24 – Kratos Defense & Security Solutions, Inc. said it paid down $41 million of outstanding debt under its $110 million bank credit facility using proceeds of an asset sale.

Kratos also amended its credit facility to allow for the divestiture as well as to provide a permanent reduction in the financial covenants for future periods under the credit agreement, according to a company press release.

The company said it closed the sale of the U.S. and U.K. operations of its electronic products division to Ultra Electronics Holdings plc for $260 million in cash plus up to $5 million for taxes incurred as part of the transaction, less a $2 million escrow to satisfy any purchase price adjustments and a working capital adjustment estimated as a net reduction of $7.6 million.

Proceeds of the asset sale also will be used to tender for up to $175 million principal amount of the company’s 7% senior secured notes due 2019.

Kratos will purchase the notes at par plus accrued interest.

The tender offer will end at 11:59 p.m. ET on Sept. 21.

The tender offer is required under the note terms after an asset sale, the company noted.

Kratos is a national security solutions provider based in San Diego.

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