Memec plans to get new $300 million credit facility in connection with IPO

By Sara Rosenberg

New York, May 3 - Memec Inc. is negotiating a new $300 million senior credit facility that it plans to close on before completing its initial public offering of common stock, according to an S-1 filed with the Securities and Exchange Commission on Monday.

The credit facility will consist of a revolver, a term loan A and a term loan B. The revolver and the term loan A will be supported by a borrowing base determined by accounts receivables and inventory. The term loan B will be supported on a second lien basis by the borrowing base, the filing added.

Proceeds from the credit facility, combined with proceeds from the IPO, will be used to repay consortium loans owed to the Permira funds, Schroder Ventures US Fund, DB Industrial Holdings Beteiligungs AG & Co KG and other members of the purchasing consortium, repay deep discount bonds held by the Permira funds, Schroder Ventures US Fund, DB Industrial Holdings Beteiligungs AG & Co KG and a former member of the board of directors, pay a one-time $2 million fee to an affiliate of the Permira funds and for general corporate purposes, including working capital.

As of Dec. 31, Memec had $159 million of outstanding consortium loans and $431 million of outstanding deep discount bonds.

Credit Suisse First Boston, Goldman, Sachs & Co., JPMorgan, Deutsche Bank Securities and Merrill Lynch & Co. are leading the IPO.

Memec is a San Diego semiconductor demand creation distributor servicing the electronics industry.

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