ACCO Brands amends bank facility, draws on revolver to acquire PowerA

By Cady Vishniac

Detroit, Nov. 10 – ACCO Brands Corp. will draw down from its $600 million revolving credit facility to acquire PowerA, a provider of video game hardware, according to a news release.

The acquisition will be financed by both ACCO Brands’ cash on hand as well as the revolver. PowerA is being purchased for $340 million plus an additional earnout of up to $55 million in cash, contingent upon the company achieving one- and two-year sales and profit growth objectives.

As of the end of the third quarter, ACCO Brands had $85.8 million of cash on hand and $465.5 million available for borrowings on its revolving credit facility.

The company also amended its bank credit agreement to increase its maximum net leverage covenant by 0.5x for six quarters, beginning with the first quarter of 2021 and ending in the second quarter of 2022, to allow for headroom similar to the headroom before the acquisition.

The company expects its pro forma net debt leverage ratio to be approximately 4.2x at close and to return to its current level of approximately 3.5x by the end of 2021.

Rothschild and Co. acted as financial adviser for the deal. Latham & Watkins LLP is ACCO Brands’ legal adviser.

ACCO Brands is a Lake Zurich, Ill.-based office supply manufacturer.

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