Signature Group gets bridge financing, ABL facility for acquisition

By Jennifer Chiou

New York, Oct. 17 – Signature Group Holdings, Inc. announced that it has a commitment for bridge financing as well as a $175 million asset-based lending facility in connection with its acquisition of Aleris Corp.’s global recycling and specification alloys business.

According to a news release, Goldman Sachs will lead the bridge financing with Deutsche Bank, and General Electric Capital Corp. will provide the ABL facility, which will finance the growth of the company.

Those commitments are contingent on the satisfaction of standard conditions, the release noted.

Under the terms of the stock purchase agreement, Signature will acquire the business for a purchase price of $525 million comprised of $495 million in cash and $30 million of Signature preferred stock.

The purchase price represents a multiple of about 6.5 times the global recycling and specification alloys business’ adjusted EBITDA using the midpoint of the estimated improvements in third-quarter results.

The company also plans to offer $300 million of senior secured bonds as part of the acquisition financing. Remaining financing will come from cash on hand and equity financings.

Signature is a Sherman Oaks, Calif.-based holding company that invests primarily in the U.S. industrial and commercial marketplace. The global recycling and specification alloys business is a Cleveland-based recycled aluminum company.

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