GP Investments lines up $350 million loans for World Kitchen merger

By Susanna Moon

Chicago, April 25 – GP Investments Acquisition Corp. has obtained commitments for a $100 million senior secured asset-based revolving credit facility and a $250 million senior secured first-lien term facility, according to an 8-K filing with the Securities and Exchange Commission.

Let’s Go Acquisition Corp., a wholly owned subsidiary of GP Investments, is the borrower.

The company said it entered into a debt commitment letter on April 19 with Citigroup Global Markets Inc., Bank of Montreal and BMO Capital Markets Corp. in connection with its planned merger.

Proceeds of the term loans will be used at closing, along with up to $25 million of revolver proceeds, to help finance the merger.

After the merger, the post-combination company will assume all of the obligations of Let’s Go under the credit facilities.

The loans will be guaranteed by GP Investments and some of GP Investments’ direct or indirect wholly owned restricted subsidiaries. The facilities will be secured by substantially all of the assets of Let’s Go and the guarantors.

GP Investments entered into a merger agreement with Let’s Go; WKI Holding Co., Inc., parent company of World Kitchen, LLC, and, in its capacity as the initial holder representative, WKI Group, LLC.

Under the merger agreement, Let’s Go will merge into WKI Holding with WKI Holding continuing as the surviving corporation and a wholly owned subsidiary of GP Investments.

The aggregate purchase price is $500 million, with 75% to be paid in cash and 25% in newly issued shares of GP Investments common stock based on an issue price of $10 per share.

GP Investments said it plans to finance the cash payment with cash held in its trust account after redemptions, proceeds from the credit facilities and proceeds from equity financing.

The merger is not conditioned on the company obtaining debt financing under the credit facilities, the equity financing or any other third-party financing.

GP Investments, a blank-check company incorporated in the Cayman Islands and based in New York, was formed for the purpose of effecting a business combination with one or more businesses, the filing noted.

World Kitchen is a multinational manufacturer and marketer of houseware products based in Rosemont, Ill.

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