Willdan Group gets new credit facility totaling $150 million

By Mary-Katherine Stinson

Lexington, Ky., Oct. 5 – On Sept. 29 Willdan Group, Inc. replaced its prior credit agreement with a new credit facility totaling $150 million, according to an 8-K filing with the Securities and Exchange Commission.

The new facility consists of a $100 million term loan and a $50 million revolving credit facility, each maturing on Sept. 29, 2026.

The company may also request lenders to add incremental term loans or increase the aggregate commitment under the revolver by up to $75 million, subject to meeting certain conditions.

Borrowings under the facilities bear interest at SOFR with a 0% floor plus a margin ranging from 175 basis points to 300 bps depending on the company’s total net leverage ratio. The initial margin for SOFR loans will be 300 bps until the first pricing date.

There is a commitment fee on the unused portion of the revolver ranging from 20 bps to 40 bps and fees of the face amount of any letters of credit outstanding under the revolver ranging from 131.25 bps to 225 bps, both based on the company’s total net leverage ratio. The initial revolver commitment fee will be 40 bps, and letter of credit fees will be 225 bps.

Customary fronting fees payable to BMO as letter-of-credit issuer will also be paid.

In connection with the closing of the facilities, the company paid certain other fees and expenses.

The term loan will amortize quarterly in an amount equal to 7.5% annually for the first year ending after the closing date and 10% annually for the second and third years ending after closing, with a final payment of all the remaining principal and interest due on maturity.

Willdan is required to comply with financial covenants including a maximum net leverage ratio and a minimum fixed-charge coverage ratio.

Outstanding amounts under the credit facility may be prepaid without any penalties, except customary breakage costs.

BMO Bank, NA is the administrative agent.

BMO Capital Markets Corp. is the joint lead arranger and joint bookrunner.

JPMorgan Chase Bank, NA is also a joint lead arranger and joint bookrunner and the syndication agent.

The new facility replaces the company’s amended and restated credit agreement dated June 26, 2019 and the related security agreement dated Oct. 1, 2018. It consisted of a $100 million secured term loan with $60 million outstanding, a $50 million delayed-draw term loan with $37 million outstanding and a $50 million secured revolving credit facility with no balance outstanding and $4.1 million in letters of credit issued.

Proceeds from the term loan were used to repay and terminate the prior agreement on Sept. 29, as well as to fund certain fees and expenses associated with the credit agreement. Willdan intends to use the facilities to, among other things, provide working capital, finance capital expenditures and permitted acquisitions and for other general corporate purposes.

There were no early termination penalties.

Willdan is an Anaheim, Calif., provider of professional technical and consulting services to utilities, government agencies and private industry.

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