Centuri Group closes $400 million five-year revolver

By Wendy Van Sickle

Columbus, Ohio, Aug. 30 – Centuri Group Inc. and Centuri Canada Division Inc. entered into a second amended and restated credit agreement with Wells Fargo Bank, NA as administrative agent, providing for a $400 million five-year revolver in addition to the previously reported $1,145,000,000 term loan B facility, according to an 8-K filing with the Securities and Exchange Commission.

The revolver bears interest at Libor plus a margin ranging from 100 basis to 225 bps, depending on Centuri’s net leverage ratio.

The total capacity may be increased at Centuri’s option by an aggregate amount of up to the greater of $300 million and consolidated EBITDA as of the most recently ended four fiscal quarter period plus an amount which, after giving pro forma effect to such increase, would not cause Centuri’s net leverage ratio to exceed 4 times.

Wells Fargo Securities, LLC and BofA Securities, Inc. are the joint lead arrangers, Bank of America, NA is the syndication agent.

The revolver matures on Aug. 27, 2026. The term loan matures on Aug. 27, 2028.

Interest under the term loan is Libor plus 250 bps with a 0.5% Libor floor.

The obligations are secured by present and future ownership interests in substantially all direct and indirect subsidiaries of Centuri, substantially all of the tangible and intangible personal property of each borrower and certain of their direct and indirect subsidiaries and all of their products, profits and proceeds.

The revolver requires Centuri to maintain a maximum total net leverage ratio of 5.5 times with a step-down to 4.75 times on Dec. 31, 2022 and to 4 times on Dec. 31, 2023, although Centuri may elect to increase the maximum total net leverage ratio up to 4.5 times for a year in connection with certain material acquisitions. Centuri must also maintain a minimum interest coverage ratio of 2.5 times.

At closing on Friday, Centuri made borrowings of $1,145,000,000 under the term loan, and Centuri Canada Division Inc. borrowed C$145 million under the revolver to finance the acquisition of Riggs Distler, to refinance amounts outstanding under Centuri’s existing credit facility and certain debt of Riggs Distler and its subsidiaries, and for other general corporate purposes. Any future borrowings under the revolver will be used to refinance existing debt and for working capital and other general corporate purposes.

Centuri, a wholly owned subsidiary of Southwest Gas Holdings Inc., is a Phoenix-based utility services enterprise dedicated to delivering a diverse array of solutions to North America’s gas and electric providers.

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