Gorman-Rupp signs $540 million of loan financing for Fill-Rite buy

Chicago, June 1 – Gorman-Rupp Co. signed a $450 million senior secured credit agreement and a $90 million subordinated credit agreement to fund the $525 million acquisition of Fill-Rite and Sotera, a division of the Tuthill Corp., according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

The senior credit agreement breaks down into a $350 million term loan and a $100 million revolver with a letter of credit sub-facility of $15 million and a swingline sub-facility of $20 million.

At closing on Tuesday, the company borrowed the entire amount under the term loan and $5 million from the revolver and with borrowings under the subordinated credit agreement and cash on hand financed the acquisition.

Amortization payments on the term loan will start in September, payable in quarterly installments.

Both the term loan and revolver have a five-year tenor.

Interest will be between SOFR plus 175 basis points and 275 bps, based on leverage.

The starting interest rate is SOFR plus 275 bps.

The commitment fee on the revolver ranges from 30 bps and 50 bps, with a starting fee of 50 bps.

The company must maintain a senior secured net leverage ratio below 4.5x through March 31, 2023, with a decrease to 4x for each of the four consecutive fiscal quarter periods ending June 30, 2023 and Sept. 30, 2023 and then to 3.5x for the four consecutive fiscal quarter period ending Dec. 31, 2023 and each of the four consecutive fiscal quarter periods after that.

The company must maintain a consolidated total net leverage ratio below 5.75x through March 31, 2023, with a decrease to 5.25x for each of the four consecutive fiscal quarter periods ending June 30, 2023 and Sept. 30, 2023 and then to 4.75x for the four consecutive fiscal quarter period ending Dec. 31, 2023 and each of the four consecutive fiscal quarter periods after that.

The fixed charge coverage ratio must be at least 1.2x for any four consecutive fiscal quarters starting with the fiscal quarter ending June 30.

The company also borrowed a $90 million subordinated credit facility with a 5.5-year term.

Early prepayment would include a make-whole amount initially. From year two to year three, any prepayment would be at 102 and then at 101 from year three to year four.

Interest is SOFR plus 900 bps.

The subordinated credit agreement requires the company to maintain a consolidated senior secured net leverage ratio not to exceed 5.4x for each of the four consecutive fiscal quarter periods ending June 30, 2022, Sept. 30, 2022, Dec. 31, 2022 and March 31, 2023, decreasing to 4.8x for each of the four consecutive fiscal quarter periods ending June 30, 2023 and Sept. 30, 2023, and decreasing to 4.2x for the four consecutive fiscal quarter period ending Dec. 31, 2023 and each of the four consecutive fiscal quarter periods ending thereafter.

The subordinated credit agreement requires the company to maintain a consolidated total net leverage ratio not to exceed 6.9x for each of the four consecutive fiscal quarter periods ending June 30, 2022, Sept. 30, 2022, Dec. 31, 2022 and March 31, 2023, decreasing to 6.3x for each of the four consecutive fiscal quarter periods ending June 30, 2023 and Sept. 30, 2023, and decreasing to 5.7x for the four consecutive fiscal quarter period ending Dec. 31, 2023 and each of the four consecutive fiscal quarter periods ending thereafter.

For the senior secured credit agreement, Bank of America, NA and Wells Fargo Bank, NA were the syndication agents.

The co-documentation agents were Fifth Third Bank, PNC Bank, NA, Huntington National Bank and U.S. Bank NA.

JPMorgan Chase Bank, NA is the administrative agent.

Joint bookrunners and joint lead arrangers are JPMorgan Chase Bank, NA, BofA Securities, Inc. and Wells Fargo Securities, LLC.

For the subordinated credit agreement, JPMorgan Chase Bank, NA is the administrative agent, bookrunner and lead arranger.

Gorman-Rupp is a Mansfield, Ohio-based designer, manufacturer and marketer of pumps and pump systems. Fill-Rite is a provider of mission-critical pumps.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.