DXP Enterprises, Inc. Announces Closing of New Term Loan B
December 23 2020 - 12:25PM
Business Wire
- $330 million Term Loan B at L+475
- New loan maturity in 2027
- $210 million in cash on the balance sheet at close
- Enhances liquidity, strengthens balance sheet
- Positions for acquisition growth - - supporting plans to
diversify end markets
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that
it has closed on a new $330 million Senior Secured Term Loan B
(“TLB”). The TLB matures on December 23, 2027.
DXP intends to use the proceeds to repay the existing Term Loan
B, which will be terminated on that payment; and the remaining for
general corporate purposes, potential acquisitions and transaction
fees and expenses. The transaction provides DXP with operational
and financial flexibility to reinvest in the business and pursue
its strategy around organic and targeted acquisition growth.
The Term Loan B is priced at 4.75% over LIBOR and includes a
secured leverage covenant ranging from 5.75:1 to 4.75:1. The new
loan under the credit agreement is secured by the company’s
consolidated assets.
David R. Little, Chairman and CEO remarked, “We are pleased with
the successful execution of this refinancing and our efforts to
maintain our existing debt pricing while improving the terms from
our existing facility. We will take this positive momentum and
close out the year strong and look to drive growth in 2021. The
successful closing of this new term loan following the disruptions
caused by COVID-19 demonstrates the confidence lenders have in our
current and long-term plans.”
Kent Yee, CFO added, “We are pleased to announce the completion
of this refinancing, which accomplished several important
objectives, including extending our debt maturities and further
enhancing our strong liquidity position with a more flexible
balance sheet and improving key terms. DXP is well-positioned to
support its disciplined growth strategy well into the future. We
experienced strong market interest and demand for this transaction,
demonstrating the confidence that existing and new lenders,
investors and other financial participants have in DXP. We
appreciate the support from our advisors and lender group. Based on
the transaction closing at the end of the third quarter, DXP’s net
debt to EBITDA was 2.6:1”
Additional detail regarding the TLB will be available in DXP’s
Current Report on Form 8-K to be filed with the Securities and
Exchange Commission by December 31st.
About DXP Enterprises, Inc.
DXP Enterprises, Inc. is a leading products and service
distributor that adds value and total cost savings solutions to
industrial customers throughout the United States, Canada, Mexico
and Dubai. DXP provides innovative pumping solutions, supply chain
services and maintenance, repair, operating and production ("MROP")
services that emphasize and utilize DXP’s vast product knowledge
and technical expertise in rotating equipment, bearings, power
transmission, metal working, industrial supplies and safety
products and services. DXP's breadth of MROP products and service
solutions allows DXP to be flexible and customer-driven, creating
competitive advantages for our customers. DXP’s business segments
include Service Centers, Innovative Pumping Solutions and Supply
Chain Services. For more information, go to www.dxpe.com.
The Private Securities Litigation Reform Act of 1995 provides a
“safe-harbor” for forward-looking statements. Certain information
included in this press release (as well as information included in
oral statements or other written statements made by or to be made
by the Company) contains statements that are forward-looking. Such
forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results
in the future; and accordingly, such results may differ from those
expressed in any forward-looking statement made by or on behalf of
the Company. These risks and uncertainties include, but are not
limited to; ability to obtain needed capital, dependence on
existing management, leverage and debt service, domestic or global
economic conditions, and changes in customer preferences and
attitudes. In some cases, you can identify forward-looking
statements by terminology such as, but not limited to, “may,”
“will,” “should,” “intend,” “expect,” “plan,” “anticipate,”
“believe,” “estimate,” “predict,” “potential,” “goal,” or
“continue” or the negative of such terms or other comparable
terminology. For more information, review the Company’s filings
with the Securities and Exchange Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20201223005439/en/
Kent Yee Senior Vice President CFO 713-996-4700 –
www.dxpe.com
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