DXP Enterprises Announces New ABL Revolver and Term Loan B
August 29 2017 - 4:00PM
Business Wire
- $85 million ABL at L+150, undrawn at
close
- $250 million Term Loan B at L+550
- $19 million in cash on the balance
sheet at close
DXP Enterprises, Inc. (NASDAQ: DXPE) today announced that
it has closed on a new $250 million Senior Secured Term Loan B
(“TLB”) and refinanced its existing credit facility with a new $85
million Asset Based Revolving Credit Facility (“ABL Revolver”). The
TLB and ABL Revolver mature on August 29, 2023 and August 29, 2022,
respectively.
DXP intends to use the proceeds to repay the existing revolver
and Term Loan A credit facilities, which will be terminated on that
payment. The transaction provides DXP with operational and
financial flexibility to reinvest in the business and pursue
targeted organic and acquisition growth.
Under the ABL Revolver, the borrowing spread is based on total
availability and ranges from 1.25% to 1.75% over LIBOR for U.S.
borrowings and 1.25% to 1.75% over CDOR for Canadian borrowings.
The ABL Revolver provides for borrowings denominated in U.S.
Dollars and Canadian Dollars. The Term Loan B is priced at 5.50%
over LIBOR and includes a secured leverage covenant ranging from
5.75:1 to 4.50:1.
David R. Little, Chairman and CEO remarked, “We are pleased with
the support and commitments from our revolving credit facility and
term loan lenders. The new facilities improve our financial
flexibility and enhance our ability to pursue growth organically
and through complementary acquisitions. The favorable terms of the
new ABL Revolver and TLB reflect current market conditions and
allows us to most efficiently participate in the market
recovery.”
Kent Yee, CFO added, “We continue to proactively manage our
capital structure. This is a significant step of many that occurred
prior to this transaction. The new ABL Revolver and TLB provide us
with a competitively priced and flexible debt capital structure
that forms a foundation for our balance sheet. We believe DXP is
well-positioned to support its disciplined growth strategy well
into the future. The new ABL Revolver provides DXP with lower
capital costs compared to our prior recent revolver costs. The TLB
increases our costs 50 basis points but provides us with extended
maturities, increased borrowing capacity and flexibility for
continued execution against our strategic priorities. Based on the
transaction closing at the end of the second quarter, DXP’s net
debt to EBITDA was 3.3:1.”
Additional details regarding the ABL Revolver and TLB will be
available in DXP's Current Report on Form 8-K to be filed with the
Securities and Exchange Commission by September 5, 2017.
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: http://www.businesswire.com/news/home/20170829006032/en/
DXP Enterprises, Inc.Kent Yee, 713-996-4700Senior Vice
President, CFOwww.dxpe.com
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