Polypore Announces New $650 Million Senior Secured Credit Agreement and Redemption of 7.5% Senior Notes
April 08 2014 - 4:07PM
- Company uses cash on hand and new credit agreement to refinance
existing credit agreement, fund the redemption of 7.5% senior notes
and reduce total leverage
- Refinancing to generate approximately $20-25 million of
annualized interest expense savings
- New credit agreement provides flexibility to pursue growth and
value creation opportunities as cash continues to accumulate
Polypore International, Inc. (NYSE:PPO), a global high technology
filtration company specializing in microporous membranes, today
announced that it has entered into a new senior secured credit
agreement led by Bank of America Merrill Lynch and Wells Fargo
Securities LLC, as joint lead arrangers and joint book managers.
The $650 million senior secured credit agreement consists of a $500
million amortizing term loan facility and $150 million revolving
credit facility which mature on April 8, 2019.
The Company intends to use borrowings under the new term loan
and revolving credit facility in conjunction with cash on hand to
repay all outstanding obligations under the existing senior secured
credit agreement and for redemption of its $365 million callable
7.5% senior notes (CUSIP 73179VAF0), (collectively, the
"Transactions"), resulting in a lower overall level of
debt.
The redemption of the 7.5% senior notes, lower interest rates
under the new credit agreement and a reduced level of total debt
are expected to materially reduce interest expense after the
Transactions are completed, which we expect to occur in the second
quarter of 2014. On a pro forma basis for the Transactions as
though they occurred on January 1, 2014, annualized interest
expense would be in a range of approximately $15-20 million,
excluding one-time items related to the Transactions and depending
on variables such as market interest rates, hedging strategies and
average revolver borrowings. In 2013, Polypore recorded total
GAAP interest expense of $39.5 million.
Commenting on the new senior secured credit agreement, Lynn K.
Amos, Chief Financial Officer, Treasurer and Secretary said, "We
are pleased with the terms of this new commitment from a core group
of lenders who understand the growth potential and consistent cash
generation capability of our business. This refinancing
reinforces our strong financial foundation and enables us to
substantially lower interest costs, while providing flexibility to
pursue growth and value creation opportunities as we continue to
accumulate cash."
In addition, the Company filed a Current Report on Form 8-K with
the Securities and Exchange Commission with additional detail on
the senior secured credit agreement. A copy of the 8-K can be
viewed on the Company's website www.polypore.net.
About Polypore International, Inc.
Polypore International, Inc. is a global high technology
filtration company specializing in microporous membranes.
Polypore's flat sheet and hollow fiber membranes are used in
specialized applications that require the removal or separation of
various materials from liquids, primarily in the ultrafiltration
and microfiltration markets. Based in Charlotte, N.C., Polypore
International, Inc. is a market leader with manufacturing
facilities or sales offices in nine countries serving six
continents. See www.polypore.net.
Forward-Looking Statements
This release contains statements that are forward-looking in
nature. Statements that are predictive in nature, that depend upon
or refer to future events or conditions or that include words such
as "expects," "anticipates," "intends," "plans," "believes,"
"estimates," and similar expressions are forward-looking
statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results
and performance to be materially different from any future results
or performance expressed or implied by these forward-looking
statements. These factors include the following: the highly
competitive nature of the markets in which we sell our products;
the failure to continue to develop innovative products; the loss of
our customers; the vertical integration by our customers of the
production of our products into their own manufacturing processes;
increases in prices for raw materials or the loss of key supplier
contracts; our substantial indebtedness; interest rate risk related
to our variable rate indebtedness; our inability to generate cash;
restrictions contained in our senior secured credit agreement;
employee slowdowns, strikes or similar actions; product liability
claims exposure; risks in connection with our operations outside
the United States, including compliance with applicable
anti-corruption laws; the incurrence of substantial costs to comply
with, or as a result of violations of, or liabilities under
environmental laws; the failure to protect our intellectual
property; the loss of senior management; the incurrence of
additional debt, contingent liabilities and expenses in connection
with future acquisitions; the failure to effectively integrate
newly acquired operations; lithium market demand not materializing
as anticipated; the absence of expected returns from the intangible
assets we have recorded; and natural disasters, epidemics,
terrorist acts and other events beyond our control. Additional
information concerning these and other important factors can be
found in Item 1A. "Risk Factors" of our most recent Annual Report
on Form 10-K and subsequent reports filed with the Securities and
Exchange Commission. Such forward-looking statements speak only as
of the date of this press release. Polypore expressly disclaims any
obligation to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in Polypore's expectations with regard thereto or change in events,
conditions or circumstances on which any statement is based.
CONTACT: Polypore International, Inc.
Investor Relations
(704) 587-8886
investorrelations@polypore.net