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$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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20201223005439/en/
Senior Vice President CFO
713-996-4700 – www.dxpe.com