DRS Technologies' $512.5 million credit facility anticipated late next week

By Sara Rosenberg

New York, Sept. 8 - DRS Technologies Inc. is looking to hold a bank meeting late next week for a $512.5 million credit facility, although the exact date has not yet been determined, according to a syndicate source. Bear Stearns and Wachovia are the lead banks on the deal.

The facility consists of a $362.5 million term loan B and a $150 million revolver, the source said. Price talk on the tranches is not presently being disclosed.

Proceeds, combined with proceeds from a bond offering, will be used to help fund the acquisition of Integrated Defense Technologies Inc.

Under the acquisition agreement, DRS will acquire all of the outstanding stock of IDT for $17.50 per share in cash and DRS common stock, subject to a collar. Each share of IDT common stock will be exchanged for $12.25 in cash and 0.1875 of a share of DRS common stock.

The cash portion of the acquisition, together with the debt of IDT to be refinanced, will total approximately $437 million at closing. Total consideration for the acquisition, including an estimated $175 million of IDT's net debt to be refinanced, is approximately $550 million, representing a multiple of 1.5x the revenues and 8.5x the EBITDA expected to be contributed by IDT during DRS's next full fiscal year ending March 31, 2005.

The transaction is expected to close by the end of this year, subject to customary regulatory approvals and other closing conditions.

Previously, a company spokesman told Prospect News that the company anticipated obtaining a total of approximately $350 million through the issuance of high yield notes and an increase in size of the company's existing term loan to support the acquisition. At that time, DRS expected the blended interest rate on the bonds and the modified term loan to be around 5.5%, with the term loan anticipated at 4.5% to 5% and the bonds anticipated at 7.5% to 8%.

DRS is a Parsippany, N.J. supplier of defense electronic products and systems.

© 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.