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DXP Enterprises trims term loan to $105 million, changes OID to 94.5
By Sara Rosenberg
New York, Nov. 15 – DXP Enterprises Inc. downsized its fungible incremental term loan B due Dec. 23, 2027 (B2/B) to $105 million from $125 million and tightened the original issue discount to 94.5 from talk in the range of 93 to 94, according to a market source.
Pricing on the incremental term loan remained at SOFR plus 525 basis points with a 1% floor. The debt has 10 bps CSA.
The incremental term loan and the existing term loan B are still getting 101 soft call protection for six months.
Amortization on the incremental term loan is 1% per annum.
With this transaction, pricing on the existing term loan B will be revised to SOFR plus 525 bps with a 1% floor from Libor plus 475 bps with a 1% floor.
In addition, the company received approval of an amendment to its existing term loan B to increase the free and clear basket under the accordion to $85 million from $52.5 million, change the cap on cash netting to $200 million from $150 million, and revise the ratio test for unlimited distributions to 4x net secured leverage from 3.75x.
Goldman Sachs Bank USA is the lead arranger on the deal.
Commitments continued to be due at 2 p.m. ET on Tuesday, the source added.
As before, a consent fee of 50 bps will be payable to each existing lender that consented to the amendments, other than the amendments solely to convert Libor to SOFR and/or increase the applicable margin, based on the principal amount of the existing term loan held by each existing lender.
Proceeds from the incremental term loan will be used to add cash to the balance sheet to pre-fund tuck-in acquisition targets under letters of intent or committed, and to repay borrowings under an existing ABL revolving credit facility due 2027.
DXP is a Houston-based distributor of maintenance, repair and operating products, equipment and services and provider of integrated pumping solutions and supply chain management services.
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