DXP Enterprises gets $200 million credit facility

By Sara Rosenberg

New York, Aug. 29 - DXP Enterprises Inc. closed on a new $200 million five-year credit facility, according to an 8-K filed with the Securities and Exchange Commission Friday.

Wells Fargo acted as the lead arranger and administrative agent on the deal that was completed on Aug. 28, with Bank of America the syndication agent.

The facility consists of a $50 million term loan and a $150 million revolver.

Pricing on the term loan is initially Libor plus 250 basis points, but the spread can range from Libor plus 200 bps to 250 bps based on leverage.

Pricing on the revolver is initially Libor plus 175 bps, but the spread can range from Libor plus 100 bps to 200 bps also based on leverage. The commitment fee on this tranche can range from 15 bps to 30 bps, with the initial fee set at 25 bps.

Financial covenants include a fixed-charge coverage ratio of 1.25 to 1.0, stepping up to 1.5 to 1.0 for the quarter ending Dec. 31, 2009 and to 1.75 for the quarter ending Dec. 31, 2010, and a leverage ratio of 3.5 to 1.0, stepping down to 3.0 to 1.0 for the quarter ending Dec. 31, 2009 and to 2.75 to 1.0 for the quarter ending Dec. 31, 2010.

Proceeds were used to fund the about $65 million acquisition of Vertex Holdings Inc. and replace the company's prior $130 million revolving credit facility.

DXP is a Houston-based distributor, maintainer, repairer and operator of products, equipment and services to industrial customers.

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