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USI to get $125 million credit facility for purchase by Hennessy
By Sara Rosenberg
New York, April 7 – USI Holdings Inc. (United Subcontractors Inc.) received a commitment for a $125 million credit facility to help fund its acquisition by Hennessy Capital Acquisition Corp. II, according to an 8-K filed with the Securities and Exchange Commission on Thursday.
The facility consists of a $100 million five-year senior secured term loan led by GSO Capital Partners LP and a $25 million five-year senior secured asset-based revolver led by Wells Fargo Bank.
The term loan is priced at Libor plus 1,000 basis points with a 1% Libor floor, and is non-callable for two years, then at 103 in year three and 101 in year four.
Pricing on the revolver can range from Libor plus 175 bps to 225 bps based on average excess availability.
Leverage at closing will be 2.5 times.
Under the agreement, United Subcontractors is being bought for $348.5 million, subject to certain adjustments, in cash and newly issued shares of common stock.
In addition to the new debt, the cash consideration will be funded through a combination of cash held in Hennessy’s trust account after any redemptions of its common stock and the net proceeds, if any, received from a potential private placement of up to $35 million in convertible preferred stock.
In connection with the merger, Hennessy will change its name to USI Holdings Inc.
Closing is expected in the third quarter, subject to customary conditions, including regulatory and Hennessy stockholder approvals and the receipt of proceeds from the anticipated debt financing.
USI is a St. Paul, Minn.-based provider of installation, construction and distribution services to the residential and commercial construction markets.
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