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Von Hoffmann to use revolver borrowings, bond add-on for acquisition
By Sara Rosenberg
New York, Sept. 8 - Von Hoffmann Corp. plans to use $50 million of short-term borrowings under its existing $90 million revolver and tacking on an additional $60 million of bond debt to one of its two existing senior notes deals to fund the acquisition of Lehigh Press Inc. for approximately $110 million in cash, a company spokesman told Prospect News on Monday.
Currently, thee company has $215 million of 10.25% senior notes due 2009 outstanding and $100 million of 10.375% senior subordinated notes due 2007 outstanding. Von Hoffmann hasn't decided which of these two outstanding bond issues would be enlarged, the spokesman said.
It is expected that Credit Suisse First Boston will be leading the tack-on deal, he added.
The existing revolver is secured by accounts receivable, inventory and property, plant and equipment. At the company's option, the loan may be increased to $100 million, subject to finding lenders to provide such an increase.
Furthermore, as part of the acquisition transaction, DLJ Merchant Banking Partners II LP, a CSFB Private Equity fund, has committed to invest $20 million in Von Hoffmann Holdings Inc. to be used for general corporate purposes, including the repurchase of existing indebtedness.
"We are excited to be adding the Lehigh Press to our family of companies," said Robert Mathews, president and chief executive officer, in a news release.
"Von Hoffmann's acquisition of the Lehigh Press is an excellent match of similar traditions, business philosophies, and industry positions. Both companies possess world-class organizations and employees with complimentary capabilities and services that will continue to operate independently."
The transaction is expected to close within 60 days.
Von Hoffmann is a St. Louis manufacturer of printed products for the educational and commercial markets.
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