Circor draws $205 million loans at Libor plus 125 bps for buyout plans

By Susanna Moon

Chicago, Oct. 14 – Circor International, Inc. borrowed $205 million Thursday under its credit agreement with SunTrust Bank as administrative agent to fund its planned acquisition, according to an 8-K filing with the Securities and Exchange Commission.

Interest on the loans will be Libor plus 125 basis points. The spread on Libor loans ranges from 100 bps to 187.5 bps based on the company’s leverage.

The most restrictive loan covenant requires the company to maintain a maximum ratio of consolidated total debt to consolidated EBITDA of no more than 3.5 times, unless there is an acquisition in which case leverage is allowed to increase to 4 times.

The loan terms also require an interest coverage ratio of consolidated EBITDA to consolidated interest expense of at least 3 times.

Circor signed a definitive agreement to acquire Critical Flow Solutions for $210 million, according to a company announcement.

The company signed a merger agreement with Downstream Holding, LLC.

Burlington, Mass.-based Circor designs, manufactures and distributes fluid-control products and services.

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