Circor plans $935 million credit facilities for Colfax Fluid purchase

By Sara Rosenberg

New York, Sept. 25 – Circor International Inc. has received a commitment for $935 million of senior secured credit facilities to help fund its acquisition of Colfax Fluid Handling and refinance existing debt, according to an 8-K filed with the Securities and Exchange Commission on Monday.

Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey Inc. are the joint lead arrangers and bookrunners on the deal.

The facilities consist of a $150 million five-year revolver and a $785 million seven-year covenant-light term loan B.

As committed, pricing on the revolver and term loan is anticipated to be Libor plus 425 basis points, with the term loan having a 1% Libor floor.

The revolver has a 50 bps commitment fee that can step-down to 37.5 bps based on first-lien net leverage.

The term loan B is expected to include 101 soft call protection for six months and amortization of 1% per annum.

Under the agreement, Colfax Fluid Handling is being bought from Colfax Corp. for about $855 million including $542 million in cash, the issuance of about 3.3 million in new Circor shares to Colfax and the assumption of pension plans with a net liability of $150 million on a pre-tax basis linked to the Colfax Fluid Handling business.

The combination results in estimated pro forma combined revenues of around $1.1 billion based on the trailing 12 month results as of June 2017.

Net debt to EBITDA at closing will be around 5 times. The company expects to reduce leverage to below 4 times by the end of 2018 and to around 3 times by the end of 2019.

Closing is expected by the end of the year, subject to regulatory approvals and other customary conditions.

Circor is a Burlington, Mass.-based designer, manufacturer and marketer highly engineered products and sub-systems for markets including oil & gas, power generation and aerospace & defense. Colfax Fluid Handling is a provider of engineering, development‚ manufacturing‚ distribution‚ service and support of fluid handling systems.

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