Airgas to use revolver to fund packaged gas business acquisition

By Sara Rosenberg

New York, April 2 - Airgas Inc. plans to draw funds under its existing revolver to fund the acquisition of most of the U.S. packaged gas business of The BOC Group Inc. in a transaction valued at up to $200 million, according to a presentation posted by the company on Friday.

The revolver currently carries an interest rate of Libor plus 200 basis points.

In March, the company issued $150 million of senior subordinated notes at 6.25% and used the proceeds to pay down debt under its revolver, creating additional liquidity.

The acquisition is expected to close on or around July 31.

"This is a strategic opportunity in our core business that will improve our market position in the Midwest, Northeast and Southeast portions of the United States, and add our first presence in Hawaii," said Peter McCausland, chairman and chief executive officer, in a news release. "These added sites will help us grow our core business, branch by branch, through a strong regional company network. The transaction also strengthens our position in two key growth areas, specialty and medical gases.

"Airgas has a proven track record of successfully integrating both large and small acquisitions and we are confident in our ability to execute this transaction. Since completing the Air Products acquisition two years ago, we have announced nine add-on transactions. We also have paid down the majority of this acquisition debt. We are well positioned financially and able to finance this acquisition entirely with senior debt," McCausland added in the release.

Airgas is a Radnor, Pa., distributor of industrial, medical and specialty gases and welding, safety and related products.

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