Zep gets $320 million credit facility led by JPMorgan and Wells Fargo

By Sara Rosenberg

New York, July 19 - Zep Inc. closed on a new $320 million five-year senior secured credit facility, according to an 8-K filed with the Securities and Exchange Commission on Monday.

JPMorgan and Wells Fargo acted as the joint lead arrangers and bookrunners on the deal that was completed on July 15, with JPMorgan the administrative agent.

The facility consists of a $245 million revolver and a $75 million term loan to Acuity Specialty Products Inc., a wholly owned subsidiary of the company.

Pricing on the facility can range from Libor plus 225 basis points to 350 bps based on leverage. Initial pricing is Libor plus 250 bps.

The revolver has a commitment fee that can range from 40 bps to 50 bps based on leverage. The initial commitment fee is 45 bps.

There is a $30 million accordion feature.

Financial covenants include a maximum leverage ratio of 3.75 to 1.0 and a minimum fixed-charge coverage ratio of 1.25 to 1.0.

Proceeds were used to refinance the company's existing bank and receivables debt. At close, about $97 million was drawn under the new facility for the refinancing.

Zep is an Atlanta-based producer, marketer and provider of a wide range of cleaning and maintenance services.

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