Flow Control to launch $170 million of term loans on Wednesday

By Sara Rosenberg

New York, July 20 – Flow Control Group (FCG Acquisitions Inc.) is set to hold a lender call at 10:30 a.m. ET on Wednesday to launch $170 million of term loans, according to a market source.

The debt consists of a fungible upon draw $120 million 18-month delayed-draw first-lien term loan due April 1, 2028 and a fungible upon draw $50 million 18-month delayed-draw second-lien term loan due April 1, 2029, the source said.

Like the existing term loans, pricing on the delayed-draw first-lien term loan is Libor plus 375 basis points with a 25 bps step-down at 5.9x total net leverage and upon an initial public offering, and a 0.5% Libor floor, and pricing on the delayed-draw second-lien term loan is Libor plus 675 bps with a 25 bps step-down upon an initial public offering and a 0.5% Libor floor.

Original issue discount talk on the term loans is not yet available.

The first-lien term loan has 101 soft call protection until Oct. 1, and the second-lien term loan has the same 102, 101 call protection as the existing second-lien term loan.

Delayed-draw ticking fees are half the spread from days 61 to 120 and the full spread thereafter.

Incurrence is subject to 5.5x first-lien net leverage for first-lien draws and 6.5x senior secured net leverage for second-lien draws, the source continued.

Expected first-lien ratings are B2/B-, and expected second-lien ratings are Caa2/CCC.

Credit Suisse Securities (USA) LLC, UBS Investment Bank, KKR Capital Markets and SPC are the lead arrangers on the deal, with Credit Suisse the left lead on the first-lien loan and UBS the left lead on the second-lien loan.

Commitments are due at noon ET on July 27, the source added.

Proceeds will be used to for working capital and other general corporate purposes.

Flow Control is a Charlotte, N.C.-based distributor and technical adviser for mission critical flow control and industrial automation products and related services.

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