Myers gets $400 million term loan for Strong acquisition

By Mary-Katherine Stinson

Lexington, Ky., Feb. 9 – Myers Industries Inc. and foreign subsidiary borrowers MYE Canada Operations Inc. and Scepter Canada Inc. amended their seventh amended and restated loan agreement on Feb. 8 to, among other things, permit the Strong acquisition and provide a new $400 million term loan facility, according to an 8-K filed with the Securities and Exchange Commission.

The new agreement increases the applicable margins for the loans to between 177.5 basis points and 235 bps for term SOFR, RFR, Sonia, Euribor and CORRA based loans, in each case based on the company’s then net leverage ratio. The margin will be set at 215 bps as of the term loan funding date.

The total incremental facility in the amended agreement is reset to $250 million after giving effect to the term loan facility.

Under the amended agreement, the term loans will amortize in quarterly installment payments in an annual amount equal to percentages of the original principal, such as 5% for years 1 and 2 and 10% for years 3 through 5.

The facilities may be voluntarily prepaid at any time but may not be reborrowed.

Additionally, the maximum leverage ratio under the existing agreement was modified to not exceed 4x on a net basis for an initial leverage ratio holiday period for the immediate fiscal quarter after the Strong acquisition and for the three fiscal quarters immediately following and 3.25x on a net basis after the holiday period.

Certain negative covenants were changed so that the incurrence tests are now based on the new net leverage ratio level.

Finally, the scope of collateral was amended. It is now an all-asset lien.

The term loans will mature on the fifth anniversary of the amendment.

The amended agreement continues to provide for a revolving credit facility in an aggregate committed principal amount of $250 million, which includes a letter-of-credit subfacility and swingline subfacility. The revolving facility has a maturity date of Sept. 29, 2027.

The proceeds of the facilities will be used as applicable to fund a portion of the Strong acquisition and its fees, costs and expenses, to refinance existing debt, for the ongoing working capital requirements of the company and its subsidiaries and for general corporate purposes.

JPMorgan Chase Bank, NA continues to be the administrative agent for the amended agreement.

Myers is an Akron, Ohio-based manufacturer and distributor of industrial products.

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