Dayco completes refinancing, declares special cash distribution, enhances liquidity
Dayco LLC announced Dec. 12 that it has completed certain refinancing transactions through its subsidiaries, including a new $375 million senior secured term loan and $60 million senior secured asset-based revolving credit facility.
The company announced that, as part of the refinancing, it has replaced a previously existing credit facility and will be repaying certain outstanding notes due 2017. The company also announced that it will use the proceeds from the term loan to issue a one-time special cash distribution of approximately $108 million in the aggregate to its unit holders of record as of December 11, 2013, which the company intends to pay on or around December 16, 2013. Proceeds from the term loan will also be available for other general corporate purposes.
The refinancing transactions result in net debt of 2.7X adjusted EBITDA for the twelve-month period ended August 31, 2013, on a pro forma basis. They also increase the company’s projected total available liquidity by over 20 percent, generating significant balance sheet capacity for future growth.
The refinancing and the distribution represent the most recent strategic initiatives by the company to improve its liquidity and enhance balance sheet flexibility. In the last few months, the company has completed, and is currently on schedule to integrate, acquisitions of assets from Metavation LLC in the U.S. and Mexico, and of Precision Parts in Australia and North America that have strengthened the company’s global footprint and product offering. The company is also progressing with organic growth initiatives in Europe and emerging markets, including Brazil, China and India.
“We are very excited about the company’s completion of the refinancing transactions and the distribution which will return value to our stakeholders,” said Jim Orchard, Dayco’s Chief Executive Officer. “The company remains confident in its plan to generate further growth and value creation by leveraging its global footprint, recent acquisitions, brand equity and innovation product pipeline.”
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