12/10/2010 9:46:00 AM
NEWS BRIEFS
B/E Aerospace Secures New $750m Credit Deal Amid Acquisitions
B/E Aerospace said it has prepaid the $343 million outstanding balance on its existing bank term loan and that it has replaced both the existing bank term loan and its existing revolving credit facility with a new $750 million revolving credit facility.
The amended and restated credit agreement provides for a $750 million senior secured revolving credit facility, which matures in December 2015. Borrowings under the 2010 Credit Agreement will bear interest at LIBOR (currently approximately 0.38%) plus 250 basis points. The 2010 Credit Agreement provides the Company with an option, subject to the satisfaction of certain conditions, to convert outstanding borrowings into one or more new term loans, and to retain the existing $750 million revolving credit facility.
On a pro forma basis, giving effect to the 2010 Credit Agreement, the repayment of existing bank term loan borrowings and the recent acquisitions of TSI Group, Inc. and Satair A/S aerospace fastener distribution business as if they occurred on September 30, 2010, the Company’s cash balance would have been approximately $363 million, long- term debt would have been approximately $1.6 billion (including approximately $359 million of revolving credit facility borrowings initially drawn at closing of the 2010 Credit Agreement), and the Company’s net debt-to-net capital ratio would have been approximately 44%.
Amin J. Khoury, Chairman and Chief Executive Officer commented, “The financing we announced today provides the Company with significant financial flexibility, strengthens our liquidity, and lowers our interest expense on bank borrowings,” stated CEO Amin Khoury.
For the third quarter of 2010 B/E aerospace reported “solid revenue growth and substantial margin expansion” at its consumables management segment, including fasteners. Q3 revenue rose 6.7% to $193.1 million, while segment operating earnings increased 20.9% to $40.5 million.
In September B/E Aerospace commenced a $650 million public offering of its senior notes. The Wellington, FL-based company said it intends to use the proceeds to “fund acquisitions of businesses operating within, or complementary to” its fastener distribution segment, Consumables Management, as well as its commercial aircraft segment.
In 2008 B/E Aerospace bought Honeywell’s aerospace fastener distribution business, Honeywell Consumable Solutions, for $1.06 billion, transforming B/E Aerospace into one of the largest distributors of aerospace fasteners in the world.
In the opening weeks of the fourth quarter B/E Aerospace initiated two acquisitions: TSI on October 4, 2010, and Satair’s aerospace fastener distribution business on October 25, 2010, for an aggregate purchase price of approximately $475 million. ©2010 GlobalFastenerNews.com
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