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| Ware Grove |
Century Business Services (CBIZ) has dramatically improved its financial stability and was able to get lower borrowing costs and increased flexibility on its new credit facility, according to Ware Grove, cfo of the outsourced business services provider. The new $100 million revolver replaces a $73 million line that was put in place several years ago. "It just provides us with additional operating flexibility to finance our growth objectives for the company as well as address our capital structure," Grove noted.
The facility is priced on a grid tied to leverage and the spread ranges from LIBOR plus 1 1/2-2 1/4%. This is approximately 25 basis points lower than the previous revolver. In addition to the improved interest rate, the new facility has other advantages. "We removed any limitations on our borrowing that were subject to borrowing base calculations," Grove said. "We have dramatically improved the company's flexibility to conduct acquisitions, potential share repurchases and other activities."
The revolver also has an accordion feature so the company can increase it to $125 million, but CBIZ does not currently have plans to exercise the option. "It's just simply a feature that if we were to need it we have a structure in place to address it," Grove said. Bank of America, the incumbent, leads the new facility. "Bank of America has been very supportive of CBIZ and our financing needs and we have a nice broad relationship with multiple services with Bank of America," Grove explained. There are a total of five banks on the credit, including B of A. Grove declined to name the other banks.