Private equity firm Kelso & Co. is taking out a $165 million facility to fund its $414 million acquisition of Insurance Auto Auctions. Bear Stearns and Deutsche Bank are leading the deal and spent last week on the road show backing the related $150 million high-yield bond deal. The facility is made up of a six-year, $50 million revolver and a six-and-a-half year, $115 million term loan "B." A bank meeting was scheduled for last week.
According to an SEC filing, the company's chairman and board of directors interviewed several investment banks in August 2004 to help explore strategies to increase shareholder value. Last December the company received proposals from nine parties with Kelso's initial proposal indicating a range of $23 to $25.50 per share. Kelso's final bid was $28.25 per share.
ValueAct Capital, the company's largest shareholder with 29.7% of its outstanding shares, supported the acquisition. Kelso & Co officials declined to comment. Scott Pettit, cfo, said that going forward, "We continue to run the business. We look at it as continuing to do as we've been doing."