Itron Scores Schlumberger Acquisition Financing
Itron, a meter-reading systems company, obtained a $240 million credit facility from Bear Stearns and Wells Fargo Bank to back the $255 million acquisition of Schlumberger Electricity Metering (SEM).
Itron, a meter-reading systems company, obtained a $240 million credit facility from Bear Stearns and Wells Fargo Bank to back the $255 million acquisition of Schlumberger Electricity Metering (SEM). In addition to backing the acquisition, the new credit also refinances the company's existing loan, which included a $55 million revolver and a $50 million term loan, said Marc Williams, treasurer of Itron.
Williams said the company completed the loan at an opportune moment. "Our timing worked out significantly to our advantage," he said, noting that within three days, the company had $1.1 billion worth of commitments. The new bank debt comprises a $55 million revolver and a $185 million "B" loan. Williams did not provide pricing details.
While the credit has been completed on a documentary basis, the new facility will not become fully effective until certain conditions are satisfied and the acquisition of SEM is completed. The company agreed to acquire SEM in July of last year, but is still waiting for approval from the Federal Trade Commission. The debt for the acquisition will also include about $125 million of notes, but Itron is still in the process of securing this financing, said Williams. He declined to comment on which firm would be leading the bond deal.
Bear Stearns leads the bank credit with Wells Fargo as the administration agent. Wells Fargo was the existing lead on the company's credit. Bear Stearns was brought on board because the firm assisted the company with other investment banking activities, which include playing an advisor role for the acquisition, Williams said.