Norcross Safety Products has obtained a new credit facility to provide ample liquidity for acquisitions as the company eyes European safety companies and other domestic ones as possible targets, said David Myers, executive v.p. and cfo for Norcross Safety. The company is looking to close on a transaction during 2003. The facility will also be used to foster organic growth and to retire Norcross Safety's existing credit facility. The new credit comprises a $30 million revolver and a C$10 million revolver both with five-year terms and a six-year, $130 million term loan.
Norcross Safety would have encountered major principal payments on its former term loan this year, so the company decided to complete a new credit rather than allow the debt to come due, Myers explained. The former facility comprised a $90 million term loan, a $50 million revolver and a C$7 million revolver. "Pricing [on the new deal] is relatively consistent with the old deal, said Myers, declining to elaborate. Regarding the timing of the deal, Myers commented that larger geo-political issues were a concern when completing the credit. The company was fortuitous to get the deal done quickly, he said. "We funded right when the war started."
FleetBoston Financial and CIBC World Markets lead the new credit. The duo held the lead roles on Norcross Safety's former bank lines as well. Myers said the company looks for a relationship from its chosen leads as well as an understanding of Norcross Safety's business.