Aquila Power Services, a newly formed holding company of private-equity firm First Reserve, tapped Deutsche Bank for a $100 million senior secured debt package backing the acquisition of Welding Services and is currently eyeing further acquisitions. "Aquila was founded by First Reserve to capitalize on the growth for services and equipment in the power industries," explained James Bennett, a v.p. at Aquila. "The firm [Aquila] does not have a specific fund devoted to acquisitions, but First Reserve does have over $2.5 billion under management," he added. The acquisition is the second after the acquisition of C&W Fabricators for $60 million, Bennett said, but he declined to name potential targets or a timeframe. Welding Services is a specialty mechanical maintenance contractor.
The Deutsche Bank loan comprises a $75 million term loan and a $25 million revolver. Noting the selection of the lead bank, Bennett said, "Deutsche Bank gave us very aggressive terms, not necessarily pricing, but they worked hard and quickly. The team had a good understanding of the industry and we were impressed by the leveraged loan capabilities," he added. GE Capital,Antares Capital, and CIBC World Markets are the agent banks, he added. He declined to provide pricing but a banker said the tranches carry a LIBOR plus 4% spread. Fees available during syndication were 11/ 2% for $15 million tickets and 1% for $10 million. Duke Capital Partners, a subsidiary of Duke Energy provided $30 million in subordinated debt financing and First Reserve provided the equity, he noted. Bennett declined comment on the ratios that were put in place and on the current debt to EBITDA levels.