FinishMaster, Inc. Uses $100 Mln To Pay Down Debt
FinishMaster, Inc. recently signed a $100 million credit facility with National City Bank after the company's relationship with BANK ONE was phased out in a focus shift by the bank. Robert Millard, cfo, said the company changed its lead because "BANK ONE changed its strategy." He declined to elaborate. A bank spokesman declined to comment on its relationship with FinishMaster, but he did confirm that the bank had made some changes. "We're now saying we want a relationship that's beneficial to both of us. If it's a loan only, it may not be enough to be beneficial to us," he said.
Millard said National City won the lead of the deal, which includes six other banks. "We chose them because of their reputation in the market and their ability to get the deal done," he said. The company sought out the bank debt for the pricing. "It's cheaper than other financing," he said. Pricing ranges from 1 3/4 % to 2 3/4 % over LIBOR.
The five-year bank deal, along with $20 million in senior subordinated notes, will take out existing debt. FinishMaster, based in Indianapolis, Ind., is a national independent distributor of automotive paints, coatings, and related accessories to the automotive collision repair industry. It operates three major distribution centers and 162 branches in 25 of the 35 largest metropolitan areas in the country.
The company is not interested in other banks approaching it at this point, Millard said. "That's like asking a guy who just got married if he's interested in other women," he said. The company's EBITDA is $30.2 million. Ratio of debt to EBITDA is 3.3 to 3.4.