Chelmsford, Mass.-based workforce management company Kronos turned to Citizens Bank of Massachusetts for a revolver to back its $150 million acquisition of UNICRU. Mark Julien, cfo, said a revolver was chosen, rather than a term loan, because it gives more flexibility at a lower cost. The facility is its first credit line.
Julien said the company typically does one acquisition a quarter, although they tend to be smaller than UNICRU, the largest to-date costing roughly $50 million. A few weeks ago, Kronos announced it will also acquire SmartTime Software for an undisclosed price.
The financing for the UNICRU acquisition consists of a three-year, $100 million revolver with pricing based on a leverage ratio ranging from LIBOR plus 75-150 basis points. Julien said the company had previously used cash generated by operations to fund all acquisitions and stock buybacks.
Julien said Citizens Bank is Kronos' relationship bank and provided a very competitive offer. He added Kronos talked to other banks when first considering the facility, declining comment on which ones.