UBS, Jefferies & Co. and Bear Stearns are leading $165 million of senior secured credit facilities to back Trimaran Capital Partners' acquisition of Standard Steel from Citicorp Mezzanine Partners. The financing consists of a $20 million revolver; a six-year, $100 million first lien; a six-year, $20 million delayed-draw, first-lien term loan facility and a six-year, $25 million second lien. The first lien is priced at LIBOR plus 2 3/4% and the second lien is priced at LIBOR plus 6%.
Mark Dalton, managing director at Trimaran, cited the firm's successful investment in FreightCar America, which went public in 2005, as the reason why it decided to buy Standard Steel. The Pittsburg, Pa.-based company manufactures steel wheels and axels for use in freight railcars and passenger cars. "We made five times our money [on the FreightCar investment], so we got familiar with the industry and was told this was available. We liked this industry and the company," he said.
Trimaran bought the company at auction for about $200 million. Dalton said he anticipates the acquisition closing at the end of June. He said the firm had worked with UBS and Jefferies on the FreightCar initial public offering and thus their choice as lead arranger. He said Trimaran had also worked with Bear Stearns in the past and that the bank was familiar with the company running the auction. A call to Citicorp was not returned.