Genstar Capital tapped Jefferies & Co. for a $105 million senior secured credit to back its acquisition of Fort Dearborn Operating Co. The deal consists of a $20 million first-lien revolver and an $85 million first-lien term loan. The tranches are pari passu and are priced at LIBOR plus 3%. Covenants include total leverage and fixed charge, according to a banker. Rick Hoskins, managing director, said Genstar chose Jefferies because of the work the firm has done for Genstar in the past. "[They are an] excellent company to work with," he said.
Hoskins said Genstar is looking to the prime label business because it is a "good niche" and consists primarily of small, family-owned businesses. Genstar is eyeing several other companies within the label sector that Hoskins believes would compliment Fort Dearborn. The goal of these acquisitions is to build up the companies to create a solid professional force with a good supply of products to the market, Hoskins said. He would not name the companies. Genstar researched and approached Fort Dearborn, which had not been looking to sell at the time, but took Genstar up on its offer.