Quality Home Brands has turned to Bear Stearns and BNP Paribas to provide financing to back its acquisition of Encompass Lighting. The credit consists of a $30 million revolver, a $270 million first lien and a $120 million second-lien term loan. Price talk is LIBOR plus 2 1/2% on the first lien and LIBOR plus 6 1/2-6 3/4% on the second lien. Syndication launched at a bank meeting late Thursday.
Quality was formed with the merger of Murray Feiss Imports and Sea Gull Lighting in October. Murray Feiss, Sea Gull and Quad-C Management, Murray Feiss' sponsor, all have ownership interests. After that acquisition, the company formed one of the largest private lighting companies in North America; however the two brands continue to operate under their separate names (CIN, 10/28).
Ron Hersh, president of administration at Murray Feiss, said Encompass is an extremely well run company, whose business falls into a slightly different segment of the marketplace than that occupied by Murray Feiss and Sea Gull.
"It is our policy and our design of how we want to grow Quality Home Brands," Hersh said of the acquisition. "Our goal has been to only look for complementary product lines and highly profitable companies where management is eager to stay on and participate. Encompass fits all of those qualifications." He would not discuss the financing.