Credit Suisse First Boston held a bank meeting last Wednesday to launch syndication of the credit backing the sale of The Tensar Corp. by KRG Capital Partners to an affiliate of the private equity group Arcapita. The deal includes a five-year, $25 million revolver priced at LIBOR plus 2 3/4% and a seven-year, $147 million term loan "B" priced at LIBOR plus 2 3/4%. The acquisition, which is estimated to have a $385 million purchase price, is expected to close by the end of October.
Arcapita bought the company at auction during a sale led by Lehman Brothers. Stockton Croft, director at Arcapita, said he has been familiar with the company for a number of years and talks initially started about a year-and-a-half ago. "At the end of the day, they are a great company with tremendous growth opportunity," he said. Arcapita has already begun work on expanding a biaxial production line which will double its capacity. The project is expected to be completed next year. Croft said CSFB was chosen after a competitive bid process. "CSFB delivered the cleaner, best commitment papers and we're confident in their ability," he said.
KRG Capital completed a $187 million recapitalization of the company last December, with proceeds used to refinance the company's indebtedness and to replace a substantial portion of the company's preferred stock. GE Capital led the $130 million transaction and another $77 million of junior debt was led by Merrill Lynch PCG and American Capital Strategies. American Capital contributed about $24 million. The Bethesda, Md., private equity group first invested $19.75 million in Tensar in December 2000 to back the acquisition of the company, then known as Atlantech International, by KRG. In April 2004, American Capital was repaid its original $18.75 million senior subordinated debt investment while maintaining its equity investments.
Headquartered in Atlanta, Tensar provides technology solutions for site development of commercial, residential and industrial properties. The company owns a number of subsidiaries including Tensar Earth Technologies, North American Green and Tensar Polytechnologies.
Calls to Katherine Spears, Tensar cfo, were not returned. Christopher Lane, a managing director at KRG and director of Tensar, declined comment.