A $120 million loan package backing Precision Parts International's buyout by First Atlantic Capital from Morgenthaler Partners is in the market. The deal, led by GE Capital, consists of a five-year, $20 million revolver and a six-year, $100 million term loan "B." Pricing on the revolver is LIBOR plus 3 1/2% and pricing on the term loan is LIBOR plus 3 3/4%. The company was bought in an auction and the purchase price was not disclosed. The acquisition is expected to close in the next few weeks.
Based in Rochester Hills, Mich., PPI designs and manufacturers high-precision metal components for engine, transmission, brake and seating systems for the automotive and aviation sectors. The company had about $214 million in revenue last year and about $37 million EBITDA. Despite troubles other auto part suppliers have had in the past few months, an individual close to the company said First Atlantic is not worried about PPI falling into the same situation. "PPI has a strong position in the market with a predictable and attractive revenue stream," that person said.
Kirkland & Ellis served as legal advisor to First Atlantic in the transaction. Goldman Sachs served as financial adviser and Baker & Hostetler served as legal advisor to PPI and Morgenthaler Partners. Calls to Morgenthaler and PPI were not returned by press time. A First Atlantic spokesman declined comment beyond a press release it issued regarding the acquisition.