Gardner Denver recently closed an amended five-year, $380 million term loan to help pay for the pending $476 million acquisition ofThomas Industries and retire the outstanding balance of about $146 million under its existing loan. Funding of the restated revolver is subject to completion of the acquisition, which is expected by the end of the third quarter. Until that time, the company's current revolver and term loan will remain in place.JPMorgan and Bear Stearns lead the amended credit, which is priced at LIBOR plus 5%.
The amendment is the third of three transactions the company plans to execute with regard to the acquisition. It is also planning a public offering of about 5.66 million shares of common stock and a private placement of $125 million of senior subordinated notes.
Helen Cornell, v.p. finance and cfo, said the acquisition gives the company the opportunity to reduce cost through the combination of the two companies. Potential cost reduction would be a result of combining administrative costs that come from having two standalone businesses, she said.
When choosing banks for the transactions, Cornell said the company decided to stick with JPMorgan for a relationship that traces back to other banks swallowed through acquisitions. The company had previously worked with First Chicago NBD Corp., which merged with Banc One Corp. of Ohio to form Bank One, which is now a part of JPMorgan. "They have been strong financial partners for the company," said Cornell. JPM and Bear Stearns, "played key roles in the equity secondary offering and bond offering," she explained. The syndicate includes 22 lenders.