FirstService Corp. has repaid its revolver through a 10-year, $100 million senior secured notes offering providing up to $150 million to fund growth including acquisitions. John Friedrichsen, cfo and senior v.p., said the company has a history of utilizing its revolver for acquisitions and then refinancing with long-term debt. In November, the company acquired approximately 70% of commercial real-estate organization CMN International for $88 million.
The revolver was also amended to increase the size by $20 million to $110 million and the maturity was extended from a 364-day facility to a three-year loan. Pricing has been decreased and is based on a leverage-based grid. When leverage is over three times, pricing is LIBOR plus 2 1/4%. Leverage at two-and-a-half to three times takes pricing to LIBOR plus 1 3/4%. When leverage is between two and two-and-a-half times, pricing is LIBOR plus 1 1/4% and when leverage is under two times, pricing is LIBOR plus 1%. The $100 million of senior secured notes was placed privately with a fixed interest rate of 5.44%. It will be used to repay all amounts outstanding on the company's revolver.
Friderichsen said Toronto Dominion Bank has been the primary bank for FirstService since 1998; an ongoing relationship built through the years. Other banks involved in the syndicate include, J.P. Morgan, Royal Bank of Canada, Scotia Capital and HSBC.
FirstService operates within the residential property management, commercial real estate, commercial security systems, property improvement services and business services. Its annual revenues are more than $1 billion and it has a history of about 20% growth per year, with about half of that growth resulting from acquisitions.
Last week it completed the acquisition of two California Closets franchises, bringing its total number of California Closets franchises to eight. These eight generate around $40 million in annual revenues. Friedrichsen said the company is always looking for acquisitions, but would not comment on targets. "We absolutely have lots of acquisitions in mind; without any doubt we will complete a few in the next year," he said.