Deutsche Bank and Credit Suisse First Boston are leading a six-year, $312 million incremental term loan "B" for The Carlyle Group's Rexnord Corp. The debt backs the $295 million acquisition of Falk Corp. from United Technologies Corp. subsidiary, Hamilton Sundstrand. The remaining $17 million will cover transaction fees and expenses.
Pricing is set at LIBOR plus 2 1/4%. The loan's pricing steps-down when leverage is equal to 3.75 times. Syndication of the deal launched Tuesday and the acquisition is expected to close in the second quarter of 2005. Rexnord, a global manufacturer of mechanical power transmission components, was bought by The Carlyle Group in November 2002 for $915 million from Invensys. Deutsche Bank and CSFB led a $435 credit facility for that acquisition.
Moody's Investors Service assigned a B1 rating to the new term loan. Total debt will be $817 million or 4.8 times EBITDA. Based in Milwaukee, Wis., Rexnord has revenues of about $800 million. Falk is also located in Milwaukee and manufactures gears and couplings. It has annual revenues of about $200 million. Calls to Thomas Jansen, Rexnord executive v.p., finance and cfo, were not returned.