Rocky Shoes & Boots tapped GMAC Commercial Finance to lead a $118 million credit facility backing the $89.5 million acquisition of EJ Footwear. American Capital Strategies (ACS) is also providing a $30 million second-lien term loan.
Rocky Shoes, a manufacturer of rugged outdoor boots, has had a relationship with GMAC Business Credit since 2000, according to Jim McDonald, cfo. He said this relationship led to the commercial finance arm being chosen to agent the new credit facility. This comprises a three-year, $100 million revolver and three-year, $18 million term loan. "They've been a good partner, been responsive to what our needs have been and we wanted to continue that relationship with them," he noted. "From a cost standpoint, they had the best cost structure for us also."
GMAC then referred the company to ACS, which is also an agent on the credit. The middle-market financing company is backing Rocky Shoes purchase of EJ with $30 million of six-year, senior secured term "B" notes. These are senior secured, but will be last out in the event of liquidation and principal payments will begin in the fourth year.
McDonald declined to disclose the spread on the credit, but said it is a little different than Rocky's previous $45 million revolver as leverage has changed. In addition to providing the funds for the acquisition, the facility "gives us the ability to pay for the debt through our projected cash flows," McDonald noted.