Pomeroy IT Solutions has completed a $165 million facility that comprises a $115 million revolver and $50 million floor plan inventory purchase component. The floor plan is used for consolidation of industry purchasing. Most IT and technology companies that have significant products will have a floor plan relationship, said Michael Rohrkemper, Pomeroy's cfo.
GE Commercial Distribution Finance (CDF) was the lead on the credit. Deutsche Financial Services, which was acquired by GE about a year ago, led the company's previous facility. "They know our business, they know our company well," Rohrkemper said. "They're very reactive to our needs and we're always looking for reciprocal business relationships." Tom Grathwohl, president of CDF's technology group, is the company's primary contact at the bank. Other lenders on the credit are Fifth Third Bank, National City Bank, PNC Bank, UPS Capital Corp., Bank of America and AMSouth Bank. Pricing on the loan is based on a grid and ranges from LIBOR plus 1 3/4-3%.
There is a 20 basis points unused fee. There are currently no drawings on the facility. "We went out to the market and did some comparable analysis," Rohrkemper said. "We feel that we have a good deal from a pricing standpoint."
The company's previous facility was for $240 million and also included a $25 million unsecured term loan. Rohrkemper said the company did not use the term loan last time and therefore decided not to take out another one. In addition, the size was decreased since the company really didn't need a facility that large and has to pay the unused fee on the facilities, he added. The company decided to complete the new credit to be prepared for cash flow needs moving forward with general business growth and to be prepared for any future acquisitions, Rohrkemper said.