American Reprographics Company has completed a new financing package via Goldman Sachs, its "preferred investment bank." With interest rates near historic lows, it was the perfect time to refinance the company's debt, said Mark Legg, American Reprographics' cfo and secretary. In both of the company's refinancing deals, Goldman was "by far the most imaginative" and diligent in getting American Reprographics the right package, said Legg, commenting on its choice for lead bank. In addition, the Goldman team working with American Reprographics was also the exact team the company had worked with on its previous financing package, so the deal had a very streamlined quality, Legg said, noting that the 100% team continuity was a "huge plus."
The new financing includes a $100 million term loan "A" and a $225 million private-placement tranche, which refinances the company's existing bank debt. The company's previous financing package was syndicated in April 2000. This loan comprised a revolver, an "A" term loan, and a "B" piece. The company also had a tranche of mezzanine debt. Legg declined to comment on the exact size of the debt due to the company's status as a private company. The private placement is a relatively new product that offered the company interest-rate benefits. In addition, the structure of the private placement debt is more like a bond, offering the company more flexibility. The financial covenants are fairly wide and fairly minimal compared to the bank and mezzanine debt, said Legg.
The rates offered by the new financing were much more attractive than American Reprographics' former bank and mezzanine debt structure, explained Legg. He would not disclose the pricing of the new or previous deals, and declined to quantify the company's interest-rate savings. But he did note, "It was a clear win for us." American Reprographics is a supplier of reprographic services and technology serving markets in the United States and Canada.