Workflow Management sold itself after considering alternatives to address upcoming credit facility maturities. The credit facility had a requirement to pay $50 million of the "B" loan by the end of the last calendar year, said Michael Schmickle, Workflow's executive v.p., cfo and treasurer. In June, Workflow was talking to third parties to help deal with the approaching repayment date (LMW, 6/30). The facility was later amended in August 2003 and the due date was extended to May 1 this year, Schmickle said. The amendment also brought the maturity of the revolver and "A" loan to Aug. 1.
In addition to considering alternative financing to deal with the maturity, Workflow conducted an auction and Perseus and The Renaissance Group placed the highest bid, according to a statement from the company.
At the end of October, Workflow's credit facility comprised an $87 million revolver, $16 million "A" loan and $50 million "B" loan, according to Schmickle. Fleet Bank leads the facility with Bank One serving as syndication agent and Bank of America, Comerica Bank and Union Bank of California as co-agents. National City Bank, LaSalle Bank and Chevy Chase Bank are the other lenders on the deal.
Workflow amended the credit facility to allow for the acquisition of the company. KB Toys, which recently filed for bankruptcy, owes Workflow $5 million, Schmickle said. "The bankruptcy has caused us to be in violation with a couple of covenants," he said. "The covenant defaults have been waived to allow this transaction." The amendment provides limited interest rate relief and defers certain fees and warrant vesting.