Code Hennessy & Simmons is running with Merrill Lynch and J.P. Morgan to lead the financing backing its $510 million acquisition of The Hillman Companies. In addition to equity from Code Hennessy and the new senior debt, Allied Capital will provide $47.5 million of mezzanine financing, according to Peter Gotsch, a partner with Code Hennessy. The new debt will consist of a revolver and "B" loan, Gotsch added. In addition, Hillman's outstanding bank facility will be refinanced.
"We have a long experience with both firms and have worked on a number of projects with both of them," Gotsch said of the two lead banks. "They had competitive proposals under the structure." Gotsch said it is too early to discuss pricing and agent roles on the deal are in the process of being determined.
Gotsch said Code Hennessy has a long history and good track record investing in distribution businesses. "Hillman is very much in the sweet spot of that type of business for us," he noted. Allied acquired Hillman in 2001 for about $72 million. "We made it known that we wanted to sell the company," an Allied spokeswoman said. "We had a few offers." She declined comment on other bidders. Hillman is a manufacturer of key making equipment and a distributor of key blanks, fasteners and other small hardware components. Merrill bankers did not return calls by press time.