Lehman Brothers' merchant banking group tapped J.P. Morgan for $136.5 million in bank debt to fund the acquisition of Hunter Fan Co. from Stonebridge Partners and Weston Presidio. Lehman had an exclusive look at the company, according to David Willmott, v.p. and principal at Lehman's merchant banking group. Based on a relationship that Charlie Ayres, managing director of the merchant banking group, had with a principal at Stonebridge, Lehman had the opportunity to negotiate the transaction, Willmott said. Several things attracted Lehman to Hunter. "They are the only national brand of ceiling fan out there," he stated. Willmott also said another appeal is that Hunter outsources all manufacturing. "[It] generates a lot of free cash flow since there are no plants to maintain or invest in." Syndication was oversubscribed, leading to a price cut to LIBOR plus 33/4% from LIBOR plus 4%.
Antares Capital is the syndication agent and GE Capital is the documentation agent on the deal, which consists of a $96.5 million term loan and a $40 million working capital revolver. Antares was in the original deal with Stonebridge and re-upped with Lehman, according to Dan Glickman, a director at Antares. "We've always liked Hunter," Glickman said. "They have an outstanding management team." The company has been run by Bob Beasley and his management team for the past 13 years, and they have tripled the size of the company in terms of revenue and profitability, Willmott said. "Bob Beasley has built an excellent team that's very deep. He has guys that were trained at Fortune 500 companies such as GE, AlliedSignal and Sunbeam Products," he added. Lehman is the third financial sponsor to own Hunter in the last 14 years. Stonebridge and Weston purchased the company from Leach McMicking in March 2002. Bankers from GE Capital declined comment. Calls to J.P. Morgan bankers were not returned.