Merrill Lynch was expected to close Colfax Corp.'s $315 million credit last Friday, in accordance with the company's projected completion date for its $113.4 million acquisition of Netzsch Group. Since the credit's BB-/Ba3 ratings were announced last week more investors were expected to commit to the credit, said an official, but those commitments could not be confirmed by press time.
The facility includes a five-year, $50 million revolver, a six-year, $225 million "B" piece and a seven-year, $40 million second lien "C" term loan. Price talk for the tranches is LIBOR plus 31/4%, LIBOR plus 33/4% and LIBOR plus 61/4%, respectively. The official said the Richmond, Va.-based power transmission and pump product producer was contemplating a high-yield deal instead of the "C" loan, but since the company plans to de-leverage quickly, the "C" piece seemed a better option.
The official explained that Colfax has existing credits with Bank of America and Scotia Capital in the U.S. and BW Bank leads Colfax's overseas credits. He said Colfax has a long standing relationship with Merrill, but would not comment further on why Merrill was selected to lead the new deal. Merrill did not advise Colfax on the acquisition, he noted. A Colfax official declined to comment. Repeated calls to Merrill bankers were not returned.