Gerber Scientific recently closed on a $110 million refinancing credit that includes tranches led by two different lenders. The four-year deal has a $45 million asset-based, multi-currency revolver led by Fleet Capital Corp., while Ableco Finance--a fund affiliated with Cerberus Capital Management--leads the company's $65 million term loan facility. The deal refinances an unsecured revolver put in place in 1998 led by Wachovia Securities, said Shawn Harrington, executive v.p. and cfo of Gerber. Getting an unsecured deal is not as easy in today's market, he said, explaining the switch to an asset-based revolver structure. He noted that the term loan portion is secured as well, but he would not specify the collateral package. The previous five-year revolver was originally for $235 million, but was reduced to $80 million and was set to mature this coming August, Harrington added.
Harrington would not comment if Wachovia had proposed a new deal for South Windsor, Conn.-based Gerber. The revolver is priced at LIBOR plus 23/4% and is subject to debt-to-EBITDA pricing adjustments after October 31 of this year. The term loan portion is divided into two $32.5 million term loans with two different rates. One loan is priced at 6% over prime, while the other is priced at 71/2% over prime. The loans will also accrue interest of 2% a year, which can be paid in cash or added to the loan principal. Also, there is an annual fee of 13/4% of the average monthly loan balance to be paid on the anniversary of the deal's closing date. The two extra fees can be reduced by 1% and 1/2%, respectively, when certain EBITDA targets are met. He said pricing on the old and new loans are comparable.
Harrington said one other lender joined Fleet in the revolver, while six lenders signed into the term loan portion. He noted that Fleet was involved in the company's previous credit line. Gerber is a supplier of automated manufacturing systems for sign making and graphics.