Simplicity Manufacturing has completed its largest credit facility-- for $135 million-- in more than a decade to back its acquisition of lawn mower manufacturer, Snapper, for approximately $56 million. Don Schoonenberg, executive v.p. of finance and administration at Simplicity, a portfolio company of private equity firm Kohlberg & Company, said it's the company's first syndicated facility since the 1980s. Because the lawn mower and tractor maker had much smaller credits in the past, its facilities had been club deals, explained Al Meier, executive v.p. at Fleet Capital, lead bank on the deal. Fleet has been doing business with Simplicity since the early 1990s, Schoonenberg added. The new line replaced a previous $45 million revolver, he further noted.
The new credit is an asset-based, fully underwritten deal. "It made the most sense in the fact that we had sufficient assets to back a loan and it offered the most liquidity at the most attractive rates," Schoonenberg, explaining why the company took the asset-based credit route. The credit includes a five-year, $120 million revolver priced at LIBOR plus 21/ 2% and a $15 million "A" term loan with a LIBOR plus 23/ 4% spread. The senior secured line was priced somewhat higher than the previous facility, Meier noted. Still, Schoonenberg stated that the company was pleased with the spread.
Nine banks in total joined the credit after the deal's launch from Simplicity's Port Washington, Wis., headquarters. "It was a very compressed time period," Schoonenberg said of the quick two-and-a-half week syndication of the facility. Simplicity had a sound following from previous banking relationships, which helped result in the line's oversubscription, Meier also noted. Fleet was joined in the final syndicate by CIT Group, US Bank National Association, Wells Fargo, BANK ONE, PNC Bank, Marshall & Ilsley Bank, Washington Mutual and UPS Capital.