Bank of America, Key Bank, Merrill Lynch and Morgan Stanley are set to lead a $875 million credit for The Timken Company backing its $840 million acquisition of Ingersoll-Rand's Torrington subsidiary. Glenn Eisenberg, cfo, said the facility will comprise a five-year, $500 million revolver and a one-year, $375 million term loan. A bank meeting could be held by the end of this week to discuss terms of the facility, a banker familiar with the deal noted. Officials at the lead banks either declined to comment or did not return calls by press time.
The Canton, Ohio, bearing manufacturer will finance the transaction with $700 million in cash from the new facility and $140 million of the proceeds from a public offering of 11 million shares of common stock. A $375 million offering of senior unsecured notes will take out the term loan at a later date.
Both Moody's Investors Service and Standard & Poor's have placed Timken's ratings of Baa1/BBB on review, subject to the transaction. The company's main priority is to maintain its investment-grade status, Eisenberg noted, adding that it would rather cancel the acquisition than have its ratings suffer.