March 21, 2018 / 7:20 PM / in 4 months

Airxcel LBO backed by US$540m in loans

NEW YORK (LPC) - US climate control products manufacturer Airxcel’s leveraged buyout by private equity firm L Catterton will be backed by US$540m in loans, according to three sources familiar with the matter.

L Catterton is acquiring Airxcel from current private equity owner One Rock Capital Partners, which has owned the company since 2014.

The transaction was announced on March 14. Financial terms were not disclosed.

The financing is structured as a US$360m secured term loan with a first priority claim and a US$120m secured term loan with a second priority claim, the sources said.

The debt package will include a US$60m asset-based revolving credit facility, which will be undrawn at close, they said.

Jefferies, Morgan Stanley and Citizens Capital Markets are providing the debt commitments, according to a press release.

Jefferies will lead the senior loan and Morgan Stanley will lead the junior loan, two of the sources said.

Syndication is expected to launch by mid-April but a final date is still to be set, they said.

Jefferies, Morgan Stanley, Citizens and L Catterton declined to comment.

L Catterton is paying roughly US$640m for Airxcel, eight times its last 12-months’ Ebitda, or earnings before interest, taxes, depreciation and amortization, of US$80m, two of the sources said.

The transaction is valued at about US$660m including some US$20m of fees.

The company will be capitalized with around US$180m of equity, including a new cash equity contribution from L Catterton and rollover amounts from the existing shareholders, they said.

The debt will bring leverage to 4.5 times through the senior tranche and 6.0 times total.

Airxcel makes air conditioners, heat pumps, cooking appliances, furnaces, powered vents and water heaters for use in recreation vehicles, schools, multi-family housing, telecommunication enclosures and other industrial applications. Its brands include Coleman-Mach, Suburban, Maxxair and Marvair.

Reporting by Andrew Berlin; Editing by Michelle Sierra and Jon Methven

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