Daily News: July 24, 2012

BofA Merrill, PNC Complete Refinancing of Birch Credit Facilities


Birch Communications, an IP-based telecommunications and managed services provider to small- and medium-sized businesses, announced that it has completed a refinancing of its senior and subordinated credit facilities. The new $90 million facility consists of a $40 million senior term loan, a senior revolving credit facility with a $35 million capacity, and a $15 million tranche of subordinated debt.

Additionally, the senior credit facility contains an accordion feature, which gives Birch the option to increase the senior credit facility by $20 million. Birch will use this new financing to repay outstanding indebtedness, fund future acquisitions, and fund continued network expansion.

Bank of America Merrill Lynch led the senior (term and revolver) and accordion components of the financing along with PNC Bank. Kayne Anderson Mezzanine Partners provided the subordinated debt. North Sea Partners was the advisor to Birch for the subordinated debt.

“Our company’s results to date have shown that investing in Birch makes good business sense. This is a transformative refinancing for us and it will further strengthen our capital structure, lower our overall cost of debt, increase our free cash flow and provide us with substantial flexibility to pursue opportunities to grow our enterprise,” noted Edward James, Birch’s senior vice president and chief financial officer.

“This funding is confirmation of the soundness of Birch’s overall business strategy, as well as our ability to execute at a very high level,” said Vincent M. Oddo, Birch’s president and chief executive officer. “I am pleased that this funding will allow us to continue to seek accretive acquisitions, expand our proprietary IP-network, and also allow us to expand the scope of our current products and services to better serve our large existing base of customers.”

Headquartered in Atlanta, Ga., Birch Communications provides managed communications and information technology services to a target market of small and medium-sized businesses in select metropolitan areas within 38 states across the United States.