Comvest Increases Primo Water Credit Agreement
Primo Water, a provider of multi-gallon purified bottled water and water dispensers, announced an amendment to its credit agreement with Comvest Capital.
The amendment i) provides an additional term loan of $3 million; ii) lowers the interest rate on the original and additional term loans to 12.5% from a previous total of 16% per annum; and iii) adjusts the prepayment penalty to 5% in the first year after the closing date of the amendment, 3% in the second year and 1% in the third year, which was previously 10% through October 2013 and 4% through April 2015.
The original term loan of $15.2 million was amended to include the paid-in-kind interest of $0.3 million for a total amount of $15.5 million. The $3 million additional term loan will be used to pay fees related to the amendment and provide additional working capital for the company.
Mark Castaneda, Primo Water’s chief financial officer, stated, “We are pleased with the improved terms under our amended agreement. We had the opportunity to reduce our borrowing costs by 350 basis points while maintaining our relationship with Comvest Capital, which enabled us to avoid a 10% prepayment fee we would have incurred if we refinanced prior to October 2013 with another party. We believe that the debt refinancing is a reflection of our Company’s improved credit quality, underscoring the improvements we have made to our business over the past year.”
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