Daily News: April 16, 2018

Wells Fargo, HPS Support BlueLinx Acquisition of Cedar Creek


BlueLinx completed its acquisition of Cedar Creek, a building products wholesale distributor.

The combination of Atlanta-based BlueLinx and Oklahoma City-based Cedar Creek creates one of the largest wholesale distribution companies in the building products industry, with combined revenue of approximately $3.2 billion in 2017. With more than 70 locations, the combined company will utilize its broad footprint to better serve its network of customers.

“We are pleased to announce today that we have finalized the strategic acquisition of Cedar Creek which marks a new, transformative era for our company,” said Mitch Lewis, president and CEO of BlueLinx. “We are in an even stronger position to continue to drive growth, deliver differentiated value to our customers and suppliers, and generate strong returns for our shareholders.”

BlueLinx used net proceeds from debt issuance under its amended $750 million ABL revolving credit facility (inclusive of a $150 million accordion) and a new $180 million term loan to fund the purchase price, repay debt and to pay certain related transaction fees and expenses. Excess availability under the ABL and cash on hand as of the closing approximated $157 million.

According to a related 8-K filing, Wells Fargo served as administrative agent for the credit facility amendment. Letters of credit in an aggregate amount of up to $30 million will also be available under the revolving credit agreement, which would reduce the amount of the revolving loans available under the revolving credit facility. The maturity date of the agreement is October 10, 2022.

In connection with the execution and delivery of the term loan agreement, the company and certain of the company’s subsidiaries also entered into a pledge and security agreement with HPS Investment Partners. The borrower’s obligations under the term loan agreement are secured by a security interest in substantially all of the company’s and its subsidiaries’ assets, including inventories, accounts receivable, real property and proceeds from those items.