Methode Electronics, a global developer of custom engineered and application-specific products and solutions, completed the acquisition of Grakon Parent, a global designer, developer and manufacturer of advanced lighting systems, controls and components for premier OEM manufacturers in the heavy truck, bus, rail, electric vehicle and power sports markets.
Methode funded the total consideration of $420 million with a combination of cash on hand and proceeds from the company’s amended credit facility. According to a related 8-K filing, Bank of America served as administrative agent for the amendment, which provides for a term loan facility in an aggregate principal amount up to $250 million, increases the multicurrency revolving credit commitments under the existing credit agreement to $200 million and makes certain other changes to the covenants, terms, and conditions under the existing credit agreement.
Bank of America was also swing line lender and and l/c issuer. Wells Fargo Bank also served as l/c issuer, while Bank of America Merrill Lynch served as sole lead arranger and sole bookrunner.
Excluding pre-tax costs related to the transaction and inclusive of estimated amortization and interest expense, Methode expects the acquisition to be accretive to earnings in its current fiscal year ending April 27, 2019.
Methode’s President and CEO Donald W. Duda said, “Grakon’s manufacturing capabilities and products will foster additional innovation within our companies, driving incremental revenue, EPS and cash flow growth and providing strong returns for our shareholders. I am delighted to officially welcome the employees of Grakon to Methode and look forward to the growth we can achieve as one company.”
Foros acted as financial advisor to Methode. Wachtell, Lipton, Rosen & Katz served as Methode’s outside legal counsel. Baird acted as financial advisor to Grakon. Kirkland & Ellis served as Grakon’s outside legal counsel.
